[Arun Varma]

Originally Posted by Vishal.R

Initially Indian IT companies had free run in accessing talent pool but now (i.e in last 15-20 years) many of their clients themselves have started their offshore development centers, and they are able to pay higher as they don't need to pay any middlemen.

The logic still applies. Any non Indian company that does business in India which caters to non Indian demographic (whether captive or third party) does so because of (mostly) cost advantages. Salaries (and benefits) are anywhere from 30 - 60% if not more, and it requires careful attention. New industries being set up (including startups) may create their own benchmarks higher than the other established industries, initially. But they too, will have to play prudently else, they will not be sustainable in the mid to long term.

Again, stressing that good governance is indispensable but the financial compulsions and constraints remain immutable!

Originally Posted by Kochikaran

Salaries make up less than 1% of the revenues of these companies. I am sure shareholders won’t bat an eye.

More important, is what % are they to the overall cost. Salaries and benefits are anywhere from 30% - 70% of the companies overall cost. This, what is called the labor margin, is an important measure for determining how effectively companies, any company for matter, manages their staff to generate revenues. This keeps going higher, which it will when salaries go up, the labor margin reduces and in turn impacts the gross profit and thereby the profits. Of course there are other important components like indirect costs, debt and SG&A but this is the most volatile component!

Attaching an old report that shows the cost breakdown for IT companies. You can see how big the salary component is (49-77%). I am sure there is an updated report available but the overall logic will remain.

https://www.ima-india.com/images/Res...9July2010A.pdf

[splitinfinitive]

Originally Posted by Kochikaran

Salaries make up less than 1% of the revenues of these companies. I am sure shareholders won’t bat an eye.

I'm really sorry, but you're incorrect by a factor of ~70x here. Typically, wages and benefits constitute 70% of the costs of large players (think Wipro, TCS, etc.).

Source: Bloomberg

[HammerHead]

I think the question here is "Which other sector where there is high demand and high supply of talent, pays more than what being paid for a fresher in IT sector?"

Also on the notice period, its a domino effect. Even my organization moved to 2 months notice period from 1 month. The way organizations think is why to let go an employee within a month while the one we will pick from the market as replacement will anyways take 2 months to join.

[skrao]

This is my 33rd year in the IT industry. I have seen it kind of go in many circles. Here is my two bits about it.
This was.a long time coming. While all the IT majors built amazing businesses and processes to conquer the world, somewhere the push to please the customer no matter what and the reduction of people to billable machines which had to be maximised created an uncaring attitude.
Cartelisation and narrowing to specific skills as opposed to encouraging independent thinking and creativity has led to a lot of heartburn.
No Indian major has a real world product worth its name, Masterkey (TCS), Finacle ( Infosys) are minor blips in the global landscape.
Global opportunities, connectivity and recognition of Indian talent by venture funds has aggravated this further. This pain will hit in a couple of years when the top talent from these companies join the exit queues.

[lsjey]

The root cause of this situation, where big IT companies pay a small amount as pay and set stringent exit clauses IMO, are:

1. Many of the recruits are first generation engineers. They don't have the necessary knowledge of the industry, work conditions etc. This means they accept the offer from these IT services companies and rest easy. They don't attend interviews in better paying companies. Basically, they lack ambition due to lack of worldly knowledge.

2. Due to lack of ambition, these graduates don't demand better pay. Let me illustrate this. A chipmaker, who has a development centre in Chennai, offered a job to a few freshers whom I know of during an off-campus drive. They were all offered the same salary and told that this is the fixed salary that all freshers get by the HR. They all accepted the offer, thinking that it was a fair deal. I counselled one of them to ask for more as the offer was less. This guy mustered up enough courage and very hesitatingly asked the HR. This HR was a very junior person. And lo-and-behold, a 75K increase in the per annum offer was given immediately. The freshers who graduate are mortally afraid to ask for an increase. Corporates simply take advantage of this.

