After a period of dullness in the outsourcing industry due to the downturn in the global economy stemming from the subcrime crisis in the U.S., IT employees have much to cheer about.
Industry giants like India‘s HCL, Infosys Technologies, and Tata Consultancy Services, and HCL are offering increments for the fiscal year 2010-2011, say reports. The increments will come in the way of 8 to 12 percent increases with a 13-15 percent range being the norm pre-recession, i.e 2007-2008.
During the global slowdown in the 2009-2010 period, Infosys and HCL Technologies were the only two firms offering token and selective salary spikes. With the U.S. taking a hit from the credit crisis emanating from the problems in the housing market, the primary export market was cutting back on services and renewing contracts seeking lower prices. Meanwhile, TCS reportedly increased the variable component of the salary during this downturn.
According to the HR department, TCS is now ready to hike wages in the rage of 8 and 15 percent. India’s leading IT services company has not announced the salary hikes yet. “TCS has also increased its MBA campus-level salaries by 10 per cent,” an HR consultant was reported as saying byinfotech.indiatimes.com.
Meanwhile, India’s No. 2 outsourcing giant Infosys has plans to increase salaries from 8 – 12 percent from the first of April for onshore and offshore staff.
Chief of HR and administration TV Mohandas Pai, who is also a member of Infosys’ board, said Infosys will pay salary increments since it’s outlook on 2010-11 is optimistic. It is expected to be a normal year for Infosys and “things are looking up,” explained Pai. Nonetheless, a decision about the levels of increments has yet to be decided at Infosys.
According to an earlier survey done during the economic slowdown, a slight increase in salary and a drop in the attrition rate was observed. For instance, the average attrition rate for the IT sector gauged at 18 percent in 2008. And that figure has dropped to 15 percent. The average attrition rate is calculated as the percent number of staff retained from the total number of employees. Since March 31, 2008, the attrition rate in IT gained from 79 percent to 85 percent.
The survey was done by market intelligence consultant, IDC, and Dataquest. A marginal increase in salary was reported during this phase. Moreover, there was a freeze in hiring, and a slash in hiring new talent.
According to the results of the IDC survey, there was a tangible improvement in the work environment, though salary increases were a mere 1.4 percent. For employees with experience of less than two years, a two percent increment was found to be the norm in the IT industry. Staffers with experience in the range of 5-10 years received a five percent increase, while those with experience over ten years received a 4 percent salary hike.
The survey also found that job security was a crucial element along with work-life balance. The study revealed that an increasing number of employees in IT felt that they were not secure in their job roles in their companies. The massive layoffs during the economic downturn that roiled financial markets on Wall Street also had an impact on the mindset of IT employees.
Furthermore, employees felt that training helped with their performance. In terms of salary and compensation, the IDC survey showed that more staffers felt they were getting paid according to industry standards in comparison with year before.
Jacob Cherian writes for SourcingLine, a leading provider of directories on top seo companies and mobile application developers.