Senior executives salaries take a beating

ts no secret that new economy's most flaunted mantra - brainpower can't be tallied on a ledger sheet - has exploded. Smart techies, whose smart ideas were to be leveraged to build winning technologies and brands, had to contend with salaries crashing at twice the speed of the Nasdaq index. Contrary to popular perception rank and file IT workers are not the lone victims of a brutalised job market; salaries of tech moghuls, frontline drivers of the e-volution, have also been severely pounded. According to a recent Information Week survey. the big bucks synonmous with talent wars have stopped rolling and for the first time in a decade IT salary figures will reflect negative growth. Compensation of managers has declined by 8 per cent in the US. In India the trend is no different. Although specific statistics are unavailable everyone acknowledges that the financial cornucopia has dried. In the boom period senior executive skills were scarce and they could command whopping salaries between Rs 2.5 and Rs 3.5 lakh for every year of experience. Cushy perks, hefty sops and massive bonuses were attractive toppings on the baseline figure. With the tech meltdown, skilled managers have been divested of the vintage label and average salaries have plunged to Rs 1.5 and Rs 2 lakh for every year of experience. Moreover lifestyle allowances in the form of perks have been ruthlessly savaged. Zack Matthew HR Manager Rubix cryptically comments. "Earlier companies were overgenerous as they were thinking of the Big boom."

Most companies have however resisted away from directly slashing salaries except in certain organisations such as Hewlett Packard where senior management opted for voluntary cuts. The downward trend in salaries has been largely affected in four ways: freeze in salaries, lower increments, changes in salary structure and withdrawal of perks. Vipul Agarwal CEO Zend Consulting Services states: "At not to many places have employers said that you will now get lower salaries. Fifty per cent organisations have left salaries unchanged and only about thirty per cent have downgraded salaries. I have also seen some organisations giving a raise too - but this has not been like previous years." The preferred route toward downscaling salaries has been to change the ratio between fixed and variable pay and linking the latter to performance. Pay for performance method - largely adopted for compensating marketing professionals - is emerging as an attractive compensation option to reward employees, identify performers and keep costs low. Anand Rao HR Manager Tenet Software claims. "The CTC (cost to the company) has remained the same. The only change has been in terms of ratios between fixed pay and incentives. The fixed pay across companies have taken the maximum hit but this has been taken care by incentives based on certain performance ratings such as customer satisfaction index and revenues generated to name a few." A senior manager working with Sasken Technologies concurs "Top level managers have taken a cut. The fixed component has shrunk and companies have linked variable component to performance."

Senior level compensation has also fallen more drastically than mid-level professional salaries. Says the senior manager "Salaries of mid-level professionals are also linked to performance but if performance pay constitutes 30 per cent of the component for mid level professionals, its 80 per cent for senior level professionals. Zack Matthew's answer was 20 per cent and 80 per cent on being asked whether the comparative percentage fall in mid-level and senior level salaries. Most companies are loathe to disclose figures but added proof of a steeper erosion in senior salaries is the hike they can expect on shifting. Mid-level professionals earning between Rs 500,000 and Rs 10, 00,000 can still expect a 10 and 15 per cent rise on switching jobs while the possibilities of a significant salary cut are real for senior employees. Admits Vipul Agarwal, " I know of cases where my candidates were getting 35 lakh + and are now ready to work for less than 30 lakh (forget a raise)." On condition of anonymity an out of job director working in a high-profile start-up admitted that after a three month job search the highest salary he received was Rs 22 lakh. In the previous job his annual salary of Rs 37 lakh. An HR manager of a telecom start-up attributes the fall to lack of relevant years of experience. "Salaries are increasingly linked to relevant years of experience. A senior manger with 15 years experience may possess only 10 years of relevant experience. "

In a buyer's market for IT talent, conservative estimates place percentage fall in salaries for senior executives between twenty and thirty per cent. Not all sectors have been similarly affected. Hardest hit have been senior executives working in web related, e-com and telecom companies. Adds Vipul Agarwal. "Large organisations, who have been profitable, have maintained salaries. The worst hit have been middle-level (500 to 1000 employees) and smaller organisations". However certain sectors have also remained stable. Salaries of senior managers involved with call center operations are on the rise due to an acute shortage of professionals with business know-how in the area. According to Information Week, the highest-paid skills today are those relating to Internet security and wireless infrastructure. Worldwide IT managers working in areas such as wireless and Web infrastructure, enterprise resource planning and Web security and design will earn higher salaries this year.

Most senior managers, however, have taken the erosion in base salaries rather well. Confesses a senior manager in HP."Earlier salaries were artificially inflated; the work was superficial. Mangers are reconciled to the market situation". Also most senior employees are more concerned about keeping their jobs and companies afloat rather than pulling in fat raises and bonuses!.

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