The DQ-IDC India: SALARY SURVEY '05

• Average hike in IT salaries stays at 18%
• Freshers/non-engineers keep average salary steady at Rs 5.7 lakh
• Maharashtra beats Karnataka as #1 supplier of tech manpower

If last year's salary revival built hopes, IT salaries this
year did not let the tempo down either. At a decent 18.4%, the average hike in
salaries kept pace with last year's average hike of 17.1%.

However, significant hiring at the entry-level, together with
a growing trend towards induction of science graduates, like BSc graduates, at
lower salary levels, nullified the impact of average hike on the overall
industry average salary. This kept the average IT salary constant at last year's
Rs 5.7 lakh per annum.

For the senior guys in the industry this year's salary
trends failed to impress. Last year the revival had spurred a growth wave
leading to significant corrections in salaries, hence the quantum jump in
average salaries in the 2-5 years, 5-10 years and the over 10 years experience
bracket. This year the corrections in these bands were almost negligent, which
is reflected in the almost stagnant, even negative, growth performance.

In what seemed like a cyclical movement (that might have been
a conscious strategic decision by the companies), while the higher experience
bands (2-5 years, and especially the 5-10 and over 10 years) enjoyed the
benefits of correction in salary grades last year, it was the entry-level band
that saw salary hikes this year. There was also significant skewing towards the
Rs 2-3 lakh salary band as compared to the sub-2 lakh per annum band last year.
This trend, together with the salary corrections, accounted for the rise in the
entry-level average salary-an 8% growth as compared to a 12% drop in 2004.

But for the aggressive hiring of freshers, especially the
growing influx of BSc graduates at relatively lower salaries, the growth here
could have been much higher. Graduates accounted for 8% of the employee
population this year as compared to 4.8% last year.

The Supply: Maharashtra's on Top Respondents were asked: “What is your state of origin?” The four Southern states of Andhra Pradesh, Tamil Nadu, Kerala and Karnataka continued to rule the roost with maximum contribution to the manpower needs of the industry, even though the overall proportion of their contribution came down from 48.7% last year to 45.3% this year. Interestingly, Bangalore had to give up its numero uno position as Maharashtra took its place as the biggest originator for IT professionals. Maharashtra has made significant strides in the last two years taking its contribution from 5.9% in 2003 to 15.8% in 2005. India's Silicon Valley even failed to make it to the 2nd position as Andhra Pradesh upped its contribution to the industry. However, Tamil Nadu, which saw a significant drop last year over 2003, did little to recover. Another interesting trend has been a lowered gap between the top-most and the subsequent states. Thereby indicating a more evenly spread contribution from the various states.

The overall sedate trend in average salaries, consequently,
took its toll on salary satisfaction across all employee categories, leading to
a marginal decline over last year's satisfaction levels. The satisfaction
level among the entry-level employees stay put at last year's 6.7 score even
as their average salary made a comeback of sorts with a growth after last year's
drop.

The average hike in IT salaries this year was comparable to last year's, thereby maintaining the growth trend. Even though marginal, there has been an increase in the proportion of employees in ranges of higher percentage salary hikes. As compared to 23% of employees getting above 20% salary hikes, this time round there were 27% employees getting salary hikes on the higher end. This figure has been on a rise since 2003, when there was only 13% of the population in this category.Â

Surprisingly, salary featured below factors like growth
opportunity and career development, organization culture/work environment,
flexibility of office hours, technology one is working on- in accounting for
overall satisfaction. As a result, the country's star employers are busy
figuring out an optimal satisfaction combination on both the salary front and
the other emerging variables drawing the employees today.

Methodology

The DQ-IDC Best Employer Survey for 2005 was carried out in
seven major cities -Mumbai, Delhi, Chennai, Kolkata, Hyderabad, Pune and
Bangalore. Questionnaires were sent out to around 200 companies, out of which 46
participated in the first phase. In the second phase of the survey 32 companies
were shortlisted from among these. A large-scale survey was conducted by IDC
India among the 2,859 employees selected from the 32 shortlisted companies. The
sampling was done on the basis of the distribution of employees in different
cities. In each of the seven cities the sample quota was assigned based on the
company's employee strength in that city. A further classification of target
respondents was done on the basis of job profile and years of IT experience.
This quota system enabled us to get a proper representation of different types
of employees in the sample. The salary data and profiles of the IT industry have
been derived from these employee interviews.