HCLTech to start rolling out wage hikes in Q3 from October onwards

Senior-level salaries account for a significant part of HCLTech's wage bill.

HCLTech, the country’s third largest IT services company, is set to kick start its wage reviewing process for the fiscal year FY24, after deferring it by over a quarter, the company’s chief people officer Ramachandran Sundararajan said during its Q2 earnings conference on October 12.

This, however, will be only applicable to the junior employees, as compensation review for the mid to senior management level employees will be skipped entirely in FY24, amidst a challenging and uncertain business environment for the IT major. Senior-level salaries account for a significant part of the company’s wage bill.

“We had deferred pay revision by a quarter. We will now be going ahead with pay revision this quarter, from October onwards. Mid- and senior management won’t take pay hikes in FY24. But for 90 percent of our employees, we will go ahead with pay revision,” Sudararajan said.

In terms of variable payout, Sundararajan shared that a majority of employees will be receiving around 85 percent of their earmarked variable pay amount.

“Quarterly variable pay is 3 percent of the annual compensation of the individual. All colleagues will get quarterly variable pay this quarter. The majority of them should receive 85 percent of the variable pay,” he said.

Not just HCLTech, Infosys too has announced on October 12 that it will start rolling out wage hikes from November 1 onwards. Infosys too had delayed wage hike cycle which usually happens in April for employees below the senior management and in July for those above.

Tata Consultancy Services (TCS) was the only IT services company which started its wage hike cycle on time in April, with the exceptional performers getting 12-15 percent hikes. Wipro too had deferred salary hikes from Q2 to Q3, informing the employees that those who merit salary hikes will start seeing it effective from December 1 onwards.

Earlier today Moneycontrol had reported that Accenture has informed employees internally in India and Sri Lanka that they will not be doing any base pay increases for its employees unless it's legally mandated or for critical skills, annual bonuses would be significantly lower than last year, and promotions would be few.

HCLTech reported its Q2 earnings today. The company posted a 9.92 percent year-on-year (YoY) growth in net profit. Sequentially, net profit was up 8.55 percent driven by a robust deal pipeline reported this quarter.

Net profit for Q2FY24 stood at Rs 3,833 crore. Consolidated revenue for the quarter grew 8 percent YoY to Rs 26,672 crore as compared to Rs 24,686 Crore in Q2FY23.

EBIT margin for the company improved by over 150 bps QoQ to 18.5 percent. HCLTech also reported its highest-ever net new deal addition worth $3.9 billion this quarter.