Accenture Skipping Pay Hikes and Reducing Promotions in India and Sri Lanka
Key Highlights :
Accenture, one of the world's leading global IT services firms, has announced that it will not be giving pay hikes to its employees in India and Sri Lanka in 2023. Furthermore, the company is reducing promotions at senior positions in both countries. The announcement was made by Accenture's country managing director Ajay Vij via an email to employees.
In the email, Vij mentioned that the company is taking into consideration the macroeconomic environment in making its decisions around pay and benefits. He also stated that the company will not be providing any stay-at-level (base pay) increases this year except where it is legally mandated or committed in a few critical skill areas. Furthermore, promotions to and within the Managing Director (MD) and appointments to Senior Managing Director (SMD) have been postponed until June 2024 to allow the company to return to growth.
Accenture also released a statement confirming its “rewards philosophy” which is to provide market relevant pay based on the skills and locations where it operates. The statement further mentioned that the company considers a variety of factors, including the macroeconomic environment in making its decisions around pay and benefits.
The news of Accenture skipping pay hikes and reducing promotions at senior positions in India and Sri Lanka has come as a major blow to its employees. This is especially concerning as Accenture has more than 3 lakh employees in India.
According to a report by JM Financial Institutional Securities, Accenture’s weak 1QFY24 guidance has pushed out hopes of a second half recovery for India IT Services players. Additionally, a modest implied growth rate through 2HFY24 for Accenture risks India IT Services players’ FY25 revenue growth estimates as well.
Moreover, the hiring index for IT-software/services has declined (year-on-year) in all nine months of this year, reflecting continued softness in demand and uncertainty in the overall environment, according to Emkay Global Financial Services. IT job index is currently down 49 per cent from its peak levels in July 2022.
These developments are a cause of concern for IT professionals in India and Sri Lanka, and it remains to be seen how Accenture will address the issue.
