The entry-level salary that attracted many freshers to the Indian information technology sector has been stagnant for the last three years despite the industry scaling up the value chain in the global market. While fresh hiring in IT is likely to go up 12% year-on-year this fiscal, fresher salaries have remained constant, thanks to a demand-supply imbalance, increasing training costs and pressures to keep the Indian cost advantage going.
Som Mittal, president of IT trade body Nasscom says, ?Entry-level salaries have remained the same for the past two to three years. On an average, freshers? salaries have stayed at the level of R3 lakh to R3.3 lakh, and most companies have not revised it.?
Infosys, which plans to make 26,000 campus offers in FY 12, has not made any changes in entry-level salaries in the past two years. It has maintained its policy of offering R2.75 lakh to freshers, which is normally hiked to R3.2 lakh upon confirmation. TCS, the country?s largest IT recruiter, has also not increased base-level salaries, say staffing firms. Of its guided 60,000 intake this fiscal, TCS planned to make 37,000 campus offers.
While hiring in large numbers, companies pick up a major portion of graduates from tier-II and tier-III colleges. These recruits are often said to be unemployable and not job-ready and large sums of money are spent on their training. This is one of the key factors keeping entry-level salaries down.
?Freshers? salaries have not gone up because they are already expensive. In addition to their salaries, we spend an average of R2 lakh per year, per head on training. Freshers normally take six months for the initial training, and then take a year?s time to learn on the job, which is a lot of expense in terms of man hours,? says
Nandita Gurjar, senior vice-president and global head, HR, Infosys. ?Besides, there is a very large supply of freshers in the market for IT today,? she adds.
Bulk hiring in itself is an expensive procedure, and recruiters feel that for IT services companies, whose business model has revolved around low cost, volume-driven man power at the entry level, higher fresher salaries will be damaging on margins. ?Companies are absorbing large numbers of graduates in B Sc computer science, BCA, MCA and MBA.
But such bulk recruitment is expensive. Companies are trying to keep overall costs under control by maintaining steady salary levels, without which, they will lose the edge,? says Aditya Narayana Mishra, president (staffing), Ma Foi Randstad. However, staffing companies say that Wipro?which plans to change its 60:40 ratio of freshers and laterals to 70:30 has made some changes in freshers’ salaries, alongside Cognizant and HCL. ?We have seen companies offering 10 to 12% higher salaries compared to previous years, with average salaries in the R22,000 to R 25,000 per month range. Although this is a positive trend, the hikes are nominal, and freshers salaries are not expected to increase drastically in the next two years,? says Sangeeta Lala, vice president, sourcing, of staffing company TeamLease.