Salary Survey

This wasn’t a good year for IT pay packets. But all told, it wasn’t a bad
year either. Increments–that big annual hoopla of the industry–lost some of
their sheen despite which IT jobs remain among the best paying in the country.

Consider some numbers–by and large, entry-level salaries for people with
less than two years’ experience range from Rs 2 to 3 lakh, with some
development centers of international product companies even offering Rs 5 lakh
per year. Nearly half the workforce with 2-5 years of experience gets between Rs
4 and Rs 6 lakh annually. In fact, if you ignore the fringe numbers, most IT
employees with 2-5 years’ experience fall in the Rs 2-6 lakh income bracket.
Between 5-10 years, the pay packet largely ranges from Rs 6 to Rs 9 lakh. After
that, salary figures stop making sense, varying all the way from Rs 10 to Rs 90
lakh per annum for those with over 10 years of experience.

The bad news? The increment chart is suddenly looking a lot flatter and is
likely to remain that way through this year. Salary hikes had already been
affected drastically during the DQ salary survey of April last year–when they
went down from an average of 40% or so to 15% in most companies. This year, that
fall got broadbased. Over 50% of IT employees got increments of 15% or less,
compared to 39% last year. This percentage is among those who even got
increments in the first place.

In fact, a lot of companies, ranging from relatively small software exporters
to large MNC vendors, actually cut salaries from anywhere between 10 and 20%
across the board. It wasn’t just the high-paying startups that first cut down
salaries and then staff strength. The pre-merger HP brought some of the US
flavor to India, offering its employees the option of either going on leave for
a while or taking a 10% salary cut–that was around August last year. The
exercise was voluntary and the company says over 90% employees volunteered to
take the cut. Others like Infosys linked part of the increment to overall
company performance for a while.

Which was just as well...Year 2001-2002 will be remembered for a long time in
the history of the Indian IT industry as the ‘Year of Layoffs’. And the year
we discovered numerous euphemisms for that word–right-sizing, smart-sizing,
reorganization… There’s no concrete data available on the number of people
actually laid off, but numerous companies pared their staff strength from
anywhere between 2% and 5%. At the very least, most put a stop to hiring.

Company Rank by Perks & Benefits This measures employee perception of their company’s performance on various perks and benefits. Three companies that emerged as the dark horses of this HR survey, also it turns out, have the best perks–Adobe, SAP and Cadence. Adobe is among the few companies that provides hospitalization cover to a majority of its employees, while most Cadence employees said they were eligible for annual foreign trips. All employees of SAP and Infosys said the company provided them with home loans, while 88% of SAP employees also got an annual book allowance. Infosys comes a close fourth, which–given its sheer size–is quite commendable. i-Flex, interestingly, also turned in a good performance on perks. And despite being ranked as the third-best IT employer, Wipro is rated only 13th on perks and benefits by its employees.

Without exception, all companies focused on cost-cutting. This ranged all the
way from reduced travel and telephone expenses to a clampdown on office
stationary and, in one case, even tissues in the restrooms. Some perks,
specially those whose withdrawal could cause a fair among of angst–still
stayed untouched. About 62% of employees surveyed said they were still eligible
for lunch allowance, while 36% said they were still getting overtime benefits
(the last applying mostly to software professionals). Companies that could
afford benching put their employees on sundry training programs. So that was one
benefit–if one could call it that in the circumstances–that was not hit
quite as badly. Insurance and reimbursement of medical bills were suddenly perks
that were part of the salary package, so they remained untouched too. Not very
surprisingly, the smaller companies–Adobe, SAP and Cadence–did the best on
employee ratings on perks. Infosys did commendably at #4, considering its size.

i-Flex and Digital were the other two companies that didn’t rank too high
on the Best Employer rankings (see DQ Top 20, 2002 Volume 4), but did well on
perks.

What are the Perks? Not surprisingly, the most common and widespread perks across the industry are life and medical insurance and reimbursement of medical bills–now more or less part of the standard salary package. Interestingly, lunch is still hanging in there, with 62% saying they were eligible for a lunch allowance. Training is still big, though this figure is not indicative of the actual hours of training. Close to 45% employees said leave encashment was not permitted, though loans for a car or house were still available to over 40% of the employees. A good 36% said they were eligible for overtime benefits and about 10.7% said annual foreign trips were part of their benefits. For a few–mostly senior management–the more uncommon allowances, viz utilities, helper etc, seemed unchanged. For data on some of the other perks see graph. While the effects of the slowdown on salary increments were felt during the last survey itself, well over a year ago, things got a little worse this year. Nearly 55% of IT employees got an increment of 15% or less (compared to 39% last year). As a result, fewer got increments in the 16-30% band (down from 54.2% to 37.2%). However, the proportion of employees in the 31-40% increment range went up quite sharply–jumping from 1.8% to 5.2%. Essentially, there was a movement toward two increment ranges–less than 15% and 31-40%. Overall, average salary increments in the industry went down from 18% (with a standard deviation of 8, that’s a band of 10-26%) to 15% (standard deviation of 10, meaning a band of 5-25%).

Despite this, and perhaps in a perverse way because of it–salary no longer
remained the chief motivator for IT employees. It remained important–it always
will–but job content, security and company image took on greater value. In the
long run, the industry may look back at this as a blessing. While chasing the
money was certainly a valid reason for jumping jobs, it wasn’t always the
wisest one. Last year, more than any, showed us that.

Methodology

The DQ-IDC HR and Salary Survey, 2002 was carried out in seven cities across
the country–Mumbai, New Delhi, Chennai, Kolkata, Hyderabad, Bangalore and Pune.
The first part of the survey, The Best Employers’ Rankings–were carried in
the August 31st issue. (DQ Top 20 Volume 4). The survey was conducted in two
phases–in the first phase, questionnaires were sent out to 198 companies, of
which 48 companies participated. From these, 23 companies were shortlisted on
the basis of various parameters for the second round–the employee survey. The
salary survey uses data from both phases. For the salary figures, data has been
used from 33 companies that cover the entire spectrum–from software to
hardware and services across the country. Data on perks and demographics was
taken from responses from 774 IT employees surveyed in Round II. Salary figures
are "Cost to Company" figures, as given by HR heads of these IT
companies.

Sarita Rani in Bangalore