The size of the IT companies in India has grown multifold in terms of revenues and profits, over the last decade. But, the size of cheques signed for its entry-level hires has more or less remained the same.
Back in 2012, Shruti, an engineering graduate was offered a package of ₹2.4 lakh p.a by a leading IT firm. Almost a decade later, Arpita got an offer of ₹3.36 lakh p.a from the same firm. This is a mere 40 per cent increase in the last 10 years.
The Ex-director of Infosys, Mohandas Pai recently rekindled the age old issue of stagnated pay packages for freshers in the Indian IT industry. Pai said, “The IT industry has been exploiting freshers for the last ten years. There has been no increase in compensation, freshers are being paid the same ₹3.5 - 3.8 lakh, which the companies were paying in 2008-09.”
According to reports, the median salary package of freshers grew just 45 percent from ₹2.45 lakh to ₹3.55 lakh in the last decade.
Prasadh M S, Head of Workforce Research, Xpheno told BusinessLine, “Despite the fact that fresher additions are key to the growth and profitability of the IT Sector, the average annual salaries remained in the sub $5000 level for over a decade till early 2020.” It was during this same period that the sector’s billing rates and overall revenues multiplied manifold as the scale of talent and tech competencies available drove more global business to India, he added.
Pai had said, “They have 13-14 per cent increase in revenue due to rupee depreciation. IT companies are making good money and they are paying senior people very high salaries. Why not pay the junior people too?”
Vijay Sivaram, CEO, Quess IT Staffing, told BusinessLine, “The salaries for freshers have been low because the companies initially spend on their training to make them employable. This is also because there is abundance of supply of talent, but is not ready.” However, while salaries might not be hiked post training, freshers are pacified with non-monetary benefits, he added.
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Although, human resource consultants say companies have a reasonable rationale behind their low salary figures, this isn’t economically viable for freshers. Arpita, the fresher mentioned above said, “I got the job during the pandemic, so the pay was enough since I was at home. Now that I have to move to Bangalore, I am sceptical the pay won’t be enough to sustain my expenses.”
However, nothing might change even in the future. “The slow growth trajectory of fresher packages are here to stay till the narrative of employability of this cadre gets challenged and revised. Till such revision, enterprises are fine to play from a vantage point of investments they make on making this talent job ready,” Prasadh said.