IT companies offering lucrative pay hikes to retain talent
With the business dynamics changing rapidly over the last few months and all sectors on a hiring spree, IT companies are now offering their employees lucrative pay hikes to retain their talent pool. The buzz is that companies like WIPRO, TCS and Infosys will be rewarding their employees with variable payouts, promotions and salary hikes to make it worth their while. This may seem as an attempt to retain employees especially those with domain specific knowledge.
While Infosys did not announce increments in April last year due to the global economic slowdown, it arranged for salary hikes in October 2009 and then again in April this year elevating about 5400 employees. Junior to middle-level employees received salary raise of between 13-17%, while increments for senior management was 10% on average. According to market reports, the company is now planning staff level promotions in October along with a salary hike to those promoted. WIPRO is also considering another round of raise in the future after one in February this year. TCS on the other hand is tempting its employees with a larger share of variable pay. For example, it has already paid employees 100% of their variable pay for the quarter which ended in June.
PM’s Take: Is pay hike an effective plan to retain talent? Not for the long-run, we believe. With a majority of IT company employees being Gen Yers, money alone is not sufficient to hold them back. A well-defined career development path, opportunities to explore new dimensions of work, practices to ensure employee engagement and alignment of personal goals with professional goals are equally vital to ensure the longevity of an employee’s commitment towards his/her organization.