Compensation of IT companies

Monday, December 28, 2015

Wage wars

The Perk Wars are raging across US.
With cutthroat competition for talent and a sizzling job market in Silicon Valley and beyond, tech companies are seeking to attract and retain employees by pretty much spoiling them rotten.
The valley has always been a fertile breeding ground for workplace goodies, championed famously by Google with its gourmet cafeterias and on-site massage rooms. But in these talent-hungry times, Google seems almost stodgy compared with startups like the crowdfunding platform Tilt in San Francisco, where employees after a year on the job get a free plane ticket to anywhere in the world. Or real-estate giant Zillow, which offers free overnight shipping of breast milk from nursing moms on business trips to their homes. Or even software behemoth Salesforce, which recently held a “Miracle of Mindfulness Day” in which experts equipped “employees with mindful tips to help them through their work day.”
Millennials are getting a ton of “bennies,” thanks in part to all the startups whose mission is to deliver cool perks for other startups. Executives at Blueboard, which helps GoPro and others reward their employees with mind-blowing experiences, are seeing explosive growth.
“Companies are realizing that millennials really care about perks,” said co-founder Kevin Yip. “ And they’re looking for more and more ways to keep employees excited and to keep them from leaving the company for another.”
With its belief that employees prefer experiential benefits over financial ones, Blueboard provides perks for clients like lessons in stand-up comedy or the chance to be James Bond for a day, complete with rented tux, a sky-dive and lessons in making the perfect martini.
Companies are trying to outdo each with perks, said Meg Virick, a business professor at San Jose State University, because wages, at least nationally, haven’t risen dramatically. “So these perks are taking up a bigger and bigger chunk of the total compensation offered to employees.”
Part of the attraction to employers, she said, is that “they’re revocable if the company gets into a financially tight spot; you can offer yoga classes one day and stop them tomorrow. You can’t do that with wage and salary structures.”
More companies are offering financial perks specially tailored to young millennials coming to work in a part of the country grappling with soaring rents and home prices. With some new hires carrying huge student debt, the financial picture can seem overwhelming.
As Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, put it: “Some of the initial research on financial education in the workplace already suggests that a financially capable workforce is more satisfied, more engaged, and more productive for their employers.”
San Francisco-based Sindeo Mortgage helps its 75 employees with — you guessed it — low-cost home loans. Staples is using vampire-themed games to get employees excited about money-management and investing in a 401(k). And a firm outside Seattle called Pacific Market Research provides its employees with financial skills training.

Thursday, July 09, 2015

Government ups the ante on black money, says US return IT professionals need to declare 401k account

NEW DELHI: Anyone who's worked in the US and opened a 401k account may need to inform the Indian tax authorities or face harsh penalties under the black money law that came into force on July 1. Thousands of India's IT professionals and others who've worked overseas will potentially have to declare such investment plans as these will be considered foreign assets. The law prescribes stiff penalties for non-disclosure even if the asset is from income that' .. 




Thursday, October 13, 2011

When will India have its own Jobs (Steve) ?

Steve Jobs is dead. I wanted to make history by saying just that in this column and dramatically leaving the rest of the allotted space blank. I couldn't at first think of anything more to say. For, in the words of a poet: “Death. Nothing is simpler. One is dead!”

After setting out at the age of 21 to redraw the map of the cyber world with his out-of-the-box thinking, in his 56 years on the planet, this drop-out produced out-of-the-hat rabbits such as Macintosh, iTunes, iPod, iPhone and iPad. It will all be Jobs dominating the media and Web sites with innumerable tributes to his unparalleled genius which stood the computer industry on its head. The obituaries will liberally draw on his 2005 Stanford Commencement Address in which he recounts three stories that shaped his life and thinking, pointing out how his chucking structured educational courses, and later, being “publicly” fired from the company he himself founded, gave him the courage to follow his “inner voice” and his heart's dictates. He then movingly talks of the immensely creative force that awareness of approaching death can be.

