IT Companies Cutting Salary Budgets, Leveraging Variable Pay for Hot Skills

Global IT services firm Infosys lately postponed a portion of its senior and middle management workers’ salary rises. Other firms in the industry are increasingly tightening salary budgets and leveraging variable pay for high-performance and niche abilities.

This arises as Indian IT service firms are struggling with marginal pressure and increasing staff expenses in the face of an increasing need for high-cost digital abilities and pressure to recruit local talent in the US and other nations.

Companies are cascading variable pay to higher middle management levels and constructing new methods to calculate them, such as project-based evaluation, experts said.

“Multiple variables are accountable for this – right from the increasing need for new digital abilities in the US, placing pressure on the IT job being outsourced to other nations by enforcing visa constraints,” said Anandorup Ghose, partner and head of emerging markets at Aon.

Traditionally, money payouts and one-time bonuses were not very common in the IT service sector, where a big proportion of staff are technical and are still used for fixed salaries.

However, companies are being prompted to make more intelligent and wide use of the variable component with increasing pressure on the salary kitty, which may command a 10-15% share in middle management pay and 30-35% in senior management pay.

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