Slowdown hits pay packets, perks in software sector

NEW DELHI: Software professionals, who till recently enjoyed one of the best
perks and packages in the industry, have begun to feel the pinch with their
annual increments being brought down to more realistic figures during the past
few months. It is also feared that after targeting their increments, employers
will be forced to slowly bring down the perks, which currently include
insurance, personal loans, club memberships and extravagant vacations.

This was one of the many interesting trends that were revealed in the latest
compensation survey of the software industry conducted by Dataquest.

However, notwithstanding the US slump, software professionals still continue
to be some of the highest-paid professionals in the country. Consider this: the
graduates entry-level salary varies between Rs 1.25 lakh and Rs 2.4 lakh per
annum, or between Rs 10,400 and Rs 20,000 a month. Within two years, this can go
up to between Rs 2.4 and Rs 4.5 lakh a year (Rs 20,000-37,500 a month).

For those with experience of between two and five years, pay packets range
between Rs 3.1 lakh to Rs 5.9 lakh, a year (Rs 25,800 to Rs 49,166 a month). And
for those with five to ten years of experience, the figure is a whopping Rs 4.7
lakh to Rs 13 lakh a year (Rs 39,000 to Rs 1.08 lakh per month).

Apart from the experience, salaries also vary widely depending on the job
profile and the firm’s reputation. The survey also determined that middle
management staff in this field, with more than ten years of experience, received
salaries ranging from Rs 8.5 lakh to Rs 18 lakh. Senior management staff
received Rs 14 lakh to Rs 25 lakh, while top management staff received anywhere
between Rs 20 lakh to Rs 40 lakh a year.

A 1995 Dataquest survey had revealed that those with less than three years’
experience received pay of under Rs 1 lakh a year. Today, that figure is way
below even the salary for entry-level professionals, which range between Rs 1.4
lakh and Rs 2.4 lakh. Six years down the line, the individual can expect this to
rise by 100-200 per cent. The 1995 survey had also showed software professionals
heading for MNCs, as their salaries were well above the average pay packet.
However, it is a reverse trend, with most Indian firm being the most favored
destination for professionals.

Salary hikes in the software industry follow the technology route these days
upgrade or lose with almost the same lifecycle. This is where reality has set
in. Over 30 per cent of those polled had received between 11 per cent and 20 per
cent increases in salary at their last appraisal.

Another 20 per cent received a 21-30 per cent raise, while a whopping 14 per
cent had their salaries hiked by more than 40 per cent. In a previous salary
survey, it had been found that IT professionals were jumping jobs for a 25 per
cent jump in salary. The software industry’s aggressive pay hike policy is one
of the ways of dealing with this stream of employee attrition.

Infosys Technologies, which once doled out average increments of over 75 per
cent last year, notched up a mere 15 per cent this year. Other industry majors
Wipro, Satyam and NIIT fared no better. However, despite the downturn in pay
packets, attrition in the industry is as high as ever.

These findings are part of a ‘Compensation Survey’ conducted by Dataquest
in April and May 2001 among India’s top software firms. The survey was
based on information provided by HR heads of the top software firms in India and
field-surveys among employees of these companies by NFO-MBL India, a market
research agency based in Bangalore.

NFO-MBL India spoke to 270 employees across the industry to get the inputs
from software professionals. The complete survey findings have been reported in
Dataquest’s May 15 issue, to be released in print a well as online at www.dqindia.com
on May 15.

Dataquest executive editor Rajeev Narayan, says, "The exponential rise
in salaries that industry saw in the last few years has sobered down. No one is
facing pay cuts here yet, but increments and perks are definitely southbound.
And for some time at least, those fantastic pay hikes of 50-100 per cent are
out."

Some of the top companies have shifted to the US model of performance-linked
increment computation, housing, car loans, training sponsorships, club
memberships, overseas trips, will soon either fade away or will cease to happen.
But ESOPs remain hot as ever, even if current market prices mean ESOPs, for the
moment, are not worth much.



Till a few years ago, company-sponsored life or medical insurance plan was a
novelty. Now, it is a given 84 per cent of those polled had insurance cover paid
for by their companies. Nearly 45 per cent had companies providing them with
subsidized food. Close to 40 per cent were eligible for ESOPs, while housing
loans and training sponsorships stood at par, with 39 per cent saying they were
eligible for both. Following closely with a 26-per cent following were employees
eligible for car loans and club memberships.

Some snapshots of the survey:



* Software professionals with 10 years’ experience in a Top 10 company
make a little over Rs 11 lakh a year.

* The top-end salary for a vice-president in a firm was Rs 4 crore per year! He
is based in the US and this was the Rupee conversion of his total package.

* HCL Technologies topped the salary list in the entry level and till the two
years’ experience category, offering between Rs 2.6 lakh to Rs 4 lakh,
annually.

* At the lower and middle levels, perks are negligible. It is only at very high
levels that perks actually start having a meaningful difference.

* There is an invisible freeze on increments across the board. While no one is
talking about it, harsh times have ensured that no one is complaining about it,
either.

* Wipro still topped the ESOPs list, with 75 per cent of its employees covered
under the ESOP program.