BENGALURU: The good old days of predictable April hike cycles are passé for IT firms. What was once a dependable hike cycle has given way to single-digit increases and a wait-and-watch approach — often leaving employees in the dark about when, or even if, raises will come.For many IT companies, this reflects a familiar playbook of cost management, now applied with greater intensity. Salary hikes are being deferred or scattered through the year, while people costs are increasingly used as a routine lever to protect profitability.Increments are no longer uniform or time-bound; instead, they are calibrated to business conditions. The impact varies across the workforce. Junior employees tend to be relatively protected, receiving more modest adjustments. In contrast, mid-level and senior executives are seeing far more sporadic increases, closely tied to performance, margins and demand visibility.Compensation is becoming more conditional. Recent actions by companies underscore this shift. Wipro, for instance, rolled out salary hikes in March this year after a gap of nearly 18 months.The previous round came in Sept 2024, barely nine months after the prior merit cycle. For the current fiscal, barring TCS, Infosys, Wipro and HCLTech have yet to clearly spell out the timing of salary hikes, reinforcing the growing uncertainty around pay cycles. At the heart of this transition is a deeper structural question: how companies deploy savings generated from workforce optimization. The risk is that firms rely too heavily on costcutting—deferring hikes, tightening performance filters and reducing headcount —without reinvesting enough into building an AI-ready operating model.Increasingly, the shift is from performance management to margin management, with employee costs treated as a short-term lever. This change is also being driven by the normalization of layoffs as a management tool. Once considered a last resort, layoffs are now used more systematically to manage costs.From an industry standpoint, Zensar CEO Manish Tandon attributes the trend to margin pressures and persistent uncertainty. “Salary hikes are permanent commitments, while demand conditions remain dynamic. Companies want to retain flexibility, and that’s why many are deferring or staggering increases over time.” He, however, said that Zensar rolled out salary hikes on time.
