A fresher, who was originally expected to join a large IT company in Aug-Sep 2008, but has been told to join only now, said, I was offered around Rs 3 lakh per annum but the company is now offering Rs 2.50 lakh as the variable pay has now been cut. Almost 105 students have joined now and its a similar situation for most of us. We have no options but to accept this because of the downturn in the industry.
A variable pay is largely dependent on the employees as well as the companys performance. A cut in variable pay is one of the cost reduction exercises followed by companies, and can help them prune personnel costs by as much as 15%, say experts.
At the same time, employees need to stick to these companies as they have been asked to sign a bond of two years. If the situation changes and we want to switch to another firm, we will have to pay as much as Rs 1 lakh to the company, the fresher added. Another employee joining a Bangalore-based IT firm had a similar tale to tell.
However, IT companies like Infosys, Wipro and Mphasis said they would be meeting the salary commitments as offered at the time of hiring. A TCS spokesperson denied any delay from their part on joining of its employees. Infosys had said that they delayed the joining of 2,800 employees in the year 2008 and these will be joining them by March 2009.
On the other hand, Pradeep Bahirwani, VP-talent acquisition, Wipro Technologies, said, By the end of third quarter of 2009, 6,300 campus recruits have joined us. We had made a total of 13,600 offers in 2007-08. Elango R, chief human resources officer, MphasiS, an EDS Company, says, A total of 1,832 people were offered placements through campuses in 2007. Of these, around 1,000 have joined MphasiS in 2008.
Rohit Ramani, director, Emmay HR, says, The variable pay cuts for the freshers is probably just another way for the companies to reduce costs. The variable component would cut personnel expenses by at least 15-20%. Industry experts say that most of the companies are expected to look at this as a cost cutting option.
Visibility as of now is still less in terms of the number of people joining, but we expect that by April-May, there would be a clarity and most of them will start joining then, Ramani adds.