Stagnant IT fresher salary drives engineering graduates to look elsewhere

Information Technologies (IT) sector, which used to be the largest recruiter of freshers from engineering colleges offering them competitive salaries, seems to be losing its edge to non-IT sectors, which are offering better pay packets to these campus recruits. According to a report by JM Financial, over the past 10 years, the average campus salaries from mass hiring by IT firms have grown at a compound annual growth rate (CAGR) of just 3 per cent as compared to 8 per cent increase by the non-IT companies. Consequently, more engineering graduates are getting attracted to non-IT companies as start-ups and global companies offer more jobs at higher salaries.

According to Pankaj Kapoor, research analyst at JM Financial, campus salaries have had a spiralling impact on the total manpower costs (that are 50 per cent of revenues) for IT firms. A survey of 44 engineering colleges indicates that the average campus salaries offered by mass-hiring IT companies in 2018 was at least 30 per cent lower than that of non-IT companies. IT firms have also increased hiring from average inistitutes and reduced hiring from non-IT branches. 

On the other hand, increasing number of global companies and start-ups are hiring and attracting talent at campuses with their higher salary offers.

Source: JM Financial