Make no mistake, the good times for IT and BPO industry has gone and the impact of the global economic meltdown is now being felt by the employees in the form of lower increments.

A report in the Economic Times suggested that India’s second largest IT company Infosys would be handing out single digit salary hikes for the next financial year and in doing so would be joining its peers like Wipro and TCS.

The article said that IT companies were either deferring the salary hikes or looking at dishing out anything between 7-9 per cent increments as lower demand for services from the US and Europe eroded their bottom-lines.

The newspaper quoted Sandeep Mahindroo, Senior Manager (Investor Relations) at Infosys to say that wage inflation would be lower in the coming fiscal and will be in single digits. It will also be difficult to predict whether it will be in low or high single digits, he said at the annual conference organized by Credit Suisse.

While this means pressure from salary costs would reduce in the next year, there is also a feeling that attrition rates would come down as uncertainty abounds in the entire IT and BPO industries.

In the past the IT services industry has doled out annual hikes in the range of 13-15 per cent which often meant that the mid-tier and smaller IT companies have often found it difficult to find talent at prices that are affordable from their perspective.