Indian software salaries rise 19 percent: Dataquest-IDC

New Delhi

September 12th, 2007

A typical Indian software professional got an average salary increase of 18.7
percent in 2007, an improvement over the 18.3 percent increase recorded in the
previous year. This is revealed by a nation-wide survey carried out by IDC India
for CyberMedia group's flagship publication Dataquest, covering 2,806 IT
professionals.

The results, to be published in the forthcoming issue of the Dataquest
magazine, reveal that foreign multi-national corporations (MNCs) pay higher
salaries. Among MNCs, those engaged in R&D pay the highest.

Not surprisingly, the top three paymasters in the industry- Cadence, Sun
Microsystems, Honeywell Technologies--were all engaged in R&D. Seven out of
the top 10 in the list included MNCs like IBM, Capgemini and CSC.

The industry average salary grew by 11 percent in 2007 to touch Rs 6.2 lakh
per annum. This growth is encouraging compared to a drop of three percent in the
industry average salary in 2006. This average salary increase is significant
considering that the software talent pool of the top 50 companies has grown
sharply - at nearly 30-40 percent annually, in the last three years. It is
generally expected that with the on-campus recruitment of freshers, the average
salaries should go down.

Though Dataquest's base of 31 companies surveyed comprised IT services
players, R&D centres of software vendors, MNCs, hardware players, systems
integrators and resellers, no big disparities in salary levels were noticed.
While Cadence and Sun are the top paymasters for all employees with upto 10
years of experience, industry bellwether Infosys is more generous with the
salaries of its senior and experienced employees. Infosys is one of the best
paymasters for professionals between 10-15 years and more than 15 years of
experience.

Going by the salary levels, the study says that for fresh engineers it makes
sense to embark on a career in a software R&D firms. For the more
experienced professionals, it adds that, the salary levels at Infosys match with
the best.

The survey points out that there is virtually no correlation between 'salary
levels' and 'satisfaction with salary'. While TCS employees rank their company
at No. 4 in terms of 'satisfaction with salary' it is ranked at No. 13 in terms
of salary. Infosys is ranked at No 12 in terms of salary but is ranked No. 28 in
terms of 'satisfaction with salary'.

Commenting on the survey results, Dataquest Chief Editor Prasanto Kumar Roy
said, "We knew that high salary didn't always mean high satisfaction, but
the sheer extent of disconnect is amazing. There was less than eight percent
correlation between salary and satisfaction with salary."

He further adds, "What it means is that companies who have their act
together on employee satisfaction can manage a lower wage bill-and still have
satisfied employees. For instance, HCL Infosystems was way down at #23 in salary
rank, but it topped the charts on employee satisfaction with salary."

The report points out that the Indian tech companies must find a way out of
this ever increasing wage rise as rupee appreciation squeezes their margins even
further. The not-so-simple answer is, of course, to improve employee
satisfaction.

Some companies are also trying out a six-day week, selectively, to offset the
impact of rupee appreciation on their margins by increasing billable hours. Many
more companies, including some of the MNC captives, may also do away with a
five-day week that is a strong part of their culture, to bring in
competitiveness on the HR front.

Young workforce

Professionals with less than five years work experience form 70 percent of
the 1.6 million strong Indian software work force. Just one out of five
professionals has between five to 10 years of experience and less than one in 10
professionals, has over 10 years of experience.

Forty percent of the professionals polled for this survey had obtained their
qualifying degree from the South Indian states of Tamil Nadu, Andhra Pradesh,
Karnataka, Kerala and Pondicherry. Those with qualifications from western Indian
states of Maharashtra, Gujarat and Goa made up about 20 percent of the
professionals.

Educational institutes from India's capital, New Delhi contribute 6.5 percent
of the professionals. Engineering graduates, post graduates and masters in
computer applications constitute about 70 percent, and MBAs make up for about
six percent. Post graduates and graduates in humanities, commerce and sciences
and those with diploma and certificate programs in computers make for the
remaining 24 percent.

Even though the average age of the professionals has increased marginally to
28.1 years (from 27.5 years), lack of experience poses challenges at the middle
management level, the study adds.

The average age has been derived based on data from over a dozen companies
that participated in the magazine's Best Employer Survey for three consecutive
years. These include TCS, Infosys, Wipro, Tech Mahindra, Patni, CSC, Aricent,
Hexaware, Zensar, HCL Infosystems, GlobalLogic, RMSI and Cadence.