The Hindu Business Line : ‘Moderation in wages expected from next year’

A reason to smile: (From right) Mr Kiran Karnik, President, Nasscom; Mr Ganesh Natarajan, Vice-Chairman; and Mr Lakshmi Narayanan, Chairman; at the Nasscom quality summit 2007 in Bangalore on Thursday. Nasscom expects wages in the IT and BPO sector to moderate beginning next year as manpower supply improves.

Our Bureau

Bangalore Sept. 6 The National Association of Software and Services Companies (Nasscom) expects wages in the IT and BPO sector to moderate beginning next year as manpower supply improves.

The Nasscom Chairman and Vice-Chairman of Cognizant Technology Solutions, Mr Lakshmi Narayanan, said in the last two to three years, wages in the IT and BPO industry had gone up on average by 12-15 per cent.

“As the supply improves, then the pricing will have to stabilise,” Mr Narayanan said on the sidelines of the Nasscom Quality Summit in Bangalore on Thursday.

He expects the beginning of the moderating trend next year, helped by the training initiatives of the industry body Nasscom, software companies and educational institutions to increase manpower supply.

The availability of capacity was increasing, Mr Narayanan said, adding: “In Tamil Nadu alone, there are 10,000 engineering seats going vacant this year. It’s a never-before situation. As talent and workforce development take roots, you will see moderation in wages.”

Sub-prime crisis

Replying to a query, Mr Narayanan said Cognizant did not see any impact of US sub-prime crisis. “Given all the parameters that we have, there is clearly no sign of any demand slowdown and recession in the US seems unlikely. At least, the customers that we have spoken to are not preparing for one. The plans they are making are on the basis that they will continue to grow and that they are part of a growth economy,” he said.

Speaking at the inaugural of the Quality Summit, Mr Kiran Karnik, Nasscom President, said that India had become a brand name for the quality globally and that people have developed trust in the quality of services offered by the Indian industry. However, the industry was concerned about the need for speedy infrastructure, quality manpower and innovation, he said.