Experts say starting pay has remained constant because supply of talent is more than demand.
Akshay Mehta (name changed) was thrilled to get a job offer from a leading IT firm in the country last week.
But the 22-year-old’s excitement was short-lived. He realised his package would be around Rs3 lakh per annum, fairly decent at a time when companies are being conservative, but just about the same as what his neighbour Arun Kumar got in 2008.
Mehta, an engineering student from an institute in Bangalore, thought that as companies are billowing about giving 9-14% hikes to their employees, there could be hikes in entry-level salaries too.
Reality hit him a little harder when he realised that his Rs3 lakh package is the cost to company — inclusive of contribution to provident fund, travel, food allowance, and a 15% variable component to be given based on his and the company’s performance.
So, effectively, his take-home salary would be Rs14,000-15,000 per month. “Anyway, it’s better to have a job, and get training and experience than cribbing about the salary,” says Mehta.
It’s true that for freshers, especially in the IT/ITeS space, pay packets in 2010 would be similar to 2008, says Rishi Das, co-founder and CEO of Bangalore-based talent acquisition firm CareerNet Consulting.
In 2007, on an average, fresh engineering graduates hired by IT firms would get Rs2.2-2.8 lakh or even Rs3 lakh per year in some cases, while science or commerce graduates would get about Rs1.5-2 lakh per year.
This increased in 2008 to Rs2.8-3.4 lakh for engineers and Rs1.8-2.4 lakh for science or commerce graduates, say recruitment experts. This year would more or less replicate 2008 salaries.
Experts say there is no major hike in starting salaries as companies have not yet felt the heat to get campus talent, although the IT/ITeS space is expected to add approximately 200,000 freshers in 12 months.
“Though the demand for freshers is catching up, hiring huge volumes by IT players would be a thing of the past as the numbers would get more realistic,” says Arun Rao, vice-president of global HR at software testing firm AppLabs. “The average entry level salaries should be Rs10,000-20,000 per month depending on the IT firm.”
Kris Lakshmikanth, co-founder and MD of the Bangalore-based staffing firm HeadHunters India, says that at present, the supply of talent is more than the demand; hence, companies don’t see a pressing need to hike entry-level salaries. “If a well-known firm makes an offer, freshers will take it up even if the salary is not very good.”
According to Gopalji Mehrotra, global head, talent management, Zensar Technologies, starting salaries this year could be about Rs3 lakh per annum.
TCS had said earlier that salaries of freshers joining this year would be similar to last year’s levels. But Infosys said fresher salaries would be increased from Rs3 lakh per year to Rs3.25 lakh. However, a human resource consultant from Mumbai says, “Rs3.25 lakh is the upper limit, which only the very bright would get.”
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