Dhannanjay Kumar, a 25-year-old computer science graduate from a top engineering college in Bangalore, considers himself lucky to have found job in a year when India’s over $50-billion software outsourcing industry had to cope with falling demand and trim payroll by up to 10%.
“Not only I had to work twice as much for getting an interview, the annual salary of around Rs 1.7 lakh is much lower compared to my seniors who got Rs 3.5 lakh two years ago,” said Kumar who got hired by a Bangalore-based mid-tier software company last month.
Every year, around 3,00,000 computer science and engineering graduates seek employment with hundreds of tech firms, including big names such as TCS, Infosys and Wipro. This year, more than half of them were left unemployed because tech firms were already finding it tough to manage resources sitting on the bench.
A worsening economic crisis, increased availability of skilled workers and lower demand for software services have brought down the entry-level salaries for IT professionals in the country by up to 20%, according to experts tracking the sector.
“The entry-level salaries are down by at least 10-16%,” said GC Jayaprakash, principal consultant of Stanton Chase International.
Until two years ago, almost all computer and engineering graduates were absorbed by India’s outsourcing industry, comprising top tech firms such as TCS, Infosys, Wipro and many others. However, as customers delayed and shelved outsourcing projects, these tech firms also postponed campus hirings.
“Last year, a number of companies gave away offer letters but did not recruit. On top of that, there is a new pool of qualified professionals being churned out this year -- all this has created an oversupply in the entry-level IT job market where salaries typically sway between Rs 3 lakh per annum and Rs 5 lakh on the higher side,” Mr Jayaprakash added.
Many students had to approach potential employers directly, since companies did not visit their campuses for placements.
“We formed groups and toured companies, and agreed to settle at lower salaries because it’s better to be employed at lower salary than having no job at all,” said Srilekha Varma, who recently accepted a job offer from a Chennai-based IT firm specialising in banking software.
Recruitment firms such as GlobalHunt said the entry-level salaries may have dipped by up to 30% because of increased availability of skilled professionals.
“Earlier, companies were building bench strength and doing skill development, as they were expecting large business and didn’t want to run out of manpower. Fresh graduates used to have multiple offers and they were in a position to negotiate,” said Sunil Goel, director of GlobulHunt’s Indian operations.
In a normal year, computer science graduates were offered entry-level salaries of Rs 3.5-5 lakh. However, companies are now hiring freshers at Rs 1.7 to Rs 3.5 lakh.
Meanwhile, HR heads at tech firms, including Wipro, India’s third-largest software exporter, say professionals have become more realistic about what they want from their employers.
“I don’t think salaries have come down, but the environment has indeed helped us in containing salary hikes,” Pratik Kumar, head of human resources at Wipro said.
What has also changed this year is the manner in which salary offers are being structured.
“Due to an oversupply of qualified talent there is rationalisation at entry-level salary, which is based more on performance and are variable by nature. Cost-to-company is not necessarily a comparison of the past-drawn salary,” said Ashok Reddy, managing director and co-founder of staffing company TeamLease.
Indeed, professionals who lost their jobs during the past few months, are now being offered entry-level salaries by companies who can get experienced talent at lower salary levels.
“I was working as a software testing engineer and lost my job in February. Now I have a job, but the salary is similar to what is being offered to new recruits,” said Neelesh, who has around six-month experience.
“Companies are now preferring to hire professionals who missed jobs due to slowdown, were on the bench or were laid off, because they have some kind of training and are experience compared to freshers,” said Mr Goel.
TCS said it would do new campus hiring in January 2010 and will honour all 24,000 offers made for FY09. “Around 1,800 graduates have joined us in Q2 and another 8,000 will join in Q3, rest of the graduates will join based on the demand,” a TCS spokeswoman said.
Infosys said for FY10, it has made 20,000 campus offers and expects an 80% conversion rate i.e. 16,000 of these offers to join the company. “We are honouring all our hiring commitments,” an Infosys spokeswoman said.
“Not only I had to work twice as much for getting an interview, the annual salary of around Rs 1.7 lakh is much lower compared to my seniors who got Rs 3.5 lakh two years ago,” said Kumar who got hired by a Bangalore-based mid-tier software company last month.
Every year, around 3,00,000 computer science and engineering graduates seek employment with hundreds of tech firms, including big names such as TCS, Infosys and Wipro. This year, more than half of them were left unemployed because tech firms were already finding it tough to manage resources sitting on the bench.
A worsening economic crisis, increased availability of skilled workers and lower demand for software services have brought down the entry-level salaries for IT professionals in the country by up to 20%, according to experts tracking the sector.
“The entry-level salaries are down by at least 10-16%,” said GC Jayaprakash, principal consultant of Stanton Chase International.
Until two years ago, almost all computer and engineering graduates were absorbed by India’s outsourcing industry, comprising top tech firms such as TCS, Infosys, Wipro and many others. However, as customers delayed and shelved outsourcing projects, these tech firms also postponed campus hirings.
“Last year, a number of companies gave away offer letters but did not recruit. On top of that, there is a new pool of qualified professionals being churned out this year -- all this has created an oversupply in the entry-level IT job market where salaries typically sway between Rs 3 lakh per annum and Rs 5 lakh on the higher side,” Mr Jayaprakash added.
Many students had to approach potential employers directly, since companies did not visit their campuses for placements.
“We formed groups and toured companies, and agreed to settle at lower salaries because it’s better to be employed at lower salary than having no job at all,” said Srilekha Varma, who recently accepted a job offer from a Chennai-based IT firm specialising in banking software.
Recruitment firms such as GlobalHunt said the entry-level salaries may have dipped by up to 30% because of increased availability of skilled professionals.
“Earlier, companies were building bench strength and doing skill development, as they were expecting large business and didn’t want to run out of manpower. Fresh graduates used to have multiple offers and they were in a position to negotiate,” said Sunil Goel, director of GlobulHunt’s Indian operations.
In a normal year, computer science graduates were offered entry-level salaries of Rs 3.5-5 lakh. However, companies are now hiring freshers at Rs 1.7 to Rs 3.5 lakh.
Meanwhile, HR heads at tech firms, including Wipro, India’s third-largest software exporter, say professionals have become more realistic about what they want from their employers.
“I don’t think salaries have come down, but the environment has indeed helped us in containing salary hikes,” Pratik Kumar, head of human resources at Wipro said.
What has also changed this year is the manner in which salary offers are being structured.
“Due to an oversupply of qualified talent there is rationalisation at entry-level salary, which is based more on performance and are variable by nature. Cost-to-company is not necessarily a comparison of the past-drawn salary,” said Ashok Reddy, managing director and co-founder of staffing company TeamLease.
Indeed, professionals who lost their jobs during the past few months, are now being offered entry-level salaries by companies who can get experienced talent at lower salary levels.
“I was working as a software testing engineer and lost my job in February. Now I have a job, but the salary is similar to what is being offered to new recruits,” said Neelesh, who has around six-month experience.
“Companies are now preferring to hire professionals who missed jobs due to slowdown, were on the bench or were laid off, because they have some kind of training and are experience compared to freshers,” said Mr Goel.
TCS said it would do new campus hiring in January 2010 and will honour all 24,000 offers made for FY09. “Around 1,800 graduates have joined us in Q2 and another 8,000 will join in Q3, rest of the graduates will join based on the demand,” a TCS spokeswoman said.
Infosys said for FY10, it has made 20,000 campus offers and expects an 80% conversion rate i.e. 16,000 of these offers to join the company. “We are honouring all our hiring commitments,” an Infosys spokeswoman said.
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