Mid-tier IT firms such as Tech Mahindra and MindTree may raise salaries by 7-12 percent this fiscal to ensure they do not lose talent to top players TCS, Infosys and Wipro, according to HR service providers.
The larger players have announced wage hikes ranging between 6 percent and 10 percent for this fiscal.
"Current environment is challenging and companies are looking at preserving their bottomline. Despite that, keeping employees' interest in mind, organisations have given hikes ranging from 8-12 percent, which is a good development.
"In general, we can expect 7-12 percent hikes for employees working with mid-tier IT companies," Randstad India President (Staffing) and Director (Marketing) Aditya Narayan Mishra told PTI.
He added that as the demand for IT services increases in the coming quarters, one can expect above-average hikes.
Last week, Infosys said its employees in India will get on an average 8 percent increase, while Wipro said it has raised salaries by 6-8 percent.
Onsite employees have seen salaries going up by 2-3 percent.
India's largest software services exporter Tata Consultancy Services (TCS) has increased wages by 8-10 percent in India and 2-4 percent for overseas workforce.
HCL Technologies has started its appraisal process and is expected to make an announcement by July-end.
Most Indian IT firms give increments around April or May.
"IT sector has been fairly conservative in terms of pay hike. We recently did a survey, where we asked some of our customers on increments in 2013 and almost 46-47 percent of the respondents said they are looking at wage hikes between 6-15 percent," HeadHonchos.com CEO Uday Sodhi said.
The IT firms are also looking at the global economic scenario, which still has not been very promising and it plays an important role in determining the hike percentage, he added.
"It is most definitely a positive action for organisations to recognise their existing employees and performers. Any hike however marginal has a significant impact on the morale and longevity of an employee," TeamLease Services Senior Vice President Surabhi Mathur Gandhi said.
Given the present situation where companies are building their employee retention strategies to battle the downward spike of demand, such initiatives build confidence in the minds of employees, she added.
"To retain talent and ensure they do not lose out to larger names, small and mid-size companies would need to ensure they adhere to some market rationalisation on compensation levels," she said.
The headhunting firms also believe that the companies should increase their spending on retention activities.
"Management and HR managers should invest in employee engagement initiatives to keep their morale high during challenging times. This will help in further controlling attrition over the next few months, as the economy improves," Randstad India's Mishra said.