[hothatchaway]

Originally Posted by KL01toKA03

I understand the logic connecting salary and cost of living. However, I fail to understand why companies follow the herd, and stay in cities where the cost of living is high. A company moving from a large city to a smaller city (could even be a nearby state) should attract a lot of people who are not tied city.

I think the people in charge of staffing, ie HR is either just looking to do enough to keep their own jobs by playing the bidding war and hiring replacements at market cost or don't have the authority to start the debate that you mentioned. Also, as a member had mentioned that it's the 3-8 year experience band which command the premium and for many in that category, their spouses are employed in the city they live in or kids go to school, so moving away from a Bangalore or ggn isn't really feasible.

I also think that the sample size of the folks commanding these hikes is small as a percentage of the total work force and gets amplified thanks to mass media. The very CEOs who are denouncing these sky high pay fuelled such cut throat practices and will be the first to leave employees high and dry when the time comes!

[AZT]

LocusJag made a good point above. In the next decade, our advantage will no longer be cost saving but more experience focused. Can't say how this will play out but I do see the US and Europe eventually getting some of these jobs back or mandating it once they reach a stage where their own young grads can't find meaningful work.

We already have companies asking in their RFP's about whether the work will be off-shored and if yes then where. Right now it may just be an informational exercise but eventually it will start becoming a deal breaker if that's where their political wind blows.

[NetfreakBombay]

Originally Posted by Samurai

This situation is really unsustainable....
Just because the company has to pay 50%-80% more salary

It is sustainable in niche areas :

1. Some of the jobs are now directly from US companies. This cuts down middleman (IT Services / Project companies). And enables someone to pay 70k USD for 5 - 8 years Workex. This is significant cost saving if someone in US is going to manage and developer requires minimal supervision.
2. Some of these "salaries" have Stock Options. Not possible for private companies to match this, but easier lever to pull for some companies (product and Indian arms of MNCs).

[m8002?]

Originally Posted by KL01toKA03

I think companies should open up to the idea of moving to smaller cities and offering salaries similar to what they would give in a bigger city.

You want to have your cake and eat it too!! Why would they setup the whole infra in Trivandrum if they have to pay the Bangalore salaries? And if another competitor moves to Trivandrum with a higher package, will you remain loyal to your company?

Ultimately, what matters is what the city offers as a package. For people in their 20s, no other Indian city offers a balance of good climate, cosmopolitan culture, more career opportunities, relatively safe environment, etc, etc. The cost of it is higher living costs and traffic. Walk into any engineering college and check, given the same starting salary, which city do the grads prefer.

And its the same in all parts of the world. Why are people flocking to Bay Area/Seattle or London? why doesnt MSFT or Apple open a dev center in North Dakota or Wyoming?

[lazy]

Just my 2 cents, esp for Services firms.

Here the starting salaries are at 3-4 LPA since almost 15 years now !!!
These firms deserve the attrition they're seeing.
They've have gotten away by paying pathetic salaries for over 2 decades now, in addition to quite bad environment they offer to their staff -
- hardly any firm gave ESOPs
- no semblance of work-life balance
- no respect (forced Sir calling, shouting in public etc)
- no upskilling (no sponsored training from good institutes)
- very babu type culture, even formal complaints aren't handled fairly

Capable/ambitious people stayed despite the low salary and above factors, in lure of emigration. Due to Covid, now that path is bleak, so such folks are quitting to get higher salaries.

Clearly the upper management and HR have been caught napping.
Not keeping tabs of market trends, salaries, employee aspirations, etc is sure to have a cost, isn't it?

The worst for these firms is yet to come - when their client organizations will completely bypass these greedy and inefficient intermediaries and hire IT professionals directly in India.

cheers
lazy

[Holyghost]

Originally Posted by kavensri

Just to quote an example from my wife's sister case. She is into mobile application development work and her current CTC is around 9L. She got her first offer at 16.5L. Then second offer at 21L, third offer at 23L. After the final negotiations, she is joining this 3rd company at 23L plus 2L joining bonus.
Agree that her current salary may be less, but she has been getting unbelievable offers since she got that 16.5L offer.

I am just curious, when you say 23L CTC, what would be the take home salary?
I work in a very small organization and we do not have the concept of this CTC. What they offer is what we get every month with the only deduction of TDS.

[warrioraks]

The current situation reminds me of 2007-08. IT sector was booming with job offers galore, stock markets were moving uni-directionally and there was irrational exuberance in general no matter whom you spoke to. But then we all know that happened next year, when the music stopped one day leading to chaos and bloodbath.

I think what we are seeing right now in IT sector salaries is a by-product of cheap money bankrolled by the sovereigns. It first led to mindless inflation of financial assets (crypto, stocks, etc) and now is trickling to inflation in other areas - labour cost being relevant to discussion at hand. I have heard of people who are already decently paid by market standards get up to 90% hikes in the current job market. How do you retain talent in a market like that? It’s a joy ride out there in the middle of the biggest pandemic in the last few decades.

Either we humans as a society have found a way to be super resilient to anything that is thrown at us, or this is a big giant bubble which is better to un-see. Either ways, we will be wiser in hindsight.

[kavensri]

Originally Posted by Holyghost

I am just curious, when you say 23L CTC, what would be the take home salary?
I work in a very small organization and we do not have the concept of this CTC. What they offer is what we get every month with the only deduction of TDS.

CTC generally includes below components:
1) Basic Salary
2) HRA
3) Flexible Benefit Plan
4) Employers PF
5) Gratuity
6) Performance Incentive/Bonus

Now, first 3 are included as part of monthly gross salary and Bonus is paid at an interval (quarterly/yearly) that depends on employee's and company's performance.
4 and 5 - They are self explanatory.

I hope i have clarified your query.

[NetfreakBombay]

Originally Posted by lazy

Here the starting salaries are at 3-4 LPA since almost 15 years now !!!
These firms deserve the attrition they're seeing.

+1

~4 lakh salaries are just not sustainable. Most good fresher jobs start at ~8 lakh now. Anyone who can, will switch after for 2 - 3 years.

EDIT : Above does not apply to some jobs (say upgrade Java/Python/DB version or libraries across 500 applications... OR Manual support for Applications etc. Such jobs can't afford to pay any better since automation become financially feasible at certain price-point).

[jetsetgo08]

Originally Posted by hothatchaway

I also think that the sample size of the folks commanding these hikes is small as a percentage of the total work force and gets amplified thanks to mass media.

I can vouch that this clearly isn't an amplified news. I personally know a few who are drawing anywhere between 35-45LPA stocks excluded , with 9 years of programming experience in Java (not niche skill set like AI/ML/Data Science) . It is a situation of both mass attrition and mass recruitment. A sizeable number of openings can be attributed to the attrition as well.

[sunilch]

Originally Posted by jetsetgo08

I can vouch that this clearly isn't an amplified news. I personally know a few who are drawing anywhere between 35-45LPA stocks excluded , with 9 years of programming experience in Java (not niche skill set like AI/ML/Data Science) . It is a situation of both mass attrition and mass recruitment. A sizeable number of openings can be attributed to the attrition as well.

This is pretty normal to be honest. Think of it relatively -- The INR has depreciated a lot in last 10 years (at-least 70%) and this represents about 50-60% of what you will have to pay to an equally good programmer in a developed nation. Normal rates in US/EU/even HK for that matter are at-least 100K p.a., not taking into account the base location. Hot locations such as NYC, SoCal, LN are more expensive to hire a developer with 10 years of experience and good in language such as JAVA, Python, etc.

The assumption here is the people who get these salaries in India are good at what they know. Even if it is programming only and not a niche skill. And niche skills too have their demand/supply curve that they go through. Look at what has happened to Big Data or Cloud Infra (AWS) skill set.

Having said this, not every company in India is capable of paying this much to all such developers. Simply because of two reasons:

1) Their business model won't support them
2) Not everyone deserves this pay

There are only a few companies who are capable of paying this high salaries to many of their workforce because the are from one of the following groups:

1) Very well funded - VCs, PEs
2) Have monopoly in their market - Market Dynamics
3) Have access to cheap money - Liquidity

[ACe_10]

Originally Posted by Holyghost

I am just curious, when you say 23L CTC, what would be the take home salary?
I work in a very small organization and we do not have the concept of this CTC. What they offer is what we get every month with the only deduction of TDS.

Your are not receiving a ‘salary’ but rather professional fees. I would presume you would have signed a retainer/professional services agreement with your organisation.

You are not classified under law as an employee but rather a consultant. Salary and professional fees are also taxed differently- While you miss out on a few employee related perks like gratuity and employee contribution to provident fund you more than make up for it in the deductions allowed for professionals and the savings on the income tax.

[how_you_doing]

The salaries of some of the tech guys in Bangalore can cause a mid-life crisis for many who are not working in these ~20 odd companies in India.

Since I am in Bangalore, here are some of the salaries that I know personally -

1. 33-year old working in Uber India - 92 Lakh
2. 36-year old working in one of the FAANG companies in India (working for their global office) - 96 Lakh
3. 40-year old working for Microsoft India - 96 Lakh
4. 48-year old India head of 50 people US-based FAANG type of company - 5 Crore
5. 33-year old who worked for 4 well-funded startups and now is head of operations of another startup - 1.2 Crore
6. 34-year old who has changed 5 jobs in 5 years, all in Bangalore startups now making 70 Lakh. He was at 20L salary 5 years back.

Do note that almost all of these include vested ESOP, bonuses, and shares. For example, the take-home salary of #2 above is around 3 Lakh (he will get a 10 lakh year-end bonus, stocks and some other bonuses which are included in his 96L CTC)

You can check https://www.levels.fyi/Salaries/Soft...ngineer/India/ to see more such salaries. There is also TeamBlind (https://www.teamblind.com/) if you can tolerate some jerks.

The starting salaries of 21-year old top CSE students from top IITs/NITs/IIITs is around 30-50 lakh with median as 20+ lakh.

I am sure people who switched streams from Engineering to MBA some 10 years back are regretting their decision as now top Tech/FAANG are talking about retiring at the age of 40 (read about FIRE movement - Financial Independence Retire Early).

I need a cold shower after writing this post.

[srvm]

Wow! The salary numbers thrown by some BHPians are scary to a non-techie like me.
A colleague (again non IT guy) who is about 40 years old, topper from IIT and IISc (non CSE background) with about 12-13 years experience earns around 24 lakh per annum in our core engineering company

[Latheesh]

Numbers are shocking for techie guys too. I heard from my friend that couple of his team members (around 8-10 years experience) left recently and both had offers in 60L range. Also heard that one of the ex-colleagues who left few years back is now getting close to 1 Crore salary (again ~10 years experience).