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IT’s Loaded Pashas

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DQI Bureau
New Update

During the past few years, Indians viewed IT as more than just another

industry. As a profession, it is supposed to have al-



tered the rules of the methods of making money. At the risk of sounding
simplistic, one could say that the success stories of IT professionals across

the country proved that one didn’t have to belong to a successful business

family to make it big–and that knowledge pays. As word of these ‘IT

professionals’ salaries’ got around, even experienced professionals from

other sectors like manufacturing, finance and banking expressed a keen desire to

"get into IT".

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As HR managers in IT companies would vouchsafe, moving to a better job and

negotiating the salary was often not just about moving along the career path. It

was also about being able to move to a bigger house, paying off family loans and

more…The slowdown killed many such dreams and with the same naiveness, IT

aspirants started equating the flaws of the dotcom bust with IT itself. Well,

last year was bad no doubt and as per Naukri.com estimates, salaries across the

IT industry in India fell by 10% to 25%. Even in companies where salaries have

not dipped, there was a freeze on salary hikes. When it came to downsizing, the

most expensive resources were asked to go first and were in fact, replaced by

new recruits at lower salaries.

IITs

RULE:
A degree from any

of the IITs fetches many times the starting salary that a

diploma or degree from lesser institutions can command. RECs

are not too far behind in the pecking order

Among those who survived the downsizing drives in companies, employees were

asked to take salary cuts (upto 30%). Increments in the range of 5-10% is the

industry average as opposed to average of 25-40% two years back. There is more

respect for rules across organizations and cash reimbursements are curtailed to

a great extent. Even at the entry level, computer engineers from premium

institutes who had starting salaries of Rs 2.5-3.5 lakh have had to settle for

Rs 1.8 to Rs 2 lakh. There would be exceptions with certain companies offering

Rs 3 lakh or so, but the stark reality is that 30% of the same batch is not

placed at all.

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Despite these negative factors, IT remains one of the most lucrative

professions, with the average IT professional in the country (across years of

experiences and companies) earns Rs 7 lakh per annum.

Reality check



But before we conclude that salaries across the IT industry are this good,

here’s a missive. The figures quoted above are based on a Dataquest- IDC India

survey featuring 48 of the country’s top companies. It does not include data

from the SME (small and medium size enterprises) or ‘B’ and ‘C’ class

cities, which employ a huge chunk (in terms of volumes) of the country’s IT,

professionals. In order to capture this data and to ensure that we had an ear to

the ground, we computed the career paths of professionals from diverse

backgrounds. What emerged was that a lot of them began their careers at salaries

as low as Rs 36K to Rs 60K per annum, mostly in small companies. They have grown

through the ranks, honing their skills and often changing jobs to cross over to

the Rs 2.5-Rs 4.5 lakh bracket (see table). Not surprisingly, the significant

jump in salary happened during the pre-2000 IT boom period when companies

maintained a bench while bidding for projects. As projects got cancelled,

companies found themselves bleeding money. Now, post 2000, companies complete

the pre-screening, short-listing and even selection of candidates, but actually

take employees on board only after the project materializes.

SOME

SERIOUS BUCKS:
Never mind the

slowdown–salaries at IT companies still remain high, though

the really serious money comes after ten years in the

profession

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Clearly, professionals have lost much of the arrogance that often crept in

along with the tremendous bargaining power they wielded. Juggling offer letters

and using one to get what one wants against another, was a common phenomenon

during boom time. The practice is not as rampant today, simply because there are

fewer offers being passed around.

The hardware-software chasm



Average salaries depend not only on years of experience, but skills set

also. For instance, technologies like ERP (Oracle Applications 11i, PeopleSoft,

SAP) which are in demand today, command much higher salaries compared to

professionals with the same years of work experience in JAVA, Microsoft

Technologies etc. A professional with 5-10 years of experience in ERP related

technologies, would get a salary in the range of Rs 5-8 lakh. A professional

with the same level of experience is areas which are not considered so ‘hot’

today, would be in the Rs 3 lakh- 7-lakh range. The IT industry always has its

waves of ‘hot’ technologies, which are largely dependent on the availability

of projects in that particular area. While professionals who fall into the ‘hot

skills’ bracket at that particular instance will always command higher

salaries, the disparity between the salaries of hardware and software

professionals is sizable too. If a hardware professional with 5 years of

experience gets Rs 4.5 to 5 lakh per annum, a software professional in the same

bracket would get Rs 5 to 7.5 lakh. A marketing professional’s salary would be

on par with the software person or even higher in some cases. Marketing

professionals usually have a higher variable component, which is dependent on

the revenue they manage to rake in for the company. Similarly, the starting

salary for a hardware professional would be around Rs 1.2 lakh p. a (though

smaller companies and B and C cities could even have salaries as low as Rs

48,000 p. a.). By the same yardstick, software professionals would get around Rs

1.5 lakh p.a. and an MBA from a reputed institution about Rs 2.5 lakh.

