Smoke signals
Inflation is hovering below 5%, at this stage can we expect 15-20% rise in IT salaries every year? If so, for how long does this partying last? A case study involving myself and what prompted me to change country.
From the table, it is understood that I got exponential salary hikes. Realistically I would expect industry average hike, say 15% which would have taken my salary to 14 lakhs p.a in FY07, 16 lakhs p.a in FY08 and 18.5 lakhs p.a in FY09. Will this extrapolation holds?
Accepted IT salaries are at their best in India. But still we don't get equivalent salaries to our counterparts in USA. My only concern is our aspirations go up in a rising economy who expect similar hikes every year that may hurt one day. (Don't forget year 2001, when jobs were scarce and salary cuts/layoffs were order of the day).
Admit it or not, the reason why jobs are being outsourced to India is because of cost advantage. At the start of outsourcing, there is 1:10 advantage, that means with one person salary in USA, ten persons can be recruited in India with same skill sets. What a competitive proposition! At what stage USA companies feel the pinch? I don't have any exact value, but I put it at 1:3 ratio, where outsourcing means no advantage, because costs escalate rapidly as there is uneven growth in USA and India.
Surprisingly fresher salaries are south bound for last 2 years. There is significant decrease of 20% at entry levels, contrary movement in an inflationary economy. What does it say? As supply pressure increases inflation doesn't hold and salaries go down. (or stay standstill). I'm closer to 1:3 proposed ratio, my competitive edge is fast eroding. It's matter of time, supply increases with my skill set, and I won't be getting 15% predicted hike in future. So companies will try to recruit and train freshers and experienced guys should be under undue pressure.
What about Dollar fluctuations? If rupee appreciates in the years ahead, this further erodes our competitive edge. In few years down the line, say 3-5 years, we reach the breakeven (1:3) point. That is smoke signal to look west.
The table above holds for MNCs like TI, INTEL, NVIDIA etc.,
| Period | Salary | Percentage Hike | Remarks |
| Apr 2002 - Mar 2003 | 4.5 lakhs p.a | -- | 1st year, start of career |
| Apr 2003 - Mar 2004 | 5.2 lakhs p.a | 15.5% | 2nd year |
| Apr 2004 - Jan 2005 | 6.6 lakhs p.a | 26.9% | 3rd year |
| Feb 2005 - Jun 2005 | 12.13 lakhs p.a | 83.79% | 3rd year, changed company |
| Jul 2005 - Present | xxxxx $ | -- | 4th year, changed country |
From the table, it is understood that I got exponential salary hikes. Realistically I would expect industry average hike, say 15% which would have taken my salary to 14 lakhs p.a in FY07, 16 lakhs p.a in FY08 and 18.5 lakhs p.a in FY09. Will this extrapolation holds?
Accepted IT salaries are at their best in India. But still we don't get equivalent salaries to our counterparts in USA. My only concern is our aspirations go up in a rising economy who expect similar hikes every year that may hurt one day. (Don't forget year 2001, when jobs were scarce and salary cuts/layoffs were order of the day).
Admit it or not, the reason why jobs are being outsourced to India is because of cost advantage. At the start of outsourcing, there is 1:10 advantage, that means with one person salary in USA, ten persons can be recruited in India with same skill sets. What a competitive proposition! At what stage USA companies feel the pinch? I don't have any exact value, but I put it at 1:3 ratio, where outsourcing means no advantage, because costs escalate rapidly as there is uneven growth in USA and India.
Surprisingly fresher salaries are south bound for last 2 years. There is significant decrease of 20% at entry levels, contrary movement in an inflationary economy. What does it say? As supply pressure increases inflation doesn't hold and salaries go down. (or stay standstill). I'm closer to 1:3 proposed ratio, my competitive edge is fast eroding. It's matter of time, supply increases with my skill set, and I won't be getting 15% predicted hike in future. So companies will try to recruit and train freshers and experienced guys should be under undue pressure.
What about Dollar fluctuations? If rupee appreciates in the years ahead, this further erodes our competitive edge. In few years down the line, say 3-5 years, we reach the breakeven (1:3) point. That is smoke signal to look west.
The table above holds for MNCs like TI, INTEL, NVIDIA etc.,
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