India’s booming IT market driving up wages

India’s buoyant IT market has created shortages in skilled manpower, pushing up wages across IT jobs, particularly in emerging areas such as artificial intelligence (AI), cloud computing and cyber security, a study has found.

According to the 2023 Computer Weekly/TechTarget IT salary survey, almost two-thirds of Indian respondents expect their pay to increase in the next 12 months, while 19% expect a bonus, underscoring the tight IT labour market in the subcontinent.

The optimism follows salary increments reported by all respondents last year – 39% of IT professionals received between 5.1% and 10% more in compensation, while a fifth saw their salaries grow by between 10.1% and 20%.

Last year, IT professionals across job functions in India received an average of $47,824, pushed up by the higher salaries of senior executives such as IT directors who earned $79,700.

The macroeconomic uncertainty has not deterred Indian IT professionals from looking for a new job in the next year, with almost half expecting to do so and just 28% wanting to stay put in their current role.

The top roles that Indian employers are looking to fill in the next 12 months include AI, machine learning and data science; IT infrastructure and cloud operations; application development; IT project management; business intelligence and analytics; and cyber security.

The tech talent crunch has also led to fewer layoffs, with nearly 70% of respondents reporting that their employers did not eliminate IT staff in the past year, while six in 10 said their employers had expanded their IT workforce this year.

More Indian employers now see work as something their employees do rather than a place they go to. Four in 10 respondents now work from home thrice a week and just a fifth say they work primarily in the office. This is congruent with growing hybrid work adoption in India.

When it comes to issues on diversity, equity and inclusion (DEI), almost two-thirds of Indian respondents said their organisations have mature initiatives in place, with plans in the pipeline to expand, optimise and improve their DEI efforts.

This includes improving gender equality, with 42% disagreeing or feeling neutral about their company having plans to improve the balance between women and men in IT teams. More than half agreed that recruiting more women could help to alleviate the skills shortage.

Meanwhile, Indian organisations have their work cut out to narrow the gender pay gap, with male respondents earning 2.5 times more than their female colleagues on average, according to the study.

According to Forrester, technology spending in India is expected to grow by 9.6% this year, driven by public sector digital initiatives as well as investments in tech outsourcing, hardware maintenance and telecoms. 

In its India tech market outlook for 2023 and 2024 report, the analyst firm noted that growth in IT spending in the subcontinent is set to return to pre-pandemic levels this year, with growth expected to be even better next year.