Salary Survey of IT Professionals in India,2004-5

Imagine you have a 20 man-month, 50$/hour project from a account that your sales folks have been chasing for months. The profit potential of the project is about 120%. Your project manager , who has been with you for long, goes onsite for the client meet, makes his presentation and helps crack the deal. The client is very pleased and about to sign the deal after an facility visit. Your project manager comes back and puts in his papers citing that he is not happy with his salary. No amount of convincing or hike in salary seems to work and you have to let him go. The client comes to the facility and asks for the project manager. Upon explaining, they politely nod their head, conduct business and tell that they will 'finalise' things shortly. They go back, dilly-dally over the issue and you have to re-negotiate all over again.
Meanwhile your HR person notices a flight of middle and senior employees from your company to the company the project manager had joined. You wish you had known earlier that they had received salary hikes one and a half times what you had paid them. Its not that you couldnt have paid them, it was just that you didnt know that the market had changed so much.To help companies avoid such situations....

Madrasmarkets.com has compiled its annual all-India salary survey report for the year 2004-05. The salary had 2000+ respondents from all over India. The 30 page report , filled with easily readable graphs and charts, finds that the situation has become highly competitive more than ever before to attract good manpower. It acknowledges that the market is now clearly demarcated into small, medium and large size pay masters. It traces how crucial skill sets are to pay. And it identifies 5 crucial factors which determine salary.

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These are 1) skill sets (functional) 2) location (city wise) 3) years of experience 4) sub skill sets (eg. DBA, system admin, programmer, analyst) 5) size of company ( in terms of size of manpower)

The survey clearly indicates that compensation is quite well differentiated based on these factors underscoring the importance of these factors. Some of the questions that maybe answered based on the survey are :

• What are the lowest, average and highest salary paid for each cateogry for different organisation sizes ?
• What is the average increment you need to give to your employees , as they pass into senior experience bands in order to be competitive ?
• Is your company a poor paymaster, good or excellent pay master within your relevant organisation size- band ?
• Which region or city can you find cheap manpower for which skill set ?
• How do different regions pay for different skill sets and years of experience ?
• What is the size of your competitive segment ?
• How much is the average salary paid by IT companies for a particular skill set ?
• Does average salary paid vary across the country ?
• How much will it cost if I have to hire a candidate from another location ?
• What will be the employee cost if I am going to enter a new line of business ?
• What is the variance in salary for different skill sets?
• Are years of experience more critical than skill set while deciding salary ?
• Is there my significant different skill set of candidate belong to particular years of experience, location ?
• What is a relationship between skill sets and location? Are particular skill sets found in particular locations ?
• What is experience across skill sets? What are the chances of finding a available skillsets ?
• What are the average salaries for different experience? How does this vary for different locations and skill sets and function , across functions?
• Will it be difficult to get employees from another location or retrain existing employees ?
• Where can you get experienced people for a particular skill set?
  
  Compensation has always been a crucial factor in the globalised new economy. The survey reveals very interesting facts not only about compensation but is also consistent about recruitment trends and business strategies.

  Who is in demand ?
  The manpower category most in demand today are the freshers ! Its not the middle or even senior management staff. The trend definitely seems to be to hire relatively cheap and good freshers. More freshers are being hired everyday than any other category of staff. Not only that. Their starting salary is higher than ever before obviously due to competition for these fresh heads.
  When we studied the composition of the labor work force we saw that a very significant size of a IT company could be made up of people with this
  category of people. Coming out of a recession, HR folks at some IT companies atleast have done a good job of mass -recruitment and mass-training to get cheap labour upto speed. Well done !

  The worst hit are the middle level managers. The mid-experience staff have not only diminished in quantity but their salary increases have gone down. The trend makes a lot of economic sense. And it accurately reflects the reality of software development and reflects the working business model.
  
  After all, what is needed to econmically develop software today as we have realised it ? - a bunch of smart , young, hard working freshers who can be trained or self-learn quickly and retained with a good working environment who can be given good leadership by a good project leader or manager. Besides what often comes offshore is coding work, not design or other high-end work.
  What has gone down compared to yesteryears is the number of project leaders or team leaders. And correct indeed. Probably CEO's have realised that the mid-level experience crowd is the one which is expensive, least value adding , most ambitious and the cat-on-the-wall crowd. While the project manager can handle the client, a bunch of good freshers can get the coding going.

  The highest jumps in salary are noticed in the 2-4 yrs exp category. This category has been typically working at the same organisation for 'a long
  time' now. Most likely they had initially signed up giving a 2 year commitment which has run out now. Now that they have gained good experience in coding and development they want to move out. But why do they want to move out ?
  The most common reason for moving out is salary. Our survey shows that the hike that this category gets is quite a significant number.

  These are some of the trends found in our survey. There are several more such as the sector specific issues, senior management issues and company
  specific issues. Rationalising of management salaries, performance-focus will be crucial issues. These trends have serious consequences for HR folks in the New economy directly and the old economy indirectly. We framed the critical success factors required by HR folks and IT companies to thrive in such an environment. And when we looked around at how prepared these companies were to meet the challenge we found a wide gap there. Thats where the challenge is going to lie in the new year. And the ball is certainly in the HR department's court.
  

The survey provides enough data to understand the strategies that organisations in different pay segments need to pursue in order to fufill their manpower expectations. Madrasmarkets provides unique customer support on the survey. All purchasers of the survey can get other custom questions answered within specifed support period. Please Register Here Kindly email lawrence@madrasmarkets.com to purchase the report or for other clarifications. Tel : 091-44-52113814 , 093828-98765.For in-depth discussion of issues send an email to hrdissues-subscribe@yahoogroups.com. Contact us for further consultation.