The tech sector’s salary growth for potential recruits has experienced a significant contraction, falling to less than half of previous levels within the last year, as reported by ET. The slowdown in recruitment across key tech segments including IT services, products, and tech-driven startups has led to a decreased eagerness among companies to secure candidates with high-end specialized tech skills at any cost. Experts in the field have noted this emerging trend.
Once notable increases in average salaries have dwindled from the previous range of 50-100% to a more moderate 35-40% for in-demand skill sets like full-stack engineers, data engineers, front-end engineers, SRE/DevOps specialists, data scientists, and back-end engineers. This information is based on data compiled by specialized staffing firm Xpheno for ET.
This shift stands in stark contrast to the situation just a year ago, when job seekers were flooded with multiple job offers, leading to a trend of seeking the best offers, while companies rushed to hire candidates.
For instance, the standard salary range for a full-stack engineer with four to seven years of experience has contracted to Rs 10-26 lakh annually, down from the previous Rs 15-32 lakh at the end of 2021-22. Similarly, negotiation margins offered by employers have decreased from 50-100% during that period to 20-35% at present.
In fields like data engineering and data analytics, the potential for salary hikes now rests at 25-35%, a decrease from the 40-90% observed a year ago. Salary increases for front-end engineers have decreased to 15-35%, a drop from the previous 50-90%. SRE/DevOps roles have seen a reduction in hikes to 20-35%, down from 40-80%, while data scientists are now being offered increments in the range of 20-35%, as opposed to the prior 40-100%.
Anil Ethanur, co-founder of Xpheno, remarked, “We are witnessing the classic ‘calm after the storm’ in recruitment conversations.” He pointed out that after budget adjustments across roles in 2022-23, current salary ranges for job offers have stabilized without any unusually high increments.
Ethanur further noted that despite candidate expectations, employers have made corrections, resulting in normalized negotiation ranges, which are now centered around an average 35% increment. While exceptional offers and negotiations still exist, they are now infrequent occurrences.
The forecast for anticipated increment levels has also considerably cooled, dropping from 70-120% at the end of FY22 to the current 30-40%, according to the data.
Anshuman Das, CEO of Longhouse Consulting, acknowledged that specialized skills still warrant higher compensation due to ongoing demand-supply dynamics. However, Das emphasized that the salary inflation prevalent in 2021-22, a period marked by intense competition for tech talent in IT services and startups, has subsided.
The scenario has changed for IT services firms as they focus their negotiation efforts on utilization. Similarly, startups, dealing with a funding slowdown, have shifted away from unrestrained spending.