With the war for talent raging on companies are adopting newer strategies to hire and retain top talent.
Performance appraisal is being done on an annualized basis and the anniversary hikes are doled out based on the performance. For outstanding performers companies are promoting to higher level positions.
To retain top talent, IT major Wipro has now decided to review performance on a quarterly basis rather than annual. Around 70% of employees seen to be high performers stand to benefit from this move. “We doubled our fresher intake for FY22 compared to previous year. Our plan is to double this again in FY23. We have decided to increase the frequency of promotion cycles for 70% of our colleagues from junior bands,” Wipro CEO Thierry Delaporte said after the company’s January-March earnings.
Anniversary Hikes
the top five IT companies were earlier giving hikes in the range of 6-10% to the lower-end performers in select skillsets in the digital space have now hiked this slab to 15-25%
Once the pressure on talent supply eases companies will revert to anniversary hikes and performance reviews.
Growing Demand
Nasscom has estimated that the demand-supply gap for digital talent will increase 3.5X to around 1.4-1.8 million jobs by 2026.
The gap between supply and demand is widening year after year putting pressure on wage inflation. This will eventually lead to margin contraction impacting the overall profitability of Software Services companies.
Skill mismatch
As per the estimates the demand for the skills are different while the availability of the technical skills leading to disruption.
Strategies -
1. Increase entry level salaries during campus hiring
2. Promoting high performers - change in policy
3. Quarterly Performance Reviews
4. Retention Bonus
5. Hire aggressively with decent spike
6. Liberal perks
7. Overseas assignments and postings
8. Reskilling the engineering team
9. Hire Train Deploy
10.Pro-active hiring and keeping a bench
