The Hindu Business Line : Freshers' salary stagnant; but training costs go up for cos

RISE in employee salaries, or wage inflation as the IT industry fondly calls it, is one factor that worries every Indian IT services company. But even though experienced hands in IT software services companies see annual salary jumps between 15 and 20 per cent, these firms, in general, have been doling out much the same to the mass of freshers that they recruit every year.

Yes, salaries for those just out of engineering colleges have remained the same for at least the last two years.

Mr Bhaskar Das, Vice-President, Human Resources, Cognizant Technology Solutions, says, "For us, entry level salaries for freshers from engineering campuses have been relatively flat for the last three years, and we have not seen a drop in salary."

Wipro Technologies, PolarisSoftware Labs and Satyam Computer Services report similar trends.

Mr Arvind Madhavan, Senior Executive, Strategic Marketing, Wipro, said, "Entry level salaries for fresh engineering graduates have remained fairly constant over the past couple of years."

Wipro saw a marginal increase to about Rs 2 lakh the last year from Rs 1.80 lakh for the previous two years for fresh engineering graduates.

Across these four companies, salaries for the said profile did not exceed Rs 3 lakh.

Interestingly, there is even a perception that entry level salaries are decreasing, leave alone rising.

Asked if this is accurate, Mr Das said, "This perception may be because of a significant number of BPO companies are also recruiting engineers. Since entry level salaries in BPOs tend to be lower, this may have impacted the average salary levels in engineering campuses." But what IT services firms are holding back on the salary front, they seem to be spending on training those freshers coming in every year.

Said Mr Das, "In absolute numbers, the cost of training has gone up but as a percentage of our overall training efforts, it has been relatively flat. On a per-person cost basis, there has been an increase not because of wage costs, but because the quality of training is enhanced every year. Further, we also certify our professionals on international certifications in technology, process, project management and domains of specialising, the costs of which are increasing."

He said, "With good buoyancy in business and the going recruiting numbers," Cognizant is building a separate training academy spread over 1,00,000 sq. ft., in Siruseri IT Park, near Chennai, that can house over 75 classrooms and accommodate over 1,500 people for training, simultaneously.

Since additional resources place added pressure on the training system, companies are trying innovative training methods.

Mr Hari. T, Senior Vice-President, Global HR, Satyam, said, "We have a series of pre-joining learning interventions through our learning centre wherein the students who are selected through campuses are given training even before joining us."

Cognizant has also begun using training methods such as e-learning and video-based learning.

Significantly, the stagnation seen in salaries for fresh engineers is not seen for MBAs, especially in the case of Wipro. For an average MBA (without work experience) joining Wipro, the starting salary has risen from Rs 4 lakh per annum in 2003 to Rs 5 lakh the last year. Satyam too pays the average fresher MBA between Rs 2.65 lakh and Rs 4 lakh per year.

For Cognizant, Mr Das said, "We predominantly recruit MBAs with about two to three years experience and from premier B-Schools. In these cases, the salary offered has been relatively flat over the last three years at Rs 7.5 lakh."

In sheer numbers, freshers are beginning to make their presence felt. Wipro's percentage of new recruits to total recruits has risen from 30 per cent in 2003 to 40 per cent.. For Satyam, the ratio has changed in favour of fresh recruits during the last three years and this trend is likely to continue, the spokesperson says.

Cognizant has seen the ratio between "fresh recruits and experienced hires" remain at 60:40 over the last few years and feels it is likely to change to 70:30 soon.

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