Category Archives: India

Salary increase for 2010 in India is the highest in Asia Pacific

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Silicon India reports that India has the highest increase in salary for 2010 in the Asia Pacific region. It was 6.6% in 2009 and now it increased to 10.6%. These kind of hikes are unheard of in the USA where 4-5% are considered good hikes and the normal range is 2-3%. And I don’t think many people got any hike at all in 2009 (except maybe those got a promotion). In fact many people might have got a salary reduction or maybe lost their job.

When reading the comments to the Silicon India article, it becomes clear that people are not satisfied with the 10% hike. I am getting the feeling that salaries in India will increase to a level where the competitive advantage in terms of cost will be lost and the outsourcing might move on to greener pastures.

Infosys directors get 81% hike

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As I wrote recently, Infosys is very concerned about the increasing salaries of its mid-level employees. But an article in IndiaTimes reports that:

The directors of the country’s second largest IT company, Infosys, saw an 81 per cent jump in their cash compensation in the fiscal year 2007-08.

According to the company’s annual report, the cash compensation to Infosys directors went up to Rs 10.45 crore during the year ended March 31, 2008 compared with Rs 5.76 crore a year ago.

At Infosys, the compensation includes basic salary, allowances and taxable value of perquisites.

The Bangalore-based IT major paid Rs 4.19 crore as commission to its non-executive directors, which was a 135 per cent increase over the previous year’s Rs 1.78 crore, according to the company’s 2007-08 annual report.

The increase in commission was high despite the rupee appreciation against the dollar. The non-executive/independent directors at Infosys include Deepak M Satwalekar, Prof Marti G Subramanyam, Sridar Iyengar, Claude Smadja, David L Boyles and Dr Omkar Goswami.

Anothing interesting fact is that even though the dollar has gained against the rupee, no company is adjusting the paycuts (or no hikes) for employees that they made recently citing the reason of rupee appreciation. Now they are focusing on the recession in US although it has been reported from multiple sources that the recession has not affected the IT industry.

Employee wage rise a business risk, says Wipro and Infosys

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From an Economic Times article,

Country’s two largest software exporters, Infosys Technologies and Wipro Technologies, anticipate wage pressures might not only slash their margins but also prevent them from maintaining their competitive advantage.

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“Wages in India are increasing at a faster rate than in the United States, which could result in increased costs for companies seeking to employ technology professionals in India, particularly project managers and other mid-level professionals,” Infosys said in its recent annual filing to American market regulator Securities and Exchange Commission (SEC).

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Wipro has also cited wage pressure as a business risk in its latest annual filing to the SEC.

You will find these statements ironic if you read another article that came in the Times of India:

IT giant Infosys’s human resources head T V Mohandas Pai takes home the highest salary and bonus among all the board of directors of the company, including chairperson Nandan M Nilekani and chief executive officer S Gopalakrishnan.

According to Infosys’s recent filing with the Securities and Exchange Commission (SEC), Pai receives a salary of $82,033 and a bonus of $3,08,625 in a year, the highest among the 15 members of the board, the firm’s The Board is chaired by the firm’s chief mentor N R Narayana Murthy while one of the co-founders and director Nandan M Nilekani is the co-chairperson.

While Nilekani receives $51,414 salary and $1,22,841 as bonus, Narayana Murthy does not take home any of them but $1,25,000 in annual compensation.

I think it is debatable whether it is actually the low and mid level employee salaries or the executive level salaries (and huge bonuses) that is the real “business risk”.

Indian IT firms to cut allowances of staff abroad

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I had heard about this news before but couldn’t find any sources online to confirm it. So here it is.

Faced with imminent recession in the United States, Indian IT services companies with major exposure to the North American markets are likely to cut the onsite allowances of employees deployed at clients’ offices abroad by 25 to 30 per cent from April 1, 2008.

Not surprisingly, the companies mentioned here are TCS, Infosys and Wipro.

Infosys pays a per diem of $45 (around Rs 1,780) currently to its onsite employees. Now, there is a proposal to reduce it to $35 per day (around Rs 1,380) — a Rs 400 cut per day — according to sources.

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Wipro, on the other hand, is hiring more local talent at client locations to reduce deployment of staff from India for onsite assignments.

Recently Wipro Chairman Azim Premji had said: “If we hire people locally, it will displace people we send from here on H1B visas. So net-net, it will not mean an extra cost to us.” If this happens, there will be fewer plum jobs for the boys in India.

TCS pays Euro 1,900 per month to each onsite employee in Europe. “We have been told that the per diem rate for the US is being revised. But the per diem for onsite employees in Europe will not change,” a TCS employee said on condition of anonymity.

Obviously, this is not good for the employee morale. But does anybody even care ?

Indians fastest growing of illegal immigrants, study finds

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Freep.com reports that Indians are the fastest growing illegal immigrants in the Unites States of America. The news, if true, is astounding. The website doesn’t site any sources or links to the actual study, but just says

The U.S. Department of Homeland Security estimates that there are 270,000 unauthorized Indian natives in the United States — a jump of 125% since 2000 and the largest percentage increase from any nation with more than 100,000 illegal immigrants in the United States.

Another national immigration expert, Jeffrey Passel of the Pew Hispanic Center, estimated that the number of illegal Indians is even higher, at 400,000 people.

Another interesting point in the article is

Indians are among the most affluent ethnic groups in the United States, with a median household income that is 62% higher than the figure for all U.S. households.

Read the complete article here. Have a look at the comments too.