At the moment, though, my thoughts are not on the passing of this innovator par excellence who gave the world the intriguing mantra: Stay hungry, stay foolish. The question uppermost in my mind is: When will India have its own Jobs? Or Gates? Or Larry Page and Sergey Brin?

TECH-COOLIES

Despite all that India boasts of its ancient cultural heritage — its epics, Upanishads, Arya Bhatta, Varahamihira, Sushrutha, the decimal system, the zero — it has not been able to match the Western mind in respect of the latter-day inventions and discoveries. India's record is abysmal in regard to the number of Nobel Laureates, scientific papers and patents.

I have long wondered why a Columbus should be discovering America, a Scott exploring the South pole, a Livingstone uncovering the Dark Continent of Africa, or a Cook claiming Australia and not a Ramaswami or a Rakesh Bhatt? Why should the falling of an apple lead a Newton to his Laws or the rattling of the lid of a kettle of boiling water lead a James Watt to the steam engine? Why did Indians with all their thousands of years of investigation into the mysteries of Brahman, the soul and the like fail to go into the scientific significance of day-to-day happenings as Wright Brothers, Salk, Fleming, Edison, Marconi or Baird did?

Even in regard to the so-called success stories in software, it is all an extrapolation of what was already common knowledge handed from the West, and not the result of any original thinking. Indeed, in some circles, Indians in the software field are regarded as no more than tech-coolies!

NEXT BILL GATES

There are, no doubt, success stories of Indians in other countries but only in run-of-the-mill professions (teaching, financial services, medicine). Most of them are mere salary-earners. The only Indian names coming up again and again for their extra-ordinary contributions in science are C.V.Raman, S. Chandrasekhar, H.L. Khorana and V. Ramakrishnan, of whom all but one were expatriates. What is it in the soil of the US that enables it to grow geniuses of the likes of Gates and Jobs and Page and Brin, and that too at such a young age, while India is yet to produce achievers of comparable calibre?

Here is a quick check list of reasons: The hierarchical set-up reflective of a feudal mindset, breeding conformity with established conventions and incapacity to break new ground or take risks; want of sustained focus on, and allocation of the needed funds for, both pure and applied research; absence of a sense of perfection, thoroughness and excellence; lack of self-pride.

However, here is a tidbit that should gladden our hearts: The Consumer Electronics Association of the US recently asked in a survey where the next Bill Gates will come from; 40 per cent of Americans predicted that he would be from either India or China. Amen (despite being bracketed with China)!

NRIs moving from the US to India: How much salary to expect

The fact that NRIs from the US are moving back to India is no shocking development. NRIs have, in the last few years, been relocating to India in large numbers, in search of better personal and professional lives. And if you are an NRI considering that move, there is one important thing that you must understand very well: the salary you will get in India.

Kris Lakshmikanth, Founder CEO of The Head Hunters India Pvt Ltd. says, "When it comes to compensation, we find that NRIs have inflated expectations. They mainly go by hearsay; their friend or friend's friend who returned to India has told them a tall story about Indian salaries. They want to go by that yard stick."

USD will not convert to INR

The first thing to remember is that you will not make the rupee equivalent of your US salary in India. The cost of living in India is significantly lower than that in the US. This also means a lower labour cost in India. These factors will determine your India salary. Seema Nair, Co-Leader India HR Operations of Cisco India explains, "The salary in India (for Cisco employees moving from US to India) is related to local labour market wage rates with a potential premium for critical skill sets."

Achyut Menon, head of Options Executive Search Pvt Ltd also adds, "In the nineties, people who were posted to India got expat salaries. But those days are over. In the last 10 years, India has become an attractive market for global companies who are not just looking to set up offshore centers here, but also to capitalize on the growing, educated and highly aspirational middle class consumer segment. Added to that is the availability of skilled labour within India itself. Companies no longer need to pay expat salaries."

Benchmark: What then should be the broad benchmark?

Both Lakshmikanth and Menon say that while there cannot be a standard formula, the Big Mac Index is a good guideline to calculate salaries. The Big Mac index published by The Economist, is based on the theory of purchasing-power parity (PPP), according to which exchange rates should adjust to equalise the price of a basket of goods and services around the world. The basket in this case being a McDonald's Big Mac.

