Salary hike in current scenario - IT companies

Thanks Sonal, Neeraj, Surendra, Vamsi, Uday, Harinath & Ramesh.

Look forward to more inputs from other friends.

Which are the sectors not affected by economy slowdown.Example - IT is most affected.

Sonia,

As far as now the telecom sector seems to be good and worthy for a while.

Regards,

Harinath R

Hi,

Dont expect any hike!!!

SKS

Thanks all. Your help is appreciated.

Can anyone provide me inputs on average hike percentage for other industries as well?

Dear Sonia,

Looking at the current market scenario there wont be any hike for senior level,but to retain lower level we have to give hike.
Most affected industry are IT, Banking, Retail etc.
Most of your companies are likely to tighten the screws on performance. This may mean longer work hours, work which is not up to your choice, lower tolerance towards non/weak performance.
With organisations cutting down on their expansion plans, or faced with lower business growth, forget about the promotion you were expecting.
More and more organisations will adopt the Jack Welch model of purging the bottom 10 per cent (asking the bottom performers to go). In some sectors, such as retail, realty, textiles and apparel, this figure may be higher.
Don't be surprised if you are transferred suddenly to a department/location, which is not of your choice.
Companies are likely to have a conservative approach on the per cent increments, and some sectors could see single-digit increments.
Employees in the top quartile of performers in their organisation may earn similar increases to previous years. However, the rest may see a drop in per cent increments. We are likely to see a few cases of 'increment holidays' and isolated instances of pay reductions.
Variable bonuses will be subdued, but I reckon that sales employees may see stronger incentive schemes since organisations will try hard to shore up their revenues.
The silver lining in all this is that with organisations going slow on external hiring, they will look for internal candidates. The external job market will also contract, but that does not mean there will be no job opportunities. Job opportunities will be largely fuelled by employee attrition/ turnover.
The demand for freshers will see an acute drop. The practice of fat signing-on bonuses are likely to be suspended. Largely, it is going to be a clear case of higher supply and lower demand. The only exception in the external job market is going to be for the 'star performers'.
Here are some pointers for those of us who will get impacted by the above scenario:
The first priority should be to secure your job and ensure that your name does not figure in the list of out placed employees. Pull up your socks and ensure that you do not belong to the bottom quartile of performers.
Be patient. Do not get upset at the lower increment, or delayed promotion.
Be extra cautious while taking a decision to change jobs. Unless the reason is compelling, you are possibly better off staying in your current organisation. If you do choose to make a change, negotiate hard with your new employer for a good hike and, if possible, a 'parachute mechanism' in case you are a victim of a layoff in the first year of your joining. This means you must be given 3-6 months compensation in case you are laid off.
If you are in one of the highly volatile industries (retail, realty, finance, or banking) and if you feel that your organisation is showing signs of vulnerability, proactively scan the external job market.
If you get an opportunity with a more reliable and stable brand, make the shift (even at the same salary). Look for signs of distress in your organisation (delayed salaries, vendors not being paid, senior managers leaving).
In your existing organisation, take a lot of initiative and be seen as a solid contributor in your team. If you have time, upgrade your skills. Try and be in the good books of your boss without compromising your conscience.
Salaried professionals have to wake up to the reality of what a downturn really means and 2009 is going to showcase enough of it. So far the situation is not as severe as to drop the 'oxygen masks', but yes, the 'seat belt' sign has been switched on.

Hi Sonia,

In this current global crisis, it seems there will no increments but also depends upon comany to company. Last 2 to 3 months it was been decided to give increments in 1 digit but looking into current scenario, there are less chances.

Even companies had not hit by the recession are also taking preventive measures to avoid cases like Lehman and Satyam.]

Above all, I agree to Sourabh, Payal and Badlu as well for their postings.

Regards,
Sheetal

Hi Viren Doshi,

Thank you for taking your time out in posting such valuable information about the current market scenario and most importantly focusing on ways as to how to tackle the current situation.

I felt that the message posted covers most of the aspects that the present market is facing. It not only gives us insight but is also preparing us as to what can possibly happen in the companies if not affected by recession till now...

It would be great if everone can give a reading to his article..

Once again thankyou for sharing it with us.

Regards
Rakesh

Sonia,

Agree with the comments shared by colleagues on the increments % which would be mostly a single digit or in a double digit based on the following :

• Purely on the project based performance and ROI.

• Industry norms/practices on increment percentages/ slabs (so that you are in synch with competitors and not lose retainable talent)
• Paying capacity of your Company (how large is it, how much is it affected by the current recession, the sector/industry you are in (some sectors are more badly affected), Govt. sops/stimulus packages to prop up your sector, financial turnaround plans)
• Financials - networth/cash- funds flow situation/free reserves
• Mission critical projects that would need retention of key personnel/technical hands
• Mindset of your top management

Frankly, some Companies within a sector may do away with any increments this year (ie employees may barely save their jobs) due to lack of projects/business/ business sustainability issues while some may accord a 5% increase to keep afloat the motivation levels.

This all will depend on the dynamics of the business situation of your Company at the moment - a situation internally best known to you. The mindset of the management is another factor that would dictate this issue.

The era of 20 to 40% increments are passe even for those high flyers in the sunrise industries like IT, BPO, Finance, Insurance, etc. Even the boom in the real estate/infrastructure sector of the recent past is pretty much passe as they are just able to stay afloat.

Progressive companies would delay the increments by two or three months depending upon the market conditions but they have to award the performers or sooner or later otherwise they would lose credibility and they would be prone to be poached by the competitors. This situation would put them in a discomforting situation one once the market improves. Here what is important is the clarity in the Employee communications by the Management to dispel the fears and rumours which paint the picture dim than the reality!.


The industries which are not affected badly are the SMEs and those who are fundamentally strong in Operations and command sizeable market share and innovative products.

However, the situation is not that bad as made out in the following above discussions..please refer to the link herein;

http://spartanvikas.wordpress.com/2008/12/14/is-india-still-in-recession/

To sum it up today’s times is a certainly challenge for HR.

This is not a moment to despair but to upgrade oneself and prepare for the future. We have been experiencing the good times for quite sometime and this shall pass soon.

Regards,

Rajat

Rajat,

Thanks for your inputs.

We are a US MNC with low manpower but high turnover, a IT product company.
Our India office is requesting our headquarters for a hike for the India employees.The number of employees in India is also less.It is yet to be decided whether we will get a hike.

Do you have any article or facts, statistics to substantiate that some companies are giving atleast 5% hike to their employees in India.I need to provide the document to my Country Head, so that a decision at a CEO(US) level can be made.If you have any article to show the comparision of hike between IT and other sectors in India, that would also be helpful.I gave my Boss, my inputs after discussing with my industry friends, but he wants any document, article which can substantiate this for proof, which would be helpful in convincing the senior management.

Your fast response would be appreciated.

Thanks
Sonia

Hi Sonia,

We are in the same boat as you are in though not in It sector but manufacturing...

GroundReport | India | Survey predicts lower salary hikes in 2009

Perhaps this report may help and as mentioned in my post that it;s your Managment in India has to take a call and take a stance with the above arguements.

Regards,

Rajat