News: Wipro postpones salary hikes, implements 80% variable pay for Q1FY24

Compensation & Benefits

Wipro postpones salary hikes, implements 80% variable pay for Q1FY24

Amid the ongoing focus on defending margins and reducing wage bills, the issue of salary hikes raises concerns, especially for Wipro as it strives to navigate these challenges.
Wipro postpones salary hikes, implements 80% variable pay for Q1FY24

In a departure from its previous practice of implementing salary hikes in September, Wipro has decided to shift its wage hike cycle to the third quarter of the fiscal year. The company's management, speaking during a press conference, affirmed that wage hikes will still be provided to employees.

According to a report from Moneycontrol, the issue of salary hikes arises at a critical juncture when companies are striving to safeguard their margins and reduce wage bills, with particular concern surrounding Wipro. Although Wipro has assured that its margins will remain within a comparable range, it plans to proceed with pay raises in the third quarter.

“We did our last salary increase in September of last year, and we plan to do that for this year sometime in quarter three,” Chief Financial Officer Jatin Dalal said in the company’s call with analysts, adding that the impact was not being factored in for Q2.

Infosys, Wipro's rival based in the same city, has chosen to defer its salary hike, deviating from its customary April cycle for junior employees. 

On the other hand, HCLTech has announced a deferral of hikes for junior and mid-level employees by one quarter and has decided to skip the compensation review for management-level and higher employees this year. HCLTech's leadership highlighted during the analyst call that the latter group comprises a substantial portion of the overall wage bill.

During the press conference, Wipro's Chief Human Resources Officer, Saurabh Govil, affirmed that the company remains committed to its quarterly promotion cycles. Govil stated that the promotion cycles were carried out in Q1 and will continue as planned in Q2, reported Moneycontrol. 

For Q1, the company will distribute 80 per cent of the variable pay to junior level employees, whose payout is tied to the overall performance of the company. However, for employees at the manager level and above, the variable payout will be determined based on the performance of their respective business units.

“Our variable pay will pay out will be around 80% in Q1 in spite of this environment. We will continue to do what is required for our employees but continue to calibrate with the business requirement,” he said.

The business demands have impacted Wipro's ability to onboard all the freshers it had recruited in the previous year. In the current fiscal year, Wipro did not participate in campus hiring, and it also did not onboard any new hires during Q1. The company has not disclosed specific hiring targets, but it concluded the quarter with a reduction of 8,812 employees.

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Topics: Compensation & Benefits, Business, #HRCommunity, #HRTech

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