AI, Data Science, ML to see continued investment despite IT slowdown: Report

Global Capability Centers (GCCs) are likely to offer increments, given their growth or setup phase.

By  Indrani Bose| Jul 29, 2025 5:35 PM
Finance stands out as a leading function for growth and compensation, driven by reporting complexity and strategic roles. Despite broader IT constraints, niche areas like AI, data science, and machine learning will continue to attract investment. In contrast, functions like recruitment and operations may lag due to reduced hiring activity.

IT and ITES services face growth and margin pressures, resulting in limited or no increments, except for select key talent. However, Global Capability Centers (GCCs) are likely to offer increments, given their growth or setup phase. Manufacturing, FMCG, and especially the power sector are relatively stable, with the latter showing a strong multi-year outlook, as per a report by Teamlease.

Finance stands out as a leading function for growth and compensation, driven by reporting complexity and strategic roles. Despite broader IT constraints, niche areas like AI, data science, and machine learning will continue to attract investment. In contrast, functions like recruitment and operations may lag due to reduced hiring activity.

Roles that demand deep expertise and deliver clear business impact are taking priority. In finance, Business Finance roles are ahead of accounting or audit positions. In tech, Technical Architects and domain experts are seeing higher compensation focus compared to general project or delivery managers. These roles are harder to hire for and call for differentiated rewards, including incentives or long-term retention strategies.

Automotive

In the automotive sector, FY24–25 saw merit increases of around 12%, factoring in promotions and salary corrections. This is a slight rise from the previous year, driven by industry growth and improved profitability. External benchmarks data were used to ensure salaries remain competitive with market standards, particularly for critical roles and high-demand functions.

Roles in process engineering, EV component manufacturing, sales, purchase, and HR are emerging as compensation priorities. The EV space, though nascent, demands premium pay due to limited talent availability. Sales and HR functions also present acquisition challenges. Compensation strategies are shaped by market demand, digital transformation, and business-critical needs.

Banking

Marketing and Technology functions are key levers of growth for FY2025–26 in banking. Technological investments include modernizing core systems and migrating to cloud environments in line with banking regulations. Marketing teams are being incentivized more aggressively with real-time and performance-linked components, reflecting their direct impact on business generation.

In the banking industry, Branch Heads and Relationship Managers are emerging as critical compensation priorities, given their direct role in customer engagement and business acquisition. The bank also follows a “risk categorization” method, where employees handling higher business risks—like bringing in customers or managing high-value portfolios— receive additional rewards. Roles in the Transaction Banking Group and elite service teams also feature prominently.

First Published onJul 29, 2025 5:35 PM

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