Salary Superseding Inflation, Hybrid Workforce: 5 Trends Changing Tech-Talent Landscape
Special Feature

Salary Superseding Inflation, Hybrid Workforce: 5 Trends Changing Tech-Talent Landscape

The Covid-19 pandemic changed the workplace fundamentally. And nowhere is that more apparent than in the market for technology talent. The focus is now on seeking domain expertise, techno-functional roles, ‘total’ reward and new benefits. The focus is also on flexible work and a hybrid model with nine out of ten employers having remote working policies and a bulk of organisations incorporating new templates such as workcations. Data from Nasscom and Deloitte’s report shows that the growing demand for talent has led to average employee costs constantly rising in the technology sector. In fact, every second organization recorded compensation cost growth superseding their revenue growth rate.


If we consider the numbers for the last decade, barring 2020, average salary growth in the technology space has been higher than inflation. The salary hikes were in double digits for seven straight years, from 2010 to 2016. The salary hike did fall in 2020 to around 4.4%, or about half the recent average of 8.5-9.5%, but has since bounced back.

Source: Nasscom-Deloitte Compensation Study 2022 I View in an Interactive Format | Download the Data

The average increment in the technology industry is projected to be in the range of 8-9.5% in 2023, as per the NASSCOM-Deloitte report. The IT products and digital/e-commerce sub-sectors are expected to continue giving double-digit increments in 2023 for the second year running.

If we look at companies by their size, those with annual revenue of less than Rs 4,000 crore are projected to be more aggressive in rewarding employees. At the same time, there are differentials across the hierarchy. As the impact of inflation is more pronounced at lower levels, salary increments for such staff are typically 150-300 basis points higher than senior management.

Also read: Post-IPO, Working on Compensation Structures and Streamlining People Processes: Nandini Mehta, Metro Brands

As the global economy slows down and the business environment turns volatile, many organizations are managing their variable pay strategy diligently and the quantum of actual bonus pay-outs remains within 90-110% of the target bonus for more than 95% of the population.

To ensure retention, organizations continue to reward top performers disproportionately. The Bell curve, for companies that use performance ratings, has shifted slightly towards the right as compared to the previous year. This indicates higher differentiation in the identification of low performers. On average, top performers get 1.7-1.8 times the pay increment given to average performers.

Given the rise in demand for niche skills, the tech sector is recording a rise in the prevalence of salary premiums across different skill sets. The rising demand of digital and technology skills across sectors has led to an increase in cross-industry competition for skills with digitization, automation, artificial intelligence, machine learning and cloud computing are among the skills that are in high demand and are being hired from across sectors.

Source: Nasscom-Deloitte Compensation Study 2022 I View in an Interactive Format | Download the Data

While compensation remains a key part of people management, here are five strands on how things are getting redefined in the tech sector’s HR space.

Hybrid work model

The ‘new normal’ consists of hybrid work models with sophisticated remote work policies and a focus on the impact on employee productivity. While this has had a spinoff with an increase in ‘moonlighting’, or an employee working for more than one employer, the hybrid work environment is here to stay.

In fact, 95% of organizations have ‘remote’ staff policies, nearly 65% of technology players want all their employees to work in a hybrid model and around 40% of the workforce is now located outside of the work location.

At the same time, 73% of employees seek flexible remote work options. Moreover, 77% of those who work hybrid showed increased productivity, with 30% doing more work in less time, and remote staff displayed higher productivity in the pandemic, according to 68% of companies polled.

Hiring practices

With emerging hybrid work models, HR practices like the traditional hiring process have been completely reformed post-pandemic. As much as 80% of employers have shifted to remote interviewing and hiring process with 94% using virtual event platforms, close to half using interview coaching and analytics tools and 39% banking on video interviews.

Companies are also moving towards project-based cross-functional work partnerships while learning and development (L&D) are evolving. There is also a 20% year-on-year increase in internal mobility with 66% employers increasing their budget for L&D.

Organizations have also increased focus on hiring from campuses and mid-sized organizations are also hiring fresh talent. As more mid-sized companies are starting to hire directly from campuses, more hiring is being observed from tier 2 and tier 3 campuses. In fact, medium-sized companies now make up about 41% of all campus hires.

Also read: Benefits Buffet: Flexible Benefits To Create Higher Employee Value Proposition


The pandemic has shown that employee benefits are more than just remuneration. Benefits emerging out of the new ways of working include a high focus on increasing flexibility for employees through monetary and non-monetary offerings.

This covers aspects such as boundaryless or permanent work-from-anywhere model; partial permanent work-from-home and choice-based work-from-home policies; job sharing programs; parental leave policy incorporating 30-weeks of gender-neutral parental leave and unlimited parental leave policy for the first year of childbirth; compressed work week; ad hoc leave; and personalized working hours.

The new practices also include enhanced leave policies to support work-life balance with reset and recharge leave; gender reassignment leave; and workcations and periodic meetings with quarterly summits for the socialization of teams.

Learning & Development (L&D)

Organizations are strategically leveraging monetary and non-monetary instruments which indicate a high correlation with the retention of key talent with a focus on L&D to build long-term capabilities. With a positive impact on retention observed from L&D investments, companies are planning for short-term and long-term skill supply.

Three key factors here include the focus on building cross-functional roles, reskilling/upskilling training rather than new hiring and how companies are willing to hire someone with transferable skills and train them.

Also read: Enterprises and Companies Can Use AI to Deal with The Salary Problem – Here’s How

Diversity, Equity and Inclusion

Organizations are also moving towards building a culture of diversity, equity and inclusion (DEI), with 87% of organisations already formulating or adopting such policies.

Companies that invested in a diverse workforce are better equipped to attract talent and engage employees more effectively. This explains why HR departments are evolving and reforming the hiring processes to reduce bias, from building diverse interview panels to mandating data-driven reporting against diversity goals.

What’s more, business leaders understand that DEI is a business priority with 77% of Indian employers terming it as crucial for organizational performance.


As the tech sector moves beyond the pandemic, the changes in how people work, where they work, who they work with, and the technologies they use are here to stay. Many of these changes started prior to the pandemic, but accelerated after Covid-19, and have now become permanent aspects of the workplace.

At the core of these changes is the emergence of the hybrid workplace, where some workers are on-site and some are remote. This new way of working impacts how work gets done, the workplace, and the workforce.


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