Though HCL Tech has bit the bullet, industry majors, which too are battling high attrition, have not given any such signal, so far.
It has taken a pandemic to move the needle on the salary packages for greenhorn engineers hired by the Indian IT services sector.
The country’s third-largest IT services player, HCL Technologies, has decided to boost the entry-level packages from Rs 3-3.6 lakh to Rs 4.25 lakh for FY23, in a bid to attract fresh talent and keep them for longer to counter the impact of rising attrition.
This new package would also be applicable to those freshers who joined the firm in FY22.
Though HCL Tech has bit the bullet, industry majors, which too are battling high attrition, have not given any such signal, so far.
“Everyone is increasing their fresher-level hiring, and if you want to attract more talent, you need to create a pull factor.
"Also, we want to improve the quality of our fresher pool, and want more toppers joining our staff. This will also make us relatively attractive,” said V V Apparao, chief human resources officer, HCL Technologies.
The better packages would be offered at over 300 institutions that HCL Tech visits in search for fresh talent.
For FY22, HCL Tech hired 23,000 freshers and for FY23, it aims the figure to jump by 30-50 per cent.
Larger peers Tata Consultancy Services (TCS) and Infosys onboarded 100,000 and 85,000 freshers, respectively, in FY22.
Asked if industry peers will follow to counter attrition, Apparao said he was not in a position to answer.
But based on the checks that Business Standard did, it seems that other IT services firms may not increase their fresher compensation in a jiffy.
Both TCS and Infosys did not comment on the development.
“It is not that easy and straight forward to increase entry-level salaries, especially for those who do large recruitment.
"Any rise in salary at the entry level would mean that salaries offered to last year’s batch also need to change, and so on," said an HR consultant.
“As demand for talent has increased and companies want to hire the best, we have seen firms increasing their entry-level salaries from Rs 3- 3.6 lakh to Rs 4-4.6 lakh.
"Some candidates have also been offered upgrade options, so that they continue with the firm,” said Binoy Mathew, director, Centralised Placement Cell, VTU Bangalore.
A check with universities that see bulk hiring from IT services majors showed that neither they have increased their fresher packages, nor there is any communication in their regard for FY23 intake.
But these universities noted that differential hiring has gone up, besides product companies and start-ups are offering fatter pay cheques.
First, almost all top hirers, such as TCS, Infosys, Wipro, and Cognizant, have started doing differential hiring.
What this means is that based on a student’s skills (in coding, cybersecurity, IoT, etc), he/she can attract a higher package.
TCS has a programme called TCS Digital that looks at hiring students with specialisation and the pay package starts from Rs 7 lakh.
Cognizant has a programme called Digital Next, for which if selected, a fresher can get a starting pay package of Rs 6.75 lakh.
Wipro Turbo, a similar programme from Wipro, can boost a student’s salary package to Rs 6.5 lakh.
“At VIT our focus is to ensure our students are able to attract companies in the differential hiring category, wherein salary starts at Rs 6 lakh per annum,” said V Samuel Rajkumar, director career development center, VIT.
For FY22, VIT placed around 7,500 students, for which 885 companies visited the campus.
Of these, 2,612 received packages of more than Rs 10 lakh.
For instance, Cognizant hired 2,500 freshers from VIT at a package of Rs 3.6 lakh per annum in FY22, while another 210 students qualified under the differential category — called Digital Next programme — at a yearly pay of Rs 6.75 lakh.
“Talent continues to remain a key competitive advantage for the Indian technology industry.
"As of FY2022E, India’s technology industry employed over 5.1 million talent pool of which nearly 1.6 million were digitally skilled.
"During FY 2022, 450,000 people were hired, majority of whom were freshers,” Nasscom said on HCL Technologies move.