Starting trouble



When it comes to comparing salaries on the basis of educational

qualifications, computer science/electronic engineers from the IITs come out

tops, commanding a starting salary of Rs 3 lakh or above. The next in demand are

computer science/electronic engineers from other reputed colleges. These would

command salaries in the range of Rs 2.75-3 lakh. Other computer science

graduates from institutes offering courses like MCA (Masters in Computer

Applications), BCS (Bachelor in Computer Science), and MCM (Masters in Computer

Science) would be in the range of Rs 2 lakh to 2.5 lakh. And the multitude of

arts, commerce and graduates who joined expensive IT courses with stars in their

eyes, would have to settle for anything in the Rs 60,000 to the Rs 1-lakh range.

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Perks



The perks still exist but companies are through with the pampering having

said good bye to the frills they offered employees in an attempt to have them

stay on. Perks often form 25% and in some cases upto 30% of salaries. Most

companies are veering around to the CTC (cost to company) concept and the perks

are being limited at junior and middle levels. In fact, for professionals in the

2-7 year bracket, PF and ESI would be the only two additional benefits offered.

Salaries

in IT: Some Typical Case Studies
Qualifications 1st

Job: Year, Designation and Salary (Rs)
2nd

Job: Year, Designation



and Salary (Rs)
3rd

Job: Year, Designation



 and Salary (Rs)
4th

Job: Year, Designation



and Salary (Rs)
5th

Job: Year, Designation



and Salary (Rs)
Dip

(Computer Technology)
1996:

Customer Support  Engg. 40,000

pa
1999: Sr

Customer Support 120,000 pa






BE

(Computers)
1996:

Sofware Developer 60,000 pa
1998:

Software Analyst 96,000 pa
2001:

Programmer Analyst 200,000 pa
2001:00:00

Associate 350,000 pa
2002:

High-end Associate 450,000 pa
BCS+MBA

(Marketing)
1989:

Center Coordinator 48,000 pa
1993: Area

Business Head 170,000 pa
1998:00:00

Manager (BD) 220,000 pa
2001:00:00

Manager (BD) 300,000 pa

BE

(Electronics)
1992:

R&D Engineer 36,000 pa
1995:

Software Engineer 60,000 pa
1996:

Product  Executive 96,000 pa
1999:

Project Leader 255,000 pa
2001:

Project Manager 600,000 pa
PGDBM 1999: Mrtkg

Coordinator 48,000 pa
2000:

Manager Operations 180,000 pa
2001:

Manager (BD) 400,000 pa


MCM

(Masters in  Computer Mgmt)
1995:

Project Leader 48,000 pa
1998:

Project Manager 120,000 pa
1999:00:00

Consultant 240,000 pa
2001:

Manager Technology 420,000 pa
B.A

(Econ)+MCSE
1991:

Systems Associate 25,000 pa
1993:00:00

Sr Associate 150,000 pa
2002:

E-learning expert 1,200,000




MCM

(Masters in Computer Mgmt)
1999:

Systems Analyst 48,000 pa
2002:

System Administrator 144,000 pa






For those in the 7 years of experience and above bracket, perks like company

owned homes, cars, mobile phone and telephone at residence, laptops, home office

furnishing reimbursement (hard furnishing), club membership, credit cards,

overseas vacations with family etc. There has certainly been a cut in the extent

to which these are offered–lesser domestic air travel, subsidized meals and

office transport is not completely free any more.

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Stepping around the slowdown



Apart from the distinct downsizing in perks, salary structures have

undergone a change too. The trend has been to go with more variable component,

for instance, 60 % fixed and 40 % depending on company performance.

Organizations have become wiser about the danger of inflating the base salaries

(includes Basic, HRA, etc) to unreal levels. A higher base makes it impossible

to reduce salaries, when the going gets tough, without attracting attention from

Labor and IT authorities. What is being done is the concept of EVA (Economic

Value Add) which is basically a variable pay coming out of a more liberal profit

sharing mechanism. Sometimes EVA or its equivalent may be upto three times the

basic salary and is linked to individual performance, team/project/product

performance, company performance.

Another concept is staggered performance bonus. After a year of good

performance, a sizable bonus is announced and is paid out in three to five

instalments over the years. The balance due for the particular year is called

the "Kitty" and this increases every subsequent year. In whatever form

a company pays this out, it is money, and a nice hot boodle at that! And despite

the fact that the pampered pashas have had to become pennywise, they still

remain some of the best paid professionals in the country.

TEAM DQ

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