📄 Abstract
Indian IT services stands at the intersection of two forces: a USD 300 billion industry employing close to 5.8 million people, and a generative-AI transition that is simultaneously automating routine delivery work and creating acute scarcity in AI-complementary capability. This study examines a single, tightly specified HRM–economics linkage — the effect of employer skill development investment (SDI) on the wage premium earned by AI-complementary professionals relative to matched non-AI peers. Using a mixed-methods design covering 480 IT professionals and 60 learning-and-development managers across Bengaluru, Hyderabad, Pune, Chennai and Delhi-NCR, the study estimates an augmented Mincerian earnings function in which AI-complementary certification, skill development investment, and their interaction are the focal regressors. The model explains 71.2 per cent of the variance in log annual compensation. AI-complementary skill holding carries a base premium of 20.6 per cent at mean investment, rising to 36.2 per cent for employees in the highest investment quartile — evidence of a significant positive interaction (β = 0.061, p = 0.004) between employer investment and individual skill. The dose–response relationship is concave rather than linear, with a threshold near ₹18,000 per employee per year below which premium capture is weak. Decomposition attributes 36 per cent of the mean 31.1 per cent premium to scarcity rent, 32 per cent to genuine productivity complementarity, 17 per cent to signalling and 15 per cent to task-portfolio reallocation — implying that roughly a third of the premium is transitional and will erode as supply catches up. Employer-type effects are pronounced: global capability centres invest 2.9 times what mid-tier Indian firms invest and capture a 16.9 percentage-point higher premium. A residual gender gap of 4.7 per cent persists after controlling for skill, investment and experience. The study argues that skill development investment operates as a produced factor of wage formation rather than a welfare expense, and offers a threshold-based investment framework for HR leaders, a first-year return schedule for finance functions, and calibration guidance for national reskilling missions.
🏷️ Keywords
📚 How to Cite:
Dr. N Subbukrishna Sastry, Dr. Manjula Mallya M , EFFECT OF AI-COMPLEMENTARY SKILL DEVELOPMENT ON WAGE PREMIA IN INDIAN IT SERVICES , Volume 14 , Issue 8, September 2026, International Journal of Southern Economic Light (JSEL) , Pages: 11 - 30 ,