Finding talent in India can be incredibly difficult. While there are a number of under-and un-employed high school and college graduates in India, generally these individuals are not trained with the skills needed by multi-national employers.
In addition, some Indian candidates with strong skills may not fit the needs of multinational employers because of the historical variations in work practices from those found in the West. In other words, while at some levels, and in some industries, there are many candidates with the technical skills to fill a position, they may not have the cultural skills to “fit in” with an organization.
Finally, there is a shortage of talent at the upper end of the employment scale, particularly in IT. There simply aren’t enough candidates with the necessary experience to fill top roles. Turnover levels have gone up in many industries, including IT and IT-enabled sectors and, to a lesser extent, in advertising, marketing and retailing. Though still below the rate of comparable industry segments in the West, turnover can be a problem, as economic growth, increased salaries and a shortage of skilled employees at the top of the scale can tempt the best and the brightest to change jobs often.
As a result of this shortage, and to combat turnover rates, salaries have risen dramatically in high demand sectors, especially at the upper ends of the scale. In addition, salaries in India account for less than half the value of a typical compensation package. Benefits like rent-free or concessional housing, free use of motor vehicles and/or drivers, interest subsidies on loans and the like may all be part of a total compensation package.
Compensation
Although pay in India is considerably lower than in Western countries (and even some developing nations), shortages of skilled workers (especially in IT) have led to dramatic pay inflation. Salaries in some sectors of the economy climbed at a staggering 40 percent annually during the mid-1990s. Since then, the Asian financial crisis and the IT slowdown have caused the economy to cool off, with the job market following suit. Consequently, pay increases have slowed markedly over the past few years, although average salary increases continue to significantly outpace the inflation rate of 6-7%.
The best entry-level employees with a high-tech degree from one of India’s well-renowned Indian Institute of Technology campuses can expect an annual salary of around US$14-16,000. While this sum is substantially more than it was five years ago, it seems startlingly inexpensive when compared to the offers that some of these same graduates receive from companies overseas. Entry-level employees from second-tier schools receive lower levels of compensation.
Less skilled employees and those in other industries, such as the medical transcriptionists employed by multi-nationals who have discovered the cost-advantages of remote processing in the sub-continent, receive about $1,200 per year (this level is fast increasing), while the same job in the U.S. would command more than twenty times as much pay (about $25,000).
Depending on the industry and job function, employees higher up the corporate ladder in middle management can expect to receive an annual salary range up to about $US30,000. Senior level employees can expect base salaries ranging from about $35,000 to $85,000, depending on the function and the industry of the employee.
Benefits
The basic salary of an employee in India usually accounts for between 40 and 50 percent of the total package, meaning benefits or “allowances” are an important part of compensation in India. This is partly because there have traditionally been tax advantages to receiving payment in kind. Proposed changes in India’s tax rules will eliminate many of these tax advantages, which will present a significant compensation challenge for HR professionals in India. However, at this time, benefits still account for a significant part of any employment package, and thus continue to play a vital role in luring and retaining key employees. In addition, certain perquisites like housing, cars and loans (companies often offer their employees very low interest short and long term loans) will continue to be taxed at concessional rates, even after the new tax rules are enacted, and thus will remain in demand by employees.
Source:
http://www.globalhrnews.com/story.asp?sid=47
In addition, some Indian candidates with strong skills may not fit the needs of multinational employers because of the historical variations in work practices from those found in the West. In other words, while at some levels, and in some industries, there are many candidates with the technical skills to fill a position, they may not have the cultural skills to “fit in” with an organization.
Finally, there is a shortage of talent at the upper end of the employment scale, particularly in IT. There simply aren’t enough candidates with the necessary experience to fill top roles. Turnover levels have gone up in many industries, including IT and IT-enabled sectors and, to a lesser extent, in advertising, marketing and retailing. Though still below the rate of comparable industry segments in the West, turnover can be a problem, as economic growth, increased salaries and a shortage of skilled employees at the top of the scale can tempt the best and the brightest to change jobs often.
As a result of this shortage, and to combat turnover rates, salaries have risen dramatically in high demand sectors, especially at the upper ends of the scale. In addition, salaries in India account for less than half the value of a typical compensation package. Benefits like rent-free or concessional housing, free use of motor vehicles and/or drivers, interest subsidies on loans and the like may all be part of a total compensation package.
Compensation
Although pay in India is considerably lower than in Western countries (and even some developing nations), shortages of skilled workers (especially in IT) have led to dramatic pay inflation. Salaries in some sectors of the economy climbed at a staggering 40 percent annually during the mid-1990s. Since then, the Asian financial crisis and the IT slowdown have caused the economy to cool off, with the job market following suit. Consequently, pay increases have slowed markedly over the past few years, although average salary increases continue to significantly outpace the inflation rate of 6-7%.
The best entry-level employees with a high-tech degree from one of India’s well-renowned Indian Institute of Technology campuses can expect an annual salary of around US$14-16,000. While this sum is substantially more than it was five years ago, it seems startlingly inexpensive when compared to the offers that some of these same graduates receive from companies overseas. Entry-level employees from second-tier schools receive lower levels of compensation.
Less skilled employees and those in other industries, such as the medical transcriptionists employed by multi-nationals who have discovered the cost-advantages of remote processing in the sub-continent, receive about $1,200 per year (this level is fast increasing), while the same job in the U.S. would command more than twenty times as much pay (about $25,000).
Depending on the industry and job function, employees higher up the corporate ladder in middle management can expect to receive an annual salary range up to about $US30,000. Senior level employees can expect base salaries ranging from about $35,000 to $85,000, depending on the function and the industry of the employee.
Benefits
The basic salary of an employee in India usually accounts for between 40 and 50 percent of the total package, meaning benefits or “allowances” are an important part of compensation in India. This is partly because there have traditionally been tax advantages to receiving payment in kind. Proposed changes in India’s tax rules will eliminate many of these tax advantages, which will present a significant compensation challenge for HR professionals in India. However, at this time, benefits still account for a significant part of any employment package, and thus continue to play a vital role in luring and retaining key employees. In addition, certain perquisites like housing, cars and loans (companies often offer their employees very low interest short and long term loans) will continue to be taxed at concessional rates, even after the new tax rules are enacted, and thus will remain in demand by employees.
Source:
http://www.globalhrnews.com/story.asp?sid=47
