The job market has started cooling, and the economy is going through a slowdown. In such a scenario, the candidates who are looking for new jobs have reduced their pay hike expectations. The details have been stated by the consultants, HR heads, and recruiters.
The fewer employment options followed by the hiring freezes announced by most companies and fears that the employees will be removed from their roles have caused them to reduce their demands of 60-100 percent raises to 20-30 percent.
The peak of the Great attrition resulted in hikes of the salary by 100 to 200 percent most commonly in the case of changing jobs. But the appraisal rates would be between 50 to 70 percent.
But, the numbers have come down significantly. It is prominent in many job families. The numbers lie between 20 to 30 percent which used to be traditionally the case. It was stated by the partner working for Deloitte India.
It has been predicted the salary hikes would plummet. Further, it is because many companies, particularly in the IT services, products, and tech startups, expect that December recruitment will decline by more than 50 percent this year.
The changing trends are still new. It has been around three to four months that the market conditions have shifted visibly.
The first signs of the global slowdown first came into account in the fourth quarter of the previous year, which continued for the first quarter of the financial year 2023, but it has increased drastically by the second quarter.
The downturn in the economy has been found to b too new for the companies to make adjustments in employee contracts. The drop in salary expectations is exhibited in different sectors.
Trends in rate hikes in different job sectors:
A job change in the manufacturing sector would lead to a salary hike of about 50 to 70 percent a few years ago, but now it is accounting for about 30 percent. In the coming years, it will stabilize at 20 percent.
The predictions have been made by the manager of Vedanta Group.
The technology sector undergoes multiple rounds of negotiations, and a series of counter offers have held back. The change is seen within a quarter.
The quarter earnings data for September showed that the wage costs declined as revenue in the major companies such as Tata Consultancy Services LTD and HCL Technologies LTD. to 56.1 percent and 54.6 percent. The wage costs in Infosys have changed to 53.2 percent.
The numbers imply that there has been a decline in the expensive salary negotiations to attrition, indicating an awakening job market.
The start-up sector has experienced the same situation. There were 17000 to 20000 layoffs this year which affected the salary negotiations of the senior employees.
The downturn has affected the venture capital and private equity funds start-ups and tech companies, where people are gladly accepting a 20 to 25 percent hike.
TeamLease Services has stated that the hiring turmoil has continued at the junior level, with the candidates switching their jobs for a few thousand bucks.
Many companies have advocated the wait-and-watch mode before they change the increment estimates for the employees.
The Aon’s Salary Increase survey has shown that the Indian employees’ salaries are going to boost by 10.4 percent, which is compared to the present year’s salary comprising a 10.6 percent actual increase.
India is in a terrible economic crisis at present. Data showed that 16000 Indians have already lost their jobs in Indian startups in 2022. The employees are not secured in the global giants, including Meta, byju, and many other prominent companies.
Hiring in the Indian tech industry has slowed down by 18 percent this October compared to a year ago based on a job-searching platform.
Demands for freshers and mid-level employees have declined during October.
Companies that have undergone layoffs can be considered to be loss-making and are unable to raise funds due to the dire global macroeconomic conditions. Thus, laying offs have become an eventuality.
They have predicted that the employees must seek more sustainable companies in the short term until the global situation improves.
Edited by Prakriti Arora