With the slowdown in the US chewing away at the profits of Indian IT companies having a large exposure to the banking, financial services and insurance sectors in the fourth quarter, it?s the entry-level employees in top-rung Indian IT firms who will face the heat most.
Since most of the Indian IT giants have reduced their average salary hikes from 13-15% last year to 8-10% this year, such employees with two-three years of experience are not left with many options. A Satyam Computer Systems employee, who does not wish to be named, says, ?Initially, entry-level employees would move out for high pay packages. But now, since the entire industry is looking at reduced salary hikes, they are stuck. Moreover, IT companies hire employees with bonds to hold them back for a period, sometimes for even 18 months.? Project managers play a key role in bringing down employees? expected salary hikes for the coming year as they have to fit everyone within the allotted budget. When human resource is critical to a project and to the client, too, only then can the employee negotiate hard with a company, the source added.
Rajiv Mehta, a research analyst with India Infoline, says, ?When these companies were giving a hike of 15%, the increased pricing was passed on to clients. But now, their margins have come down and they have been preparing their employees for the last six to eight months for a reduced hike in the salary for the coming year.?