Aggressive recruiting by multinational firms such as Oracle and IBM Global Services has lead to a surge in demand for skilled employees. Also, many large Indian firms are adding over a 1000 employees a quarter.
We hear that most companies are planning salary increases. This can be attributed to active poaching by US and Europe-based software companies, as they set up operations in India, says a recent report by global research firm Merrill Lynch.
Industry experts feel that the pay hikes could move into the double-digit range, especially in companies that have been experiencing a significant employee turnover.
Cognizant Technology Solutions, a Nasdaq-listed firm with offshore development centres in India, is planning salary increases in the range of 10-20 per cent during the current year, said Cognizant chairman and chief executive officer Kumar Mahadeva. The company has been recruiting over 100 employees a week.
Infosys Technologies Ltd, which is considered to be the bellwether for the countrys technology sector, has revised salaries twice this year due to an internal restructuring programme, where compensation will be based on performance.
Also, the firm is planning more than one wage revision in the coming year due to the changes within the company and also the strong demand for professionals from other firms, Infosys chief operating officer S Gopalakrishnan told eFE.
There is certainly a feel-good factor among the employees of software firms. We are getting many interview calls and are able to demand a good pay hike to jump companies, says Siva, who works for a leading Indian firm.
Not all firms, however, are hiking salaries. Tata Consultancy Services, the countrys largest software services firm, has reduced the pay component which is linked to performance. Analysts feel that the move is aimed at boosting profitability prior to the firms proposed public offering of shares.
Large-scale salary increases for software professionals came to a grinding halt after the dotcom bust in late 2000. During the dotcom boom, employees would often negotiate huge rises for their much-in-demand skills.
While it does seem that good times are back for software professionals, there is also a whiff of caution in the air as the external environment can suddenly change for the worse.