3. Lack of employability: Many of the graduates come from colleges where rote education is the norm. They lack employability. Hence they settle for IT services companies.

Hopefully, in the future, freshers will overcome the cultural timidness and obedience and realize their true potential.

Regards,
lsjey

[SoumenD]

Originally Posted by splitinfinitive

I'm really sorry, but you're incorrect by a factor of ~70x here. Typically, wages and benefits constitute 70% of the costs of large players (think Wipro, TCS, etc.).

Source: Bloomberg

Well definitely 1% is way off but 70% is threshold only for maybe startups and 2nd/3rd tier bodyshoppers. As I remember while in one of the western country for 2 years my billing was 800$/day while I was paid 300$/day. It was one of the WITCH firms

[gvivek75]

Originally Posted by SoumenD

Well definitely 1% is way off but 70% is threshold only for maybe startups and 2nd/3rd tier bodyshoppers. As I remember while in one of the western country for 2 years my billing was 800$/day while I was paid 300$/day.

Well that's not how the calculation works my friend.

At the organization level, human resource cost is calculated across all grade bands and include internal support functions which are direct costs with no billable revenue.

Think HR, Admin, IT, Sales/Presales and other corporate functions. Also include people directly hired or moved to foreign locations and being paid in foreign currency, while costs are tracked in one single currency at the parent location - generally INR.

70% (or higher) resource cost in a knowledge industry is a pretty standard benchmark and for pure product and R&D companies can even be higher.

[Simha.k]

Note to mods : At the risk of being given an infraction and possibly a permanent ban too, I want to speak up one final time. Feel free to do what you deem fit.

Woah Woah Woah! OK. Let me put few things straight on record before I bid goodbye to this thread(and maybe Team BHP too) since few people assume I'm here to cry a river and gain sympathy from random strangers on a public platform!! I'll be the last person on the planet to find solace and comfort from total strangers on social media. I don't want 1 milligram of anybody's sympathy. Pls keep your sympathy in your pocket and go home. Thanks, but no thanks. I'm here solely to express my personal experience and observations.

I never anticipated that by speaking up the truth, many people get triggered!

I'm *NOT* an IT engineer. My knowledge of IT is below sea level. I don't know the ABCDs of coding. Don't jump to your own conclusions. How did your even conclude I could be one of the disgruntled employees of those companies? I never claimed to have worked with them. I just expressed my personal experience of being interviewed by them.

My current or previous profession is not even remotely related to IT. However, a few of the companies among WITCHA have the vertical domain I previously worked on.

When I graduated, a very very very small company offered to hire me. It was run out of a makeshift 2BHK apartment in Bengaluru. Guess what was the salary they offered me? Nothing! Nada. Zilch. Zero salary. Because the company believed that, we, as freshers were not useful to the company since they won't be generating any revenue from us since we would be under training for the first 3-6 months. Wow! After hard bargaining, the boss of the company opened up his heart and offered me a huuuuuuuuge salary of 2000 rupees a month with a condition that we must surrender our original marks cards and passport for a period of 3 years!! Well, guess what? The company was so damn pathetic, the pay checks used to bounce. Yes, the company didn't have 2000 in its account to pay an engineer. Why surrender passport you ask? So that we don't run away from that shitty place after being "trained". Just because there is excess supply of engineers, is this how you treat them? What are they? Sub humans? Where was the HR department you ask!? Lol. It was a one man army company. Everything was run by one person. The boss himself. I quit in 4 months flat. I wish I had lodged a police complaint against that man for having the audacity to ask me to surrender my passport! Nobody except courts in India have the legal rights to impound your passport. Keep this in your brain.

What was my fault in the above case? Being a fresh grad was my fault? Or falling trap to these chota mota company owners who exploit the cheap engineers?

