Pay hikes to tech candidates halve, say industry experts

Salary increases offered to prospective recruits have shrunk to less than half over the past year amid an extended hiring slowdown across the major tech cohorts – IT services, products and tech-enabled startups – as companies are no longer desperate to hire candidates with still sought-after high-end niche tech skills at any cost, said industry experts.

Average salary increases have plunged to 35-40% from 50-100%, across categories of “hot skills” such as full-stack engineers, data engineers, front-end engineers, SRE/DevOps, data scientists and back-end engineers, according to data put together for ET by specialist staffing firm Xpheno.

This marks a sharp slowdown from a year ago, when candidates were sitting on multiple job offers and offer shopping had become rampant while employers were in a hiring frenzy.

For instance, the average salary range for a full-stack engineer with experience of four to seven years has reduced to Rs 10-26 lakh per annum from Rs 15-32 lakh per annum at the end of 2021-22. The negotiating range offered by employers has fallen to 20-35% from 50-100% during this period.

For data engineers and data analytics, salary hikes on offer range between 25-35%, down from 40-90% a year ago, for front-end engineers the hikes have fallen to 15-35% from 50-90%, while for SRE/DevOps hikes range from 20-35%, down from 40-80% earlier, and for data scientists, salary hikes on offer have come down to 20-35% down from 40-100%.

“We are witnessing the quintessential ‘calm after the storm’ in recruitment conversations now,” said Anil Ethanur, co-founder, Xpheno. “After a round of downward budget revisions across roles in 2022-23, the current salary ranges in offer are well in the moderated zone with no unusual hikes in play.”

“Irrespective of candidate expectations, employer end corrections have happened and negotiating ranges have normalised and rolled back well to the average 35% ceiling rate,” said Ethanur. “Of course, there still exist the outlier offers and negotiations, but these are too few and far apart.”

Expectations of offer hikes too have largely cooled down, to 30-40% from 70-120% at the end of FY22, showed the data.

“Talent has become aware that higher hike expectations push their candidature further back down the shortlisted queue,” said Ethanur.

Anshuman Das, CEO of Longhouse Consulting, said niche skills still command a premium over the other tech skills due to the continuing demand and lack of supply. However, he said, the salary inflation seen in 2021-22, when there was a war for talent among tech companies, from IT services to startups, is no longer there. While IT services companies have rolled back the negotiation bandwidth as they focus on utilisation, startups too are no longer willing to pay any cost due to the funding slowdown.