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Bangalore tops in salary for MNC R&D Cos

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CIOL Bureau
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BANGALORE, INDIA: Despite the global economic downturn, the average salary paid at the MNC R&D companies in India is high and it is leading to undue pressure to level off compensation, says a study conducted by Zinnov Management Consulting, a management consulting firm.

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According to Zinnov's annual ‘Compensation and Benefit Study 2009’ released on Thursday, Bangalore stands highest in its average salary for MNC R&D companies followed by Pune and Chennai.

The study spread over these key cities covered the compensation and benefits analysis of Software Product Development companies, said a press release.

Dwelling into details of some of the trends of compensation across these companies, the report highlighted that the year 2009 has seen a plateauing of salary with over 27 per cent of the participating organizations announcing a salary freeze across the board.

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This percentage is further expected to increase in the coming months, it said. The average increment for 2009, as announced by a few of the participating organizations, ranges from 5 per cent to 12 per cent.

Of all the participating companies in the survey, 15 per cent have postponed their merit increase cycle and will take a call based on the economic scenario at a later stage, the release added.

Similarly, 12 per cent of them have announced salary cuts either to the senior management team or across all levels. The pay cuts range from 5 per cent to 10 per cent across organizations.

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It highlighted that companies are shifting focus to the variable pay component to reward and retain top performers as opposed to fixed pay and some of them have even restructured their compensation, linking employee rewards to individual and organizational results.

“The economic condition has undoubtedly had a very high impact on the compensation budgets of R&D organizations across and are currently being challenged to balance their need to retain key talent while responding to the economic pressures,” said Chandramouli, director – Advisory Services, Zinnov.

“Organizations are also being proactive in managing people cost as it constitutes to about 62 per cent of the total operating cost. Additionally, the concern over soaring salaries at these R&D centers and the current economic down turn has put undue pressure to level off compensation,” he added.

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