The country’s second largest software services firm Infosys has raised the salary of its employees working in the country by 6-7 per cent and by 1-2 per cent for onsite workers, effective April 1.

“We have increased salaries. We have given salary hikes of 6-7 per cent for offshore and 1-2 per cent for onsite employees, effective April 1,” Infosys CFO Rajiv Bansal said.

The increase in salary and promotions that have been rolled out and the investment in new visas is likely to impact the first quarter margin by about 3 per cent, he added.

Headcount

Infosys had added 10,997 employees (gross) in the last quarter of FY’14 and 39,985 during the fiscal to take its total headcount to 1,60,405 people.

“This is the second time we are giving compensation increase over the last nine months. Nine months back, we had given a compensation increase of 6-8 per cent offshore,” Infosys CEO and MD S D Shibulal said.

Promotions, salary hikes

The company has been giving incentives to its employees, including promotions and salary hikes, to boost the morale and check the rising attrition.

The Bangalore-based company, which has trailed its peers TCS and Cognizant on growth, is also looking at weeding out non-performers to improve efficiency.’

Non-performers

People following the developments at the firm said that the focus is on retaining quality talent, while letting go non-performers, something which founder and Executive Chairman NR Narayana Murthy has reiterated at various fora.

About 12,500 employees have been promoted since October.

Infosys, as part of performance improvement programme, allows ‘poor performers’ to undergo training. These employees will then undergo a review and those who fail are asked to leave.

Murthy back at the helm

Murthy was brought back at the helm in June last year to try and pull Infosys back on the growth track following several quarters of dismal performance.

Within weeks of his return, Infosys increased the salaries of its employees in India during 2013-14 by an average eight per cent.

In 2012, Infosys had delayed the hikes and salary increases were given only in October when the company came under pressure due to increments offered by peers.

In January, Murthy had said the company is looking at returning to its practice of announcing salary increments effective April.

According to global HR firm Aon Hewitt, employees in the IT sector can expect an average salary increase of 10.2 per cent during 2014.

Increments in the software products industry are estimated at 10.8 per cent and knowledge process outsourcing at 11.9 per cent.

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