Tech salary increases cut in half as hiring pace slows

In a significant shift reflecting the evolving dynamics of the tech job market, industry experts have pointed out that salary hikes offered to potential candidates in the technology sector have dwindled to less than half of what they were just a year ago.

This trend has emerged amidst a protracted hiring deceleration across key tech sectors, including IT services, tech products, and tech-enabled startups. The experts have noted that companies have moved away from the desperate hiring practices of the past, where candidates with specialized high-end tech skills commanded exorbitant salary offers, reported ET.

According to insights gathered by specialist staffing agency Xpheno and shared exclusively with ET, the average salary increments have plummeted from the earlier range of 50-100% to a narrower band of 35-40%. This trend is consistent across a spectrum of high-demand tech roles like full-stack engineers, data engineers, front-end engineers, SRE/DevOps professionals, data scientists, and back-end engineers.

Comparing the current landscape to a year prior, the contrast is stark. The previous scenario was characterized by candidates juggling multiple job offers while employers were in a frantic scramble to secure talent.

For instance, the average salary bracket for a four-to-seven-year experienced full-stack engineer has shrunk to ₹10-26 lakh per annum from the previous ₹15-32 lakh per annum by the end of 2021-22. Negotiation ranges offered by employers have also contracted from 50-100% to 20-35% during this period.

Data engineers and data analytics professionals are encountering similar reductions, with offered salary hikes now ranging between 25-35%, compared to the earlier range of 40-90%. Front-end engineers are facing a decrease from 50-90% to 15-35%, while SRE/DevOps professionals now see hikes of 20-35% instead of the previous 40-80%. Data scientists have also witnessed a decline from 40-100% to 20-35% in salary hikes on offer.

Anil Ethanur, the co-founder of Xpheno, described the current phase as the "calm after the storm" in recruitment conversations. He noted that following budget adjustments in 2022-23, the present salary ranges are now more moderate and lack the earlier substantial spikes.

The trend isn't limited to salary offers alone. Candidate expectations regarding hikes have also cooled off considerably, shifting from the range of 70-120% at the close of FY22 to a more tempered 30-40%.

Ethanur explained that the heightened expectations for salary increments have led candidates to be pushed down the list of shortlisted candidates. This realization has nudged job seekers to reassess their expectations.