IT major HCLTech marginally hikes salaries of junior-level employees

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(This copy has been updated)  India’s third-largest IT services company, HCLTech, has introduced salary hikes for its junior-level employees, ranging from 1 per cent to 4 per cent. The hikes are applicable for employees at E0, E1, and E2 levels, which typically include professionals with up to 10 years of experience, according to a report by The Economic Times.

 

 Most junior employees received hikes between 1-2 per cent, while top performers were awarded increments of 3-4 per cent, the news report mentions. These adjustments, effective from the third quarter (October-December 2024), fall short of earlier expectations of an average 7 per cent hike, with top performers anticipated to receive 12-15 per cent.

 

“E0-E2 employees started receiving their letters in the last week of December,” confirmed an insider from the company, speaking to The Economic Times. However, mid and senior-level employees (E3 and above) have yet to receive salary adjustments.

 

HCLTech on salary hike

Responding to the report, HCLTech said it is proceeding with salary increase as per the plan shared during the Q2 earnings commentary. Its average salary increase in India is expected around 7 per cent, with top performers receiving 12-15 per cent.

 

“Typically, every year when you look at the review cycle, given the fact that we have a higher proportion of people who come in laterally into our system, who will become eligible for increases at the point of completing a year, the number of individuals eligible for increases during a given cycle is a function of that, plus the performance. So, if I look at the average for all our colleagues in India, it will be in the range of about 7 per cent. But, as is always the case, increases are linked to performance, and top performers will continue to see double-digit increases in the range of 12-15 per cent,” the company mentions.

 

HCLTech poised for growth

HCLTech, which is also set to release its third-quarter earnings on January 13, is projected to lead growth among Tier-I IT firms. Meanwhile, its larger rival Infosys recently implemented a 90 per cent performance bonus for the second quarter, but delayed annual salary hikes until early 2025, as has Tata Consultancy Services (TCS).

 

Challenges facing IT sector

The IT sector continues to face challenges such as slowed client spending and a focus on cost-efficiency, leading many companies to delay or reduce wage increases. Industry reports suggest that while firms like Wipro, LTIMindtree, and others rolling out hikes may see pressure on margins, those delaying hikes might experience stable or improved profitability.