pay increases in technology industry india are completely out of control. it apparently is very common to get a 10% hike every year, and reasonable to expect 20% if you are a good performer. look at the report on Business Standard (which has an unfortunate menu named “BS Online”) for example. the report on software salaries in india shows some alarming numbers.
* average raise in salaries is 19% - how far can it go? take a typical employee with about 5 years of experience for example. he/she can expect around Rs.1,000,000 (10 lakh rupees) a year, roughly equalling 25k/yr at upper end. appreciation of the rupee from ~Rs.47/$ to about Rs39/$, combined with inflation will surely decelerate this, if not the hard mechanics of cost doing business in india to begin with. combine that with the mandatory costs of redundancy, travel and process inefficiencies, there is no cost saving in setting up a shop in india! this rise in pay levels isn’t sustainable by any means.
* 70% of talent has less than 5 years experience - tells me that good talent stopped going abroad for MS, and started working locally. h
mm.. may be a good coincidence with reduction in H1-B quotas? may be a topic for freakonomics. anyway, there is plenty of engineering colleges that spew out tons of engineering graduates (to the tune of about 500,000 per year according to some estimates), but not much is experienced talent. it’s very common to see single guys from middle-class backgrounds with 3-4 years of experience waltzing through the good life in a software. heck, hiring is following suit. Check out Google fishing for yuppies at a mall.
Footnotes:
* the compensation is spoken in terms of CTC (”Cost To Company”), which is the sum of gross pay and benefits
* candidates want brand names, and are less interested in the work they would be doing
* candidates (even good ones) are grossly under-prepared for interviews
* brand names matter. IIT’s, IIM’s, etc are the only sure bet of good quality talent
2 responses so far ↓
1 a man somewhere in the bay area // Sep 17, 2007 at 12:43 am
Inflation in salaries is as high as 10-20% only at the lower levels. At higher levels, as salaries get greater than 50% of US equivalents, I think annual raises get smaller. Agreed it is not sustainable, but cost of living (read: housing costs) are high enough to justify the need for these kinds of salaries.
2 spandana // Sep 17, 2007 at 5:08 am
for what i see, the 50% ceiling isn’t holding any more either! for once, the competition of middle and upper management is more fierce than lower rungs. and then, the right experience and fit will probably fetch probably the same kind of pay as in the valley.
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