Later I joined a stable company and everything was going ok. I was doing fairly good in that company. But, let me admit the fact here that the craze of going abroad caught on! Yes, just like anybody else, I too wanted to go abroad and earn in different currencies. I joined another company which was hiring a lot to send people abroad. I jumped on the bandwagon. The first 2-4 months were exciting. I saw many people get their visas stamped and fly out in a matter of days. A few months down the line, things started going haywire. Company couldn't get any projects despite bidding very competitively. A certain Indian company I won't name here had literally outbid everyone else and got all the projects in their kitty and even offered 2 FTEs FOC for every 8 billable resources. Pls name one non Indian company which indulges in such third class business practices. A lot of employees in our vertical started growing anxious and were worried about job loss. The VP of our vertical constantly assured everyone that everything was alright and there were lot of projects in the pipeline and nobody would be laid off. Later we realized that the pipeline was full of fart!

After an all hands meeting by the VP, a few employees received a phone call from the HR dept in another city that their notice period started the next day and they had 2 months time to pack their bags and go home. A few hours ago, he had assured no firing and a few hours later, a few of them fired. What do you call this?

What was the fault of the employees here? The company hired a lot of employees without a plan B or backup in place. Isn't it the company's responsibility to keep all employees engaged and find them billable projects? Or do employees need to go find their own project to generate revenue for the company? What were the highly rated sales guys doing? What were the business development managers doing? Only God knows these answers.

They made us undergo certain training cum certification and made us sign a promissory note that we're liable to pay the company 2lac rupees if we quit within 2 years. When the company underwent heavy losses, the entire vertical was shut down and all 70 of us were forced to resign and go home.

Now comes the fun part. Since we were very well within that "bond" period, and the company was letting us go, we weren't asked to pay the 2lac rupees fine. Imagine, if an employee had resigned within that bond period, he'd be forced to pay the fine. What skullduggery is this? So, the company can enslave employees and make them sign such stupid papers. The company won't pay employees 2 lac rupees when they're fired in the bond period. But the employees must pay up. Wow! The heights of hypocrisy is mind boggling.

Where was the HR dept? Well, they're nothing but a dummy and a puppet department at the hands of the mgmt who dance to their tunes. They're nothing but toothless cobra snakes who just hiss, but never bite!

After being jobless for a few months, I finally found a job. The sheer harassment at the hands of my reporting manager can't be explained in terms! Not granting leaves, forcing to come to office while sick, forced to work during weekends, holidays and festivals, use of extremely foul language during meetings, forcing people to stay late to deliver and the list goes on.

What was my fault here? Being submissive? Where was the HR? They didn't raise a finger against him despite knowing all facts. I heard from many sources that my manager was previously let go because a few employees lodged a complaint against him in his ex company.

Pls tell me what was the role of the HR dept at iGate in accepting Mr Phanish Murthy in to their company despite knowing he was fired from Infy board on a sexual harassment case? Why didn't they raise their voice? Would you accept a candidate in to your company who got fired on sexual harassment case? Well, guess what he did again? He got fired from iGate board too! Again on sexual harassment case. Companies conduct background check upon everyone who joins them. So, a top level mgmt guy is exempted from this check? Why did Infy settle for an out of court settlement and pay money from its pocket? Would they pay money if an employee was fired similarly?

HR department is good for conducting rangoli, ethnic day, deepawali and secret santa celebration at office. Pls list out 5 landmark HR processes/policies they've implemented in any company across India that truly stands out and makes a difference to employees.

What was the role of HR when they mercilessly fired thousands at Tech Mahindra and TCS? They just threatened everyone that they'd be terminated if they didn't resign. Is this what you call HR department? Where is the "human" in "human resource" department?

Mr Anand Mahindra himself said their HR practices were poor and needed reforms.

I got super frustrated with all this and ran away from India. And yes, I've changed my industry too. I'm pretty happy with what I have now.

Enough ranting today. Goodbye.

