Pay gap rising between freshers and top management in Indian IT companies

The packages of freshers have increased marginally, by 20 per cent, since 2010, while the packages of CXO-level employees have gone up by 70-90 per cent

The pay gap between top managerial posts and freshers in the Indian IT industry has been rising. The packages of freshers have increased marginally since 2010. On the other hand, the packages of CXO-level employees have gone up by 70-90 per cent, according to a report in Economic Times (ET).

Freshers constitute nearly 30 per cent of the workforce in India's IT industry. Their average annual salaries have stayed around $5,000. In the past decade, the salaries have barely gone up by 20 per cent, ET added. 

The salaries of mid-level employees have jumped 40-50 per cent in the same period. While for the top-level positions, the salaries have gone up by up to 90 per cent in some cases. 

"You have to pay people a living wage. Fresher salaries have barely jumped Rs 3.5-Rs 3.8 lakh a decade ago. Even inflation is not accounted for here. IT companies should pay them at least in real terms," Mohandas Pai, former chief financial officer at Infosys told ET.

The low wages have also impacted the attrition rate in Indian IT companies. Several reports have shown attrition rates jumping to 30 per cent in these companies. This is higher in fresher-level and junior-level jobs. 

Apart from attrition rates, instances of moonlighting have also been rising because of less pay, experts argue. 

The ET report also quoted Anil Ethanaur, co-founder of Xpehno, as saying that in the last 10 years, the entry-level cost to the company (CTC) has gone up by just Rs 90,000.

However, HR personnel, in the report, argued that the training costs of freshers have gone up, so their salaries have been kept low deliberately. Experts, including Pai, shunned this argument.