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IT Salary Trends: The Next Wave

IT salary structures in India are witnessing a shift with companies focused on a smarter, agile and diverse workforce, who are paid a premium for their niche in-demand skills

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The IT sector has traditionally been known to be among the highest paying, offering premium pay packages to the best talent; and going by the emerging salary trends, it is the most skilled in next gen technologies who will continue to be at the top of the game. Organisations are always on the lookout for an agile and smart workforce, and those having skills like AI, ML, predictive analytics, cybersecurity are coming to the forefront as the most sought after workforce segment. The salaries which had plateaued in recent years, apart from some instances at the entry level, are witnessing an increase in pay projections. Further, remuneration in the form of ESOPs and phantom stocks are here to stay for CIO/CTOs, who are believed to be the tech visionaries for a company and are important partners in its growth.

Emerging trends

Domains that have seen a lot of changes in IT salaries are e-commerce (mobile and web applications), pharma, healthcare, medical devices, automotive and financial services. This has largely been due to the advent of AI, analytics, deep learning and RPA. “Amongst all of these domains or industries, e-commerce has really impacted the way salaries are structured. UI and front-end developers, especially with a good understanding of high volume transactions based applications have seen significant increase in salary hikes,” says Thammaiah BN, Managing Director, Kelly Services India, adding that earlier compensation would be determined by the number of years of experience. But now, the dynamics of the market have changed such that candidates who understand niche technologies and are able to move faster between technologies have a greater advantage. Furthermore, now companies do not necessarily pay more just because a candidate is coming from a bigger brand or college. “Today, it’s highly probable that an IIT graduate might be earning lesser than a candidate from a lesser known college, but with a good domain knowledge in cybersecurity. It’s no longer a pedigree game,” asserts Thammaiah BN.

The workforce is also getting more diverse. In a team of 10, there could be a need to hire at least three women. This means that companies at times are also willing to pay a premium to get women onboard.

In an industry that is divided into two main segments – product based or serviced based IT companies – the latter are moving to captive models and deploying their employees at end-customer premises which typically is a product organisation. “This is one such interesting pattern which is apparent today. In addition, there has been a surge in demand for both contractual and permanent staffing; thus impacting salaries of the employees working in our Indian IT organisations,” affirms Manu Saigal, Business Head – IT Services, The Adecco Group India.

Another important factor is that with the kind of transformation the industry is going through, employers are now looking for an agile workforce that is more adaptable to new-age skills such as robotics, big data, analytics, automation. Manmeet Singh, President of Experis, ManpowerGroup India, shares that as a result, there is an obvious dip in the mid and senior level hiring as people management is no more a sought-after skill. “The average variable pay projection has improved from 15.8 per cent to 16.1 per cent. This clearly tells us that organisations are continuing to pay for performance and variable pay holds a higher percentage in the CTC,” he states.

The middle management layer in many organisations is being flattened. Kris Lakshmikanth, Founder Chairman & Managing Director, The Head Hunters India, mentions that previously, a project manager would be in charge of 20 to 25 people, but now – thanks to robotics, etc – many organisations are able to have one project manager for 100 people approx. For instance, recently, Cognizant Technology Solutions (CTS) let go of about 200 senior employees in an effort to realign its workforce.

Salary increase of IT professionals has been very lean (if at all) in the last three years. “The average increase would be between two to seven per cent. In contrast, in earlier years, the increases ranged from 10 to 25 per cent. Also, automatic promotions, etc, are no longer a norm,” says Lakshmikanth, adding that the average Indian software professional has earned less in 2017 compared to the previous year. This is because there is a variable portion of their salary which is directly proportional to their profit centre performance and overall company performance. Since most companies reported marginal growth in sales/profits, there were steep cuts in the bonuses. Sharing the same views, Sudhakar Reddy, Executive Director, Nirvedha, agrees that the greatest anomaly he can observe in the last five years is that salaries of IT professionals got stagnated and there is a lot of churn in the project management roles.

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