Decreasing premium for AI jobs: As the supply of talent increases, the premium for AI jobs falls.

AI and ML Jobs

Hiring for artificial intelligence (AI) and related roles is set to fall in 2024, softening the record salary premium that AI professionals garnered a year ago when talent demand far outstripped supply, according to staffing firms and industry observers. Average salary increases for new AI roles, including AI/ML engineers, robotics engineers, natural language processing engineers, ethics engineers and data architects, have fallen to 15-25% from 50-60% a year ago, according to executives at Teamlease Digital and Xpheno. Tech industry pioneers are not in a rush to hire, shifting their focus to investing in upskilling their in-house talent while waiting for more AI use cases to emerge.

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“Active recruitment of AI talent has slowed significantly in recent quarters due to a decline in demand for AI talent and an increase in in-house upskilling of AI talent,” said Prasad MS, head of workforce research at boutique recruitment firm Xpheno.

“Negotiation room for AI roles has shrunk by over 50% due to slow hiring activity despite ample talent supply. Accordingly, job offer hikes have been kept in the 15%-25% range, which is typical for junior to mid-level hires. Outlandish offers in the higher percentage range are fewer as startups continue to stay away from the hiring market,” Prasad said.

“The AI ​​demand-supply gap was close to 50% in 2022, exacerbated by the skills shortage. With improved supply in the market and improved skills, the gap is now in the range of 20%-25%,” said Krishna Vij, business head, Teamlease Digital.

“Since 2022, demand for AI has surged across the tech industry, outstripping supply. Companies have increased salaries to attract AI talent, implementing hikes of 20-50%. However, over the past year, companies' upskilling efforts have led to a decline in the number of job openings while increasing the supply of talent. As a result, AI salary increases have also declined,” she added.

According to data from Xpheno, the available talent pool of professionals with AI skills in the tech sector will be around 360,000 in 2024. Over the past year, net headcount has increased by just 1%, mainly due to replacing retirements.

“India is primarily a services market, so it is well prepared and will be watching from the sidelines as the mainstream consumption of GenAI and AI in general surges,” Prasad said.

The salary range for junior-level candidates with niche AI ​​skills is between Rs 8 lakh to Rs 1.5 lakh, while at the mid-level it is between Rs 2.5 lakh to Rs 4.5 lakh.

“IT services will take some time to fully recover,” said Rohit Bhatia, president of talent management at Quess Corp. But he added that niche talent will fetch a premium as GenAI use cases expand and create new demand.

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