Mid-size IT firms’ wage hikes outstrip tech giants in fight for talent

India’s mid-size IT companies are defying economic headwinds by offering salary hikes up to 11 per cent, much higher than that offered by frontline domestic and global tech giants.

Companies like KPIT Technologies, Coforge, and Hexaware, are quoting salary increments in the 9-11 per cent range, surpassing the Indian average of 4-8.5 per cent salary increments and higher than many global markets who are working with just 3-4 per cent increments, according to data from TeamLease Digital.

This is almost neck-to-neck with global giants like Accenture – where remuneration for many job functions are higher than those offered by India peers – that applied differentiated raises, with employees of the level associate manager and upwards getting 3–13 per cent hikes.

“Mid-size companies entered FY26 with stronger Q1 results compared to large IT firms. With leaner teams and a sharper need to stay competitive for specialist talent in areas like cloud, data, cybersecurity, and AI, their pay increases are relatively better. They are also more agile in decision-making, especially in linking compensation to emerging technologies where demand is outpacing supply, resulting in greater flexibility,” said Ganesh S Padmanabhan, VP- Recruitment Business at CIEL HR, an HR solutions provider.

Giants play conservative

Meanwhile, tech giants like Tata Consultancy Services (TCS) offered delayed increments of 4.5-7 per cent for most staff. Tech Mahindra offered a 7-14 per cent hike from regular to standout employees, while HCL Technologies offered single-digit hikes across all levels of staff, reported Instahyre. As a result, India’s overall IT-sector wage hikes seems to be slowing down in response to global macroeconomic pressures and AI-driven cost-efficiency stress.

However, TeamLease Digital argued that India’s salary hikes are still higher than global averages.

“The average range of salary hike is expected to remain in the mid-to-high single digits, around 5–8 per cent, while only scarce, revenue-critical skills are seeing double-digit hikes. This shows a slowing trend for now, though there are high chances that demand recovery could push it up again in 2026,” said Neeti Sharma, CEO at the TeamLease Digital.

Similarly, Padmanabhan said large IT firms are being prudent, balancing retention with global macroeconomic uncertainty, while many AI programmes are still in the proof-of-value stage. AI projects are scaling, but clients remain in experimentation and ROI-validation mode. Companies are therefore balancing investments in future-ready capabilities with the need to protect margins.

AI skills

Experts said mid-sized firms doubled down on digital and niche skills to retain talent. Roles in AI and advanced digital are seeing slightly higher salary raises, around 8-10 per cent.

“As AI adoption matures and client budgets become clearer, we expect greater differentiation: premium skills will continue to attract higher raises, while broad-based increases are likely to stay moderate,” said Padmanabhan.

Modest hikes, combined with deferrals, tighter appraisals, and workforce restructuring, suggest growing stress, said Sarobjit Mallick, Co-Founder at Instahyre. However, AI transforms roles and demand tilts toward niche skill sets, stagnant pay may erode morale and retention.

“For recruiters, the challenge is clear: reinvent compensation models by tying incentives to upskilling, growth opportunities, and value-based performance. For candidates, they need to look beyond traditional degrees and gain immediately applicable skills in both tech and non-tech domains,” he said.

Published on September 8, 2025