 he meltdown in the IT sector has had a negative impact on salaries. Runaway salaries and astronomical hikes have been reined as hi-tech earners are making less money than they did before. According to a survey conducted by Mineapolis-based techies.com in July, salaries in eight of the top technology employment areas in the United States have dropped by six per cent since January. The figures in India's US-centric tech industry are not upbeat either. On an average, experts estimate salaries in India's tech sector have declined between 10 and 15 per cent, an indication that we are moving from an employee's market to an employers market.
However, in a scenario where layoffs have become the order of the day, few companies in Bangalore, with the exception of Sasken and Hewlett Packard, have resorted to a direct cut in salaries of the existing workforce. In a bid to keep employee morale from dipping, companies are deploying a variety of methods such as longer increment cycles, cuts in bonus, freeze in hikes and reduction in perks to arrest manpower expenses. According to T R Sanjay, CEO Santech Consultants: "Take home salaries have not been affected, but the CTC (cost to company) component of the salary is definitely under pressure." Rohit, a salary compensation expert at Mafoi Consultants concurs: "Perks such as membership to clubs, entertainment expenses etc are largely unavailable."
The skillful restructuring in compensation practices has, hence, not had a direct impact on salaries. The view is corroborated by a host of engineers working in companies as diverse as Co Systems, Sonata Software, Bangalore Labs, Talisma Corporation, Infosys, Trivium and Wipro that Assure Consulting randomly contacted. Most employees said they were aware that overall salaries had dropped but they had not faced any cuts in salary. In fact, employees from Bangalore Labs, Talisma Corporation, Co Systems and Infosys said they had even received a modest hike which in percentage terms were lower than last year but matched employee phpirations in the current market scenario. A software engineer working as team lead in Aditi Technologies says: "We all understand that there's a market slowdown so nobody's taken it to heart."
Significantly, the decline has not impacted all sections of employees in the same manner. There's still a shortage of qualified people but the key word is relevant experience. "For people with core domain expertise, the demand is till high. A senior manager in a networking company admits: "Employees who lack core domain expertise have borne the brunt of salary cuts. Increased competition at the entry level in a recessionary economy is the main reason for the overall salary decline." Last year, most companies were offering campus recruits salaries between Rs 1,50,000 and Rs 2,50,000. This year companies are not hiring and those who are have slashed figures by 20 and 25 per cent, " says Rohit.
The downward revision in salaries also means that employees can no longer jump jobs to increase their pay. Contrary to what has been happening in the last few years, employees can no longer quote their price. The uncertain climate and free availability of resumes has tilted the balance in favour of the employer. Companies can no more be held to ransom by demanding employees, who ask for a raise between 40 and 50 per cent at the time of joining. Companies who are hiring are not making offers beyond 20 per cent of existing salaries. Says T R Sanjay, "Recently, we even succeeded in hiring a person on the same salary she was getting from her earlier company." By and large, today, companies are now deciding salaries on the basis of experience and depending on the candidate's skill sets roughly the figures range between Rs 1,25,000 and RS 1,75,000 for every year of experience.
The figures obviously do not augur well for techies but given the current scenario, the concern is definitely not salaries. Employees, who are shifting jobs, are closely questioning companies on future prospects and looking for stability rather than salaries. "Employees who have received low or no hikes are now taking solace in the fact that they have held on to their jobs," says Rohit.
The salary index will remain bearish for a long time but in a chaotically uncertain market, the silver lining for techies is that salaries have remained flat not declined!
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