Infosys mulling salary hike for employees?

In a move that will bring cheer to over one lakh employees, software major Infosys is evaluating a salary hike and this could come into effect from the third quarter, according to people familiar with the development.

The people ET NOW spoke to said that the top management is "seriously evaluating" salary hikes for employees and that imminent salary hikes has been communicated informally by senior managers to employees. Also, that expectation is running very high internally on these possible hikes.

In an e-mail response to ET NOW, an Infosys spokesperson said, "We do not comment on rumors and speculation. Our decision on salary hikes remains deferred. As we have communicated earlier we will continue to review this on a quarterly basis."

Infosys is the only company among large cap and mid cap software firms which hasn't hiked salaries so far, because of the uncertain business environment. It, however gave out promotions-linked hikes to about 16,000 employees earlier this year.

Analysts ET NOW spoke to said that if Infosys decides to give out hikes, it would have a 220-250 basis points impact on margins, something that most analysts are already factoring in.

One analyst tracking Infosys, who did not wish to be named said, "More than attrition, the company will be worried about losing employees in the CRR 1 and CRR 2 bands, which basically has the top performers. So, an expectation of a hike is running very high."

This is however, not the first time in recent years that Infosys has deferred a salary hike. During 2009, the company deferred hikes and later gave it out in the middle of the year when the business sentiment improved.