Tata Consultancy Services (TCS), India’s largest IT services provider, is set to roll out annual salary hikes for the fiscal year 2025, with average increases ranging between 4% and 8%.
Offsite employees can expect a hike of 7-8%, while onsite employees may receive a lower increment of 2-4%.
To reward excellence, high-performing employees could see salary increases ranging from 12-15%.
The hikes will take effect from March, with disbursements beginning in April 2025.
However this is the lowest average salary hike in last four years. In FY24, TCS employees received a 7-9% increase, while FY23 saw 6-9%, down significantly from the robust 10.5% hike in FY22.
Salary Hike Trends in 3 years
- FY2021-22: 10.5% average hike (post-pandemic recovery and strong IT demand).
- FY2022-23: 6-9% (moderation after the post-pandemic surge).
- FY2023-24: 7-9% hike (IT sector slowdown and global economic concerns).
- FY2024-25: 4-8% hike (lowest in the last four years).
TCS has linked salary increments to employees’ compliance with its return-to-office policy, which was enforced in early 2024. The company has mandated a five-day office workweek for most employees, emphasizing an in-office work culture.
Those adhering to this policy may receive better salary hikes, while non-compliance could impact increments. This move aligns with TCS’s strategy to enhance collaboration, productivity, and organizational stability in a post-pandemic work environment.
Industry Comparison
Infosys to roll out salary hikes of 5-8% with compensation revision letters scheduled for March 2025.
In the 2023-24 fiscal year, Infosys also raised salaries by 5-8% on average, with top performers getting up to 20%. The company had paused salary hikes in both FY22 and FY23 to cut costs.
Conclusion
With improving quarterly results in FY24-25, signs of recovery in the IT industry are evident. However, companies remain cautious with salary increments due to ongoing global economic uncertainties.
While firms like TCS and Infosys continue to offer hikes, the focus has shifted to performance-based pay and return-to-office compliance.
This cautious approach suggests that while growth is stabilizing, salary increments may remain conservative until a stronger economic rebound is firmly in place.
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