Global IT services powerhouse Accenture has made a strategic decision to withhold salary increases and postpone promotions for its employees in India and Sri Lanka for the fiscal year 2023. The move comes in response to an unexpectedly challenging macroeconomic environment, as stated by the company.
Accenture, a leading software firm employing over 3 lakh individuals in India, has clarified its decision by pointing out the need to consider various factors, including the macroeconomic landscape, while determining pay and benefits for its workforce.
Accenture India Country Managing Director Ajay Vij communicated this decision through an email to employees, emphasizing that salary hikes will only be given where legally mandated or in critical skill areas committed to previously.
“Given the context of our performance, we will not be providing any stay-at-level (base pay) increases this year except where legally mandated or committed in a few critical skill areas,” noted Ajay Vij in the email.
The challenging macroeconomic conditions faced by the company at the beginning of the fiscal year FY23 have led to this measured approach. As a result, promotions to and within the Managing Director level, along with appointments to Senior Managing Director positions, are being postponed until June 2024, allowing the company to regain stability and affordability in promotions.
In a statement to IANS, Accenture reiterated its commitment to providing market-relevant pay based on skills and location. The firm’s move to temporarily halt salary increases and promotions aligns with its effort to navigate the current economic landscape and ensure sustainability.
The implications of Accenture’s decision have rippled across the industry, dampening hopes of a second-half recovery for India’s IT services players, according to a report by JM Financial Institutional Securities.
Additionally, the hiring index for IT-software/services has declined consistently throughout the year, reflecting ongoing softness in demand and increased uncertainty within the overall environment, as reported by Emkay Global Financial Services. The IT job index is currently down 49 percent from its peak levels in July 2022.
The economic landscape remains uncertain, and companies like Accenture are making strategic decisions to navigate these challenges while striving to maintain stability and sustainability for both their business and their employees.