Now according to the last available index dated July 2011, a Big Mac costing USD 4.07 in the US costs USD 1.89 in dollar terms in India (Rs 85 converted at an exchange rate of Rs 45). It means that the Big Mac costs 54% less in India; the cost of living is 54% lower in India. Read another way, this means that the rupee is undervalued by 54% to the dollar and that on the basis of PPP, one dollar would actually be worth Rs 21 instead of Rs 45.

So if you are drawing a salary of USD 100,000 in the US, you can expect to draw Rs 21 lakh in India, give or take. At an exchange rate of Rs 45, that would translate to an Indian salary of USD 46,666 or 46% of the US salary.

"Senior management can expect anywhere between 40% and 70% of their last drawn US salary when they move to India," Menon explains, adding, "At the 70% end would be people who have moved to India to set up a development/ engineering center or to head the global company's India start-up."

Best career move

Having set that broad benchmark, the salary would also vary between industries and functions. You would need to choose your profile and company carefully to maximise your salary.

"Manufacturing would pay less than technology. Within technology, we find that delivery of software is something which Indian companies have become masters in. They don't need to employ people from overseas. In fact, such people from the US are paid less than the person who stayed back in India because those returning from the US have handled fewer people teams as compared to peers in India," Lakshmikanth points out.

Similarly, domestic Indian companies do not usually recruit NRIs for strategic positions if the NRIs are not familiar with the dynamics of the Indian market and work place.

As an NRI moving back to India, Menon says it would be best to join a company in the US which has plans to start-up/ expand in India. "A lot of US companies across sectors like engineering, legal, analytics, financial services, pharmaceuticals are setting up operations in India.

These companies are happy to send an Indian to India who also has experience of their other markets. The employee benefits because he can grow with the company's operations in India. In the beginning, the company will set up a 30-40 staff office and expand going forward. As a member of the start-up, the employee grows as the company grows, making it a win-win for both" he explains.

Parting shot

"At the end of the day, come back to India for the same reasons you went abroad: for personal and professional growth and happiness. Come with a long term view in mind and you won't regret it," Menon advices.

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Thursday, December 11, 2008

Best time to hire for India Inc

The recession and slowdown in kicking in .Even as companies worldwide resort to layoffs or freeze hirings as part of cost-saving measures to counter the economic slowdown, Deloitte
Consulting believes the current turbulence actually presents India Inc with its best opportunity to enrol good people in their organisations. There's a lot of talent available in the market now and companies can indulge in cherry-picking. Most importantly, salary expectations are presently reasonable and jumping jobs will also not be on the top of a potential employee's mind for at least for a year or so.
Incidentally, attrition has already dropped significantly in the IT and BPO arenas since the financial crisis started spreading and companies began adopting a zero-tolerance approach. At the same time, the manufacturing segment has once again started catching the fancy of engineering graduates. India, despite the expected drop in growth, is likely to come out of the slowdown quicker than the industrialised West and should thus utilise the present crisis to put its house in order. Some people here are actually talking themselves into a recession and pulling down sentiment further. The present econominc climate presented governments with an opportunity to become more efficient by pushing through administrative reforms that would not have been possible if there was no economic crisis. There is no magic strategy that will turn the present global financial crisis into an unalloyed positive. However, governments worldwide can find the seeds of long-term advantage in the decisions they make now. The long-term effect of the meltdown could be positive with governments and policy-makers rebuilding their way of operation and not focusing only on short-term gains.

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Tuesday, October 07, 2008

Weak dollar to impact MNC’s pay packet

Fluctuations in foreign exchange value of global currencies, especially the US dollar, which is weakening against its rivals, following the financial turmoil in the US have severely impacted the compensation packages of overseas employees working with MNCs, a latest survey says.

The currency fluctuations affect all elements of compensation and consequently the attraction and retention of key employees, according to a survey by global HR consultancy Mercer. It further added most multinational organizations have not implemented solutions for mitigating the impact of currency fluctuations on current compensation programmes for overseas employees.

Nearly half