Accenture, one of the prominent IT giants in India, has sent an email to employees that it will not be providing salary hikes to its employees in India and Sri Lanka in 2023, except in cases where it is legally mandated or committed to in critical skill areas, according to details provided by MoneyControl. This decision was communicated to employees by Accenture India’s managing director, Ajay Vij. Here is everything we know about it.
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The move comes at a time when the IT sector faces several challenges, and Accenture’s own growth has fallen short of its initial plans. In March 2023, the company revealed its intention to lay off 19,000 employees, further reflecting the tough operating environment. The Dublin-based firm, following a September-August financial year, reported mixed financial results in the previous quarter. Its FY24 guidance was among the lowest in the past 16 years.
In his email, Ajay Vij explained that Accenture’s compensation strategy aims to provide competitive pay based on skills and location while remaining affordable for the company. Consequently, the company will not grant base pay increases this year except where legally required or in specific critical skill areas.
The email also stated that individual performance bonuses will be distributed based on contributions, but they will be “significantly lower than last year.” Additionally, the company is reducing promotions. Promotions up to the level of Associate Director (Level 5) will take place as scheduled in December but at a reduced rate compared to the previous year. Promotions for levels 1 through 4 have been postponed until June 2024 to align with company growth objectives.
The decisions made by Accenture reflect the broader challenges faced by the IT sector in India. Similar steps have been taken by other major IT companies in India. HCLTech announced last quarter that it would skip salary hikes for senior management and defer junior employees’ pay hikes by a quarter. Wipro delayed its salary hikes from September to December 2023, and Infosys has yet to implement the salary hikes initially planned for April and July.
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Currently, Accenture has over 300,000 professionals in India. This announcement from Accenture underscores the ongoing difficulties in the IT industry, driven by factors such as global economic conditions and the need to maintain competitiveness while managing costs. It remains to be seen how these decisions will impact the broader job market and the morale of employees within the sector.
