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-high salaries that AI professionals garnered a year ago when demand for talent far outstripped supply, according to recruitment firms and industry insiders.

Average salary increases for new AI roles, such as 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, executives at Teamlease Digital and Xpheno said. Tech industry pioneers are not in a rush to hire, instead shifting their focus to investing in upskilling their own in-house talent while they wait for more AI use cases to emerge, they said.

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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.

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According to Xpheno data, the available talent pool of AI-skilled professionals in the technology sector in 2024 is around 360,000. In the past year, net headcount has grown by just 1%, mainly due to replacement of retirees. “India, primarily a services market, is poised for a surge in mainstream consumption of GenAI and AI in general,” 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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