[hondatoyotafan]

Originally Posted by charanreddy

R At one point in time, I know of senior leaders in companies asking the hiring team to block CVs from a region due to high prevalence of fakes. This is not just in India. I know of a few usecases where on-site resources outsource their work privately to Indian SMEs for a fee of $1000 - $2000 while getting paid close to $100K salaries.

.

There was a company which was north indian owned in the US which put it in their job description and were promptly sued for discrimination because all graduates of a particular institute were classed as unsuitable. I myself did my undergraduate degree from the hallowed institute and had some recruiters tell me on the face about this. Even though there are a lot of fakes the IT industry in Hyderabad runs on those graduates. Thankfully i have a masters from a top 50 US university which i point out to the recruiters.

I work in the cybersecurity department of a fortune 500 american bank in Hyderabad. We mostly hire from tier 2 -IIT and NIT/BITS for freshers and sometimes the top talent of IIIT and Osmania. They are usually offered 15-18 lacs depending upon their aptitude. I can say that those freshers are well worth the price given their motivation and preparation prior to the jobs. Most of them make use of the internet connection on campus. Off late we are suffering from attrition of those freshers to top startups and other product companies who are even ready to offer 100% hike to them. The demand for right talent is high both in India and the US.

The indian salaries are now approaching 70% of Bay area salaries for most top talent. Even in america we hired a security architect for 400k in the bay area. Mostly because the higher powers wanted the position to be in office. We could get remote candidates for lesser though.

[V.Narayan]

Originally Posted by Simha.k

Note to mods : At the risk of being given an infraction and possibly a permanent ban too, I want to speak up one final time. Feel free to do what you deem fit.

Woah Woah Woah! OK......

I never anticipated that by speaking up the truth, many people get triggered!

!? goodbye.

Thank you for your long post. And the point you are trying to make regarding attrition in India's IT industry is????

[amol4184]

Originally Posted by Simha.k

They make every Tom, Dick and Harry apply for a frigging H1B. Unless you're a house keeping guy in this company, chances are that they may make you apply for an H1B. Haha.

Don't want to dampen the mood of any aspiring experienced candidates or freshers thinking they will all get free ticket to work abroad by joining Infosys, TCS, Wipro after reading above comment - sorry.
This is simply not true. Might have happened in early 2000s but not any more.

Other thing. If you get sent to USA after passing through many filters, they will make zero effort to make you stay there permanently (green card filing). Most of the H1B folks will be sent back after the end of tenure.
Please do your own research on this before making the jump to IT.

Source: my wife and I. And many of my close friends across different companies.

Originally Posted by Simha.k

I'm *NOT* an IT engineer. My knowledge of IT is below sea level. I don't know the ABCDs of coding. Don't jump to your own conclusions. How did your even conclude I could be one of the disgruntled employees of those companies? I never claimed to have worked with them. I just expressed my personal experience of being interviewed by them.

My current or previous profession is not even remotely related to IT.

Those were some supremely authoritative comments earlier.

Excellent example why one should take random internet comments even on reputable forum like t-bhp with pinch nay dollops of salt regardless of how confident they sound.

[V.Narayan]

Originally Posted by Simha.k

Woah Woah Woah! OK. Let me put few things straight on record before I bid goodbye to this thread(and maybe Team BHP too) since few people assume I'm here to cry a river and gain sympathy from random strangers on a public platform!! I'll be the last person on the planet to find solace and comfort from total strangers on social media. I don't want 1 milligram of anybody's sympathy. Pls keep your sympathy in your pocket and go home. Thanks, but no thanks. I'm here solely to express my personal experience and observations.

I never anticipated that by speaking up the truth, many people get triggered!

I'm *NOT* an IT engineer. My knowledge of IT is below sea level. I don't know the ABCDs of coding. Don't jump to your own conclusions. How did your even conclude I could be one of the disgruntled employees of those companies? I never claimed to have worked with them. I just expressed my personal experience of being interviewed by them.

My current or previous profession is not even remotely related to IT. However, a few of the companies among WITCHA have the vertical domain I previously worked on.

Dear Sir, I thank you for the long post you typed and shared your views with our members without ever having worked in the IT industry or being connected to it in any substantive way. Needless to say our vast group of members of whom tens of thousands are in the IT industry will find your uninformed perspective illuminating. You might have noticed, kind Sir, that most posts on this thread are rich in facts or personal experience of members directly involved with the IT industry. That richness of experience and direct knowledge is what makes the thread of value to our readers. Some posts are for the industry, some not so but by and large the writers shy away from regurgitating what they ate yesterday.

Please could you share your views of the employment practices of the aviation industry. I wait with bated breath to learn something new.

[raksrules]

Originally Posted by amol4184

Don't want to dampen the mood of any aspiring experienced candidates or freshers thinking they will all get free ticket to work abroad by joining Infosys, TCS, Wipro after reading above comment - sorry.
This is simply not true. Might have happened in early 2000s but not any more.

Other thing. If you get sent to USA after passing through many filters, they will make zero effort to make you stay there permanently (green card filing). Most of the H1B folks will be sent back after the end of tenure.
Please do your own research on this before making the jump to IT.
.

I agree 100% with this. I have stayed in US for 5.5 Years. My company (one of the WITCH) didn't file my green card. There is no black and white rule. They will do for some folks but always keep giving excuses like "slot nahi hai iss quarter mein". They will never initiate someone's GC in initial 4 Years of their H1B tenure. And then when time is right (as per company), things may get stalled.

So anyone younger here who thinks you will get onsite, be ware it is not so easy and now more so when US companies have matured a lot in terms of dealing with Indian service companies and will not easily be ok with onsite resources.

I understand there may be people who here may have got GC filed using their employer and may contradict what I am saying but I am mentioning own experience.

[alpha1]

From the tone of the posts on this thread - I am unable to make out a few things, some one from IT industry please help me:

1) employees have grouse against the companies or is it against the HR in the companies?
2) employees are cribbing about the high attrition rate or celebrating it?
3) HR is cribbing about the high attrition rate or celebrating it?
4) employers are cribbing about the high attrition rate of celebrating it?

That high attrition is happening is a fact governed by economics (supply and demand), the companies are free to choose their employees and people are free to choose their employers.

Guys in IT, you should celebrate this fact. Many other non-IT industry do not carry this kind of luxury. Which usually means stagnated salaries. More chances of working under horrible boss (with no quick escape). More chances of being laid-off without alternative options.

[amol4184]

Originally Posted by alpha1

From the tone of the posts on this thread - I am unable to make out a few things, some one from IT industry please help me:

1) employees have grouse against the companies or is it against the HR in the companies?
2) employees are cribbing about the high attrition rate or celebrating it?
3) HR is cribbing about the high attrition rate or celebrating it?
4) employers are cribbing about the high attrition rate of celebrating it?

1. Personally I think many are unhappy against the compensation they get. The salaries, as far as I can see are dictated through many functions and not just HR. When the cnb negotiations happen, they will stick to their measly salaries regardless of how insulting they sound. Their hands are tied. So combined answer? Company.

2. I am indifferent. I do feel sad when someone good leaves and company fails to retain them. I can see it impacting people (who did not resign) adversely. Hard to answer this one in a definite tone. Because of attritions, some people got much deserved promotions so there's that.

3. Oh HR is definitely unhappy - not only because there is constant grind of interviews and negotiations, but of late people keep them on the edge till last moment and then refuse the offers This is coming straight from by brother who is a director at a medium sized s/w company. They give offers to people and wait with bated breath until the candidate joins. These are unprecedented times.

4. I don't think any employer is ever happy about such ridiculous attrition rate but I could be wrong, having never worked in capacity as an employer of such large manpower. I do feel pissed when kaamwaali baai resigns though.