According to them, the range of pay hikes that companies are willing to discuss with candidates has returned to pre-pandemic levels, amid an oversupply of talent and global economic uncertainty.
Companies, which were doling out unprecedented hikes to rope in talent, have slashed their negotiation range with job seekers for niche skills such as full-stack engineers, data engineers and data analysts, frontend engineers, SRE/DevOps, data scientists and backend engineers to 15-40% this fiscal year from an average of 50-120% in FY22, according to estimates by staffing firm Xpheno, based on inbound recruitment mandates from employers and job listings on popular job boards.
For example, the offer negotiation range for a full-stack engineer with 4-7 years of experience has narrowed to 20-40% now from 50-100% in FY22. Likewise, for a frontend engineer with similar experience, companies may be willing to negotiate a maximum of 15-35% versus 50-90% in FY22. The steepest drops are seen in IT services that have been hit by overseas macroeconomic uncertainty as well as startups that are facing a funding winter.
“With tech spending taking a hit, the demand for tech talent has slowed down over the last two quarters. The hiring narratives have changed and a clear shift in the negotiation power is visible for top IT skills,” said Anil Ethanur, cofounder, Xpheno.
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Nitin Bhatt, technology sector leader at consulting firm EY, said: “A combination of factors is driving the drop in salary negotiation bandwidth. It includes the overall macroeconomic uncertainty in the US and Europe as well as worries regarding reduced tech spending and pricing pressure in certain sectors or accounts, prompting companies to take a cautious stance and look at moderating wage costs to protect margins.”
According to Xpheno’s estimates, joining bonuses, which were the trump card to rope in talent last year, is almost getting off the table now with many roles not having the component anymore and some companies offering 60-70% less. In FY22, joining bonuses were running as high as Rs 12 lakh (for candidates with 4-8 years of experience) on certain hot skills.
Shiv Agarwal, managing director, ABC Consultants, said: “The negotiation frenzy that was there six months ago is gone now and 50-100% jumps are rare. For average candidates companies offer 15-20%, while for top talent, many companies are still willing to loosen their purse strings to a 25-35% jump.”
Experts said an oversupply of talent is also leading to a drop in the negotiation powers of job seekers.
“There is also additional supply of ready talent in the market which includes companies’ internal entry-level talent who got skilled over the last few years, tech talent laid off by Indian start-ups, as well as the availability of tech professionals who’ ve been laid overseas and are now looking to return to India,” said Bhatt of EY.
Talent seeking high revisions and negotiating with counteroffers are now put on the backburner, while response time and turn-around time for offers have also increased drastically, said experts.
“Companies are willing to go past candidates who negotiate too hard,” said Aditya Narayan Mishra, CEO of Ciel HR Services.
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