Software salaries rise 19 pc: Survey

NEW DELHI, INDIA: A typical Indian software professional got an average salary increase of 18.7 per cent in 2007, an improvement over 18.3 per cent increase recorded in the previous year.

This is revealed by a nation-wide survey carried out by IDC India for CyberMedia group’s flagship publication Dataquest, covering 2,806 IT professionals.

The results, to be published in the forthcoming issue of the Dataquest magazine, reveal that foreign multi national corporations (MNCs) pay higher salaries. And among MNCs, those engaged in R&D pay the highest. Not surprisingly, the Top 3 paymasters in the industry--Cadence, Sun Microsystems, Honeywell Technologies--were all engaged in R&D. Seven out of the Top 10 in the list included MNCs like IBM, Capgemini and CSC.

The industry average salary grew by 11 per cent in 2007 to touch Rs. 6.2 lakh per annum. This growth is encouraging compared to a drop of 3 per cent in the industry average salary in 2006. This average salary increase is considered significant considering that the software talent pool of the top 50 companies has grown sharply-- at nearly 30-40 per cent annually, in the last three years. It is generally expected that with the on-campus recruitment of thousands of freshers, the average salaries should go down.

Though Dataquest’s base of 31 companies surveyed comprised IT services players, R&D centres of software vendors, MNCs, hardware players and even systems integrators and resellers, no big disparities in salary levels were noticed.

While Cadence and Sun are the top paymasters for all employees with up to 10 years of experience, industry bellwether Infosys is more generous with the salaries of its senior and experienced employees. Infosys is one of the best paymasters for professionals between 10-15 years and more than 15 years of experience.

Going by the salary levels, the study says that for fresh engineers it makes sense to embark on a career in a Software R&D firms. For the more experienced professionals, it adds that, the salary levels at Infosys match with the best.

The survey points out that there is virtually no correlation between ‘salary levels’ and ‘satisfaction with salary’. While TCS employees rank their company at No. 4 in terms of ‘satisfaction with salary’ it is ranked at No. 13 in terms of salary. Infosys is ranked at No 12 in terms of salary but is ranked No. 28 in terms of ‘satisfaction with salary’.

Commenting on the survey results, Dataquest Chief Editor Prasanto Kumar Roy says, “We knew that high salary didn’t always mean high satisfaction, but the sheer extent of disconnect is amazing. There was less than 8% correlation between salary and satisfaction with salary!”

Roy adds, “What it means is that companies who have their act together on employee satisfaction can manage a lower wage bill—and still have satisfied employees. For instance, HCL Infosystems was way down at #23 in salary rank, but it topped the charts on employee satisfaction with salary!”

The report points out that the Indian tech companies must find a way out of this ever increasing wage rise as rupee appreciation squeezes their margins even further. The not-so-simple answer is, of course, to improve employee satisfaction. But some companies are also trying out a six-day week, selectively, to offset the impact of rupee appreciation on their margins by increasing billable hours.

Many more companies, including some of the MNC captives, may also do away with a five-day week that is a strong part of their culture, to bring in competitiveness on the HR front.

Young Workforce

Professionals with less than five years work experience today form 70 per cent of the 1.6 million strong Indian software work force. Just 1 out of 5 professionals has between 5 to 10 years of experience and less than 1 in 10 professionals has over 10 years of experience.

Forty per cent of the professionals polled for this survey had obtained their qualifying degree from the South Indian states of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Pondicherry. Those with qualifications from western Indian states of Maharashtra, Gujarat and Goa made up about 20 per cent cent of the professionals. Educational institutes from India’s capital, New Delhi contribute 6.5 per cent of the professionals.

Engineering graduates, post graduates and masters in computer applications constitute about 70 per cent, and MBAs make up for about six per cent. Post graduates and graduates in humanities, commerce and sciences and those with diploma and certificate programs in computers make for the remaining 24 per cent.

Even though the average age of the professionals has increased marginally to 28.1 years (from 27.5 years), lack of experience poses challenges at the middle management level, the Dataquest-IDC study adds.

The average age has been derived based on data from over a dozen companies that participated in the magazine’s Best Employer Survey for three consecutive years. These include TCS, Infosys, Wipro, Tech Mahindra, Patni, CSC, Aricent, Hexaware, Zensar, HCL Infosystems, GlobalLogic, RMSI and Cadence.