Freshers in Infotech can expect 40% pay hike: study

Fresher salaries on IT firms may soar by nearly 40 per cent over the next two years as multinational companies (MNCs) such as IBM, Accenture and Capgemini are planning to add over 1 lakh personnel in India by 2010, according to a new study by brokerage firm Edelweiss Securities.

Salaries for freshers are generally fixed in February-March for the offers made during the recruitment season (June-December) for people to join in second and third quarter of the next financial year. There is a 9-15 month gap between the time offers are made and people come on board.

Global IT companies will add around 1.08 lakh employees in India by 2010, by increasing the headcount to 2.73 lakh. This would be a 65.25 per cent increase from the 1.65 lakh employed by the end of 2007.

As the majority of the recruitment is from campuses, this would result in tightness in the demand-supply equation of "employable pool", resulting in triggering a salary hike, the study stated. 
 

HEADCOUNT
Company	2007	2009
IBM	70,000	110,000
Accenture	35,000	50,000
Capgemini	17,000	40,000
Oracle	24,000	33,000
Deliotte	8,000	12,000
Cisco	3,000	10,000
PWC	4,500	9,000
Microsoft (R&D)	1,500	3,000
Google	1,500	4,000
Intel	1,000	2,000
Total	165,500	273,000
* Estimated for the financial year

Except for Cognizant, MNCs such as IBM and Accenture have not recruited much from Indian campuses. The companies' first recruitment wave was directed at junior- to mid-level professionals (with over two years of experience) working with Indian incumbents.

"Having established a core base, MNCs have already launched their next recruitment wave," it said.

IBM with the intention to base one-third of its global services staff in India would increase its headcount in the country to 1.10 lakh in the next two years.

The company hired over 70,000 personnel in 2007, and intends to hire 20,000 in 2008. Similarly, Accenture is expected to hire around 50,000 in the financial year 2009, while Capgemini will increase its headcount to 25,000 by end-2008 and 40,000 by 2010, and Oracle will increase its headcount to 33,000, by 2010. Others such as Deloitte, CISCO, PWC, Microsoft and Google are also expected to follow the suit.

Around 40-50 per cent of these hiring would be through campus recruitments, a move that might be followed by the Indian IT companies such as Infosys Technologies and Tata Consultancy Services (TCS).

Infosys and TCS are expected to increase Rs 3 lakh per annum fresher salaries. The companies being the trendsetters in the industry, others such as Wipro, Satyam Computers and HCL Technologies would follow the same.

But as a first step, TCS has already hiked its offers to 78 a college for the financial year 2009, compared with 53 offers, while Infosys has made 26 offers a college (lower from 46 offers) in 2008.

The companies have also hiked entry-level pay in which Infosys increasing it by 24 per cent in 2008, and 15 per cent in 2009, while TCS has increased it by 12 per cent and 20 per cent, respectively.

This would also result in Indian IT companies spending 5 per cent of their total revenues for employees over the next three years considering hiring pattern, fresher mix and wage inflation among others.

For FY08, TCS visited 220 campuses and made 11,500 offers, while Infosys rounds at 263 campuses and made 12,000 offers. For FY09, TCS visited 285 campuses and made 22,000 offers, on the other hand Infosys made 685 visits and made 18,000 offers, respectively.