New Delhi: MNCs are readily adopting measures to prevent their employees from jumping the ship and data compiled by global human resources consultancy firm, ECA International, shows that Indians are going to get the highest salary hikes in 2008.
However, the data somehow does not seem to include the IT sector, in which fat pay packets could soon be a thing of the past.
Sources say that IT majors — Wipro, TCS and Infosys — are planning to reduce the salary hikes this fiscal year (starting April 2008) to almost half of what was given in 2007. The hike will be a mere 7 to 8 per cent on an average as opposed to the 15 per cent that was given last year.
Soaring profits and talent-retention are obviously not a consideration for these software firms this year, who are also planning to cut down the hiring by almost 20 per cent this year. The idea is to more efficiently utilise the staff that already exists.
Industry insiders say that reason behind this slashing of salary hike percentages this fiscal could be due to a likely recession in US. Also the rising rupee against the dollar has made a lot of difference.
Contradictory Trends
Contrary to what industry insiders say, leading IT research and advisory company — Gartner Inc — has stated that the Indian IT services market is pegged to grow to $10.73 billion by 2011 at a five year compounded annual growth rate (CAGR) of 23.2 per cent.
Gartner said that the growth in the IT industry would be driven by agility, cost takeout and innovation.
Growth of the IT services market is primarily being driven by economic growth, high growth in small and midsize businesses, Government projects and increased customer focus.
"Many IT organisations are planning to spin off their IT organisations into an independent entity to capture the growing opportuniites", Gartner's Senior Research Analyst, Arup Roy was quoted by news agencies as saying.
The market segments that are expected to witness strongest growth are consulting, IT management and business process management (BPM) services with five year CAGRs of 28.1, 23.8 and 27.1 per cent respectively.
Meanwhile, ECA International has said that Indian employees are expected to get the biggest paycheck increase globally this year, primarily driven by inflationary situations associated with the robust economic growth in the country.
"Salary increase in India is expected to be the biggest this year as companies have to keep in mind the inflation for their employees to maintain a good economic stature," ECA International General Manager Lee Quane was quoted by agencies as saying.
(With inputs from agencies)
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