Source : INDIA TODAY NEWS
In the fast-evolving world of work, companies are practically compelled to invest in artificial intelligence (AI), as failing to do so risks an immediate loss of market share and competitive edge. But these tech investments are coming at a price—workforce costs are increasingly bearing the brunt.
That’s because technology and talent spends are drawn from the same budget, says Milind Shah, managing director, Randstad Digital India, adding that employers are therefore treating compensation as a strategic portfolio rather than a uniform cost line.
advertisement
As a result, increments and rewards are being reallocated, moving away from headcount expansion and towards acquiring scarce skills that are directly tied to improving productivity and delivering real business value from AI.
There are already 20-25 per cent productivity gains in areas such as software development, testing and L1 support, says Neeti Sharma, CEO, TeamLease Digital. As a result, companies need people who can implement AI, integrate it into business processes and manage the outcomes.
“So, workforce planning is increasingly about getting the right skills and productivity from the talent hired,” says Sharma. There is strong demand for skills in applied AI, GenAI, machine learning operations and AI orchestration. Salaries for applied AI roles can range from Rs 16 lakh to Rs 35 lakh a year, depending on the role and experience.
A CIEL study also found that AI and machine-learning vacancies grew 25 per cent year on year in September 2026, compared with 6 per cent growth in overall white-collar hiring on the same job-market index. “Workforce expansion is becoming more selective as businesses are adding fewer repetitive-processing positions but expanding product engineering, AI governance, data-quality and customer-implementation teams,” says Aditya Narayan Mishra, MD and CEO of CIEL HR.
Being selective
It is not just about reduced hiring. Companies are also being selective about how they distribute salary budgets. For the next compensation cycle, Mishra says employers are prioritising differentiated increases. “Stronger rewards for critical engineering, data, security and AI deployment capability, and more restrained adjustments where skills are comparatively replaceable,” he says.
Companies are doing this based on how much value an employee’s role adds to the business and how likely the employee is to leave, rather than giving the same percentage hike to everyone across departments. Average salary increases in India were about 9 per cent in 2026.
“This trend is primarily driven by the fact that organisations across sectors are now moving from basic AI experimentation to large-scale deployment. The supply of experienced specialists remains far short of this demand. As a result, organisations are deliberately expanding roles in AI engineering, data, governance and security while becoming more intentional about the supporting capabilities around them. The era of bulk hiring is over; the focus has shifted decisively to capability-led, outcome-oriented talent models,” says Shah.
Sharma, however, adds that the opportunity is not just in hiring new talent but also in reskilling existing employees. “Companies that combine AI adoption with the right talent strategy will be better placed to grow,” she says.
High demand for AI talent
AI adoption is reshaping talent demand and skill requirements, particularly across India’s tech and IT services sector, where the shortage of skilled technology professionals remains a key challenge. According to the Experis Tech Talent Outlook Report for Q4 2026, 84 per cent of employers in India’s tech and IT services sector report difficulty in finding the skilled talent they need. AI modelling and application development (52 per cent) and AI literacy (49 per cent) are the most sought-after technical skills, highlighting the growing importance of AI capabilities across the workforce.
Alongside technical expertise, employers continue to value human skills such as communication, collaboration, critical thinking and adaptability. “As AI transforms job roles and skill requirements, professionals who combine AI capabilities with strong human skills will be better positioned to drive innovation, improve productivity and deliver business outcomes,” says Sanju Ballurkar, president, Experis India.
However, organisations that treat increments purely as an expense risk losing top talent in the long run, warns Shah. Randstad’s Workmonitor 2026 research underscores why increments need to be viewed strategically: pay continues to attract talent, but employees are likely to stay with an organisation only if it also offers a positive work experience, growth prospects and meaningful work.
Subscribe to India Today Magazine
– Ends
SOURCE :- TIMES OF INDIA
