Shortage of talent – higher compensation


Many IT companies in India have offered higher salary increases during the increment season of this year, compared to what they did the year before. The increases appear to be particularly high at mid levels, where talent scarcity is becoming pronounced. More so in smaller companies, for whom retaining talent has become extremely challenging.

“i-Gate� has announced an average increment of 16% this year against 13% last year. TCS has increased it by 15% this year, 4 % points higher than a year ago; HCL has hiked it by 15% as against 12% last year. Mid-sized companies like Subex Systems have been giving 20% hikes across the board for the last two years, while its top performers have got a 30-35% increment.

But despite the high pay packet structure in MNC companies, India still offers a low cost arbitrage which in turn has forced Indian biggies to push up their salary levels.

Infosys’ average hike this year is said to be roughly the same as last year, at 12-15%, but the hikes for the top performers is whopping 30%, against about 8% at lower levels.

HR head of Infosys explains this difference on the grounds that ‘supply to the entry level remains god, but the supply of mid-level people is challenging. Wipro, which will announce its increments only later this year (it had given an average hike of 12% during Q3 of last fiscal),is expected to follow a similar strategy . HR head at Wipro, says when there are constraints on the budget, it’s important to differentiate top performers from the average.

While most employees are likely to rejoice at such salary increases, companies are far from enthusiastic. The issue now is how long they will be able to maintain these levels of increases. The general cost factor is becoming a concern said a COO of another company. In the salary game, everybody is a loser considering particularly that billing rates have not gone up dramatically.

HR managers in the biotech field appear to have realized that they would not be able to attract and keep top talent if companies do not open their purse strings long and wide. Some surprisingly pleasant facts expressed by the concerned top management personnel are,

A Rs. 2.5-3 lac package is now not foreign to the sector even for a fresher and in a year he is able to scale up to a Rs. 4-6 lac bracket. And the scene is getting all the same, especially for those who add to their qualifications on a regular basis, given the rapidly evolving technologies.

At the team leader stage the salary often crosses the Rs. 10Lakh mark, and the project head can look forward to pocketing a Rs. 25-lakh annual sum.

At the senior levels there has never been a cap . Senior biotechnologists whose skills are difficult to replace with get paid handsomely. In a company of India called Biocon alone there are at least four people who earn more than Rs. 1 cr ($ 250,000) per annum.

The biotech sector has money It’s only a matter of companies wanting to part with it. That can only happen if they find an exceptional talent. Companies seem to have realized the need to take care of the fresh candidates. In case of IT its becoming difficult between retaining employees and clients as the billing rates have not gone up to meet recurring increases in compensation to employees.

  • RAMU 2007