IT sector may give cautious salary hikes this year amid economic headwinds, AI adoption: Experts

Salary increments in India's USD 250 billion IT services sector are projected to be moderate in fiscal year 2025, as companies navigate a complex landscape of global economic uncertainties, evolving skill demands, and the increasing adoption of artificial intelligence (AI), according to experts. Industry experts predict an average wage increase of 4-8.5 per cent, a notable step down from previous years, signalling a shift towards more pragmatic compensation strategies.

"The outlook for salary hikes this year is quite cautious," noted Krishna Vij, VP, Team Lease Digital. "Industry players are looking at increments in the 4 per cent to 8.5 per cent range, which is lower than what we've seen in previous years. This slowdown is largely due to global economic challenges, reduced discretionary spending, and shifting business priorities."

Companies are being more conservative with their salary budgets, and many have even pushed their appraisal cycles beyond the usual April-June period, she said, which has made salary revisions less predictable in the current scenario.