Accenture skips pay hikes and promotions in India and Sri Lanka this year

The US-based IT firm has cited challenging macro environment and slower growth than was initially planned as reasons for skipping pay hikes during the company's financial year (September to August)

Accenture has announced that it will not be providing salary hikes to its employees in India and Sri Lanka this year, except in critical skill areas and where it is legally mandated, according to a report by the Financial Express. The decision comes after the IT sector reported a challenging macro environment and lower-than-planned growth in the first quarter of the financial year 2023.

In an internal email to employees, country managing director Ajay Vij stated that the US-based IT company needed to make difficult decisions around promotions and rewards. While individual performance bonuses will be paid based on contributions, they will be significantly lower than last year. The company is also reducing promotions, postponing them until June 2024 for certain levels, allowing the organisation to return to growth.

Accenture, which follows a September-August financial year, reported its second-lowest forecast in 16 years, for its upcoming year. The US-based IT firm expects a revenue growth of -2 to 2 per cent in Q1FY24 and for a revenue growth between 2-5 per cent for the full year.

In the quarter that ended on August 31, Accenture revenue rose four per cent to $16 billion, compared with estimates of $16.08 billion. The IT firm has cited soft demand from clients as the primary reason.

Several other IT firms, including HCLTech, Wipro, and Infosys, have made similar decisions amid economic uncertainties. Wipro had deferred its merit-based increments till December. In contrast, last year it happened in September and reports suggest that employees at Infosys were still awaiting salary hikes from the previous year's performance review cycle, as of September.

Tech Mahindra also chose to defer appraisals of senior-level employees. While earlier reports suggested that HCL Tech would not implement raises at all, according to Business Today, the company said it will start rolling out pay hikes for junior employees from October.

In contrast, Tata Consultancy Services announced annual salary hikes for the financial year 2023-24 from April, offering an average increase of six to eight per cent, and 12 to 15 per cent for exceptional performers.