Indian IT Industry: The Price Advantage
A significant part of growth witnessed by Indian IT industry is driven by its ability to deliver technology solutions at a competitive price. An educated, english speaking workforce that can seamlessly integrate with the Services economy of the western world, provides the incentive for shift in economic activities to India.Educated and skilled workforce available at a fraction of costs in the West is at the core of this growth.
Is this advantage slowly diminishing? Factor the following:
- Entry level salaries for Engineers/ MBAs and other skilled individuals are experiencing a sharp increase.
- Annual increments at all levels (and more importantly at the junior levels) is experiencing a 30% jump per annum
Competetion amongst employers to recruit and retain the best talent is one of the reasons for the unprecedented rise in compensation. Overall improvement in the economy has fueled an easier availability of credit, new houses, automobiles; and with that an ambition level to posses these, much earlier in life than in case of earlier generation of Indians.
The above (more visible) signs of increase in employee cost along with a definite pressure on price realization in an increasingly competitive market is worrying the Indian IT fraternity. And the worries will be compunded if we look in to the minds of this new age' Knowledge Worker.'
Slowly but surely, the Indian knowledge workers (especially the ones working with Indian operations of Multinational companies and export oriented Indian companies) have started looking at the value that they deliver to their parent organization's bottomline. They have seen and experienced that in terms of competency and delivery, they are at the same level as (if not better than) their peers in the west. There is a painful realization at an individual level of the disparity in compensation between the Indian workers and their peers in the west. And very naturally, this is a ready fuel for an ambition in compensation growth.
While at an individual level, this though process may be seen as reflection of 'The new found self esteem'; is it going to weaken the very premise of 'Shift in economic activity' from the west?
posted by Unknown @ 4:57 PM
2 Comments:
I've seen information on 10-15% increases in salary but hadn't seen 30% before.
What will be the next low salary but high quality IT country after India?
Do you actively invest in India IT. if so, which companies?
do you know why CTSH has a pe ration so much greater than SAY?
thanks,
Lolic
The range is between 10% on the lower side to 40% on the higher side.
My argument of 30% is based on 'churn factor'. Large percentage of IT professionals find themselves in a position to get a 30% increase in compensation on job switch. In my experience, the salaries double in 3 years.
I run an IT company in India.
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