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Which IT company gave highest salary hike to employees? A comparison of 5 firms

Coforge, L&T Infotech (LTI) and Persistent Systems (PSYS) have increased salaries in FY22 by double digits, the highest in the past four years, according to a report from brokerage and research firm Elara Capital. The report showed that FY22 average wage growth was 2.4x the five-year average wage increase for mid-cap Indian IT companies as acute supply-side pressures necessitated the rollout of significant salary increases.

Coforge increased salaries the most at 27.2% year-on-year (on an annual basis). The chart below further shows that L&T Infotech increased its employees’ salaries by 18.3%, followed by Persistent Systems by 14.5%, Mphasis by 9% and Mindtree by 7%. At FY17-22 salary CAGR (compound annual growth), LTI/Coforge are at the top with Mindtree and Mphasis at the bottom, Elara Securities’ research showed.

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Source: Elara Capital

Meanwhile, the restructuring of the employee pyramid was evident for all of these companies in FY22, with Mindtree (MTCL) leading the way. The pyramid restructuring model has a higher number of employees with less experience and fewer employees with more experience, which will lead to lower payroll costs and can be implemented as part of the business strategy to cut costs.

In FY22, employee growth was greater than average salary growth, implying a faster fresher addition (pyramid flattening) compared to the past four years, the report added. IT giants have paid high fees for the past two years to lure skilled workers as demand for services such as cloud computing, digital payment infrastructure, cybersecurity and cryptocurrency transactions has grown.

A comparative analysis of the annual reports of tier-II IT companies — L&T Infotech, Mindtree, Mphasis (MPHL), Coforge and Persistent Systems within Elara’s IT universe — revealed a few common themes, it said in a statement. note on Indian IT companies.

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“IT companies are positioning favorably in engineering capacity/R&D service as such service lines could emerge as key growth drivers in the coming years – Information Services Group (ISG) Q2CY22 ER&D grew 41% and most plays grew by double digit annualized median employee benefits in FY22. Furthermore, offshoring has risen sharply and travel costs, as a percentage of revenue, have increased for most plays, but are still well below pre-Covid levels,” the note said.

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