HCLTech Approves 1-4% Pay Hikes for Junior Staff: Report
HCLTech, one of India’s IT giants, has taken a cautious step forward in its compensation strategy, rolling out modest wage hikes for junior employees in the October-December quarter. While the management once painted a more optimistic picture of 7% average annual increments and up to 15% raises for top performers, reality has played out differently. According to a report by Moneycontrol – citing sources familiar with the matter – most junior employees received increases of just 1-2%, with the highest performers securing 3-4%—a far cry from the earlier promises.
This move, though incremental, sheds light on the cost-conscious strategies IT companies are adopting in a complex economic climate. HCLTech is not alone in treading carefully. Many leading IT firms, barring Tata Consultancy Services (TCS), have delayed their wage hikes altogether this fiscal year. It’s a calculated gamble aimed at weathering uncertain market conditions and defending profit margins as discretionary IT spending slows.
HCLTech Rolls Out 1-4% Wage Hikes
The current hike at HCLTech primarily benefits employees in the E0, E1, and E2 bands, a group that includes junior-level staff with up to a decade of experience. However, mid-level employees and senior professionals—those in the E3 band and higher—are still waiting for pay raises. Frustration is palpable among some of these employees, as the report suggests that they haven’t seen an increment for at least two years. This stagnation aligns with HCLTech’s earlier decision to skip compensation reviews for senior leadership during FY24, leaving many in higher roles to feel overlooked despite the company’s strong financial performance.
On the business front, however, HCLTech continues to outperform. The company’s Q2 FY24 results highlighted its resilience, with a 1.6% quarter-on-quarter revenue increase in constant currency terms. EBIT surged by 10.6% sequentially to ₹4,934 crore, while net income grew by 8.4% to ₹3,832 crore. To top it off, the company announced a ₹12 per share dividend, marking its 87th consecutive quarterly payout—a testament to its robust financial health.
Interestingly, HCLTech also outshone its peers—TCS, Infosys, and Wipro—in year-on-year revenue growth during the September quarter. Its ability to secure diverse deal wins across geographies and industries propelled its EBIT margin and net profit beyond market expectations. However, this financial outperformance contrasts starkly with its conservative wage increments, leaving employees wondering where they fit in the equation.
The dichotomy between HCLTech’s market triumphs and restrained salary increments reflects the broader challenges of balancing profitability with employee satisfaction. The IT sector is navigating turbulent waters, with companies striving to maintain their competitive edge while keeping costs under control.
