Variable pay, attrition, moonlighting add to IT companies’ challenges

Variable pay or performance-linked incentives for tech professionals, moonlighting, and receding tailwinds brought along by Covid-19 have put Indian information technology (IT) firms in a spot of bother. Combined with the ongoing tech winter, soaring attrition rates, high employee costs, and squeezing margins, these have formed an odious concoction for the overall IT sector.

Variable pay has become a severe headache of late, with major IT firms grappling with whether or not to withhold employees’ performance-linked pay. Wipro was the first among the top four Indian IT majors to announce it was holding back the variable pay for mid, and senior-level employees for the first quarter (Q1) of FY23 owing to poor operating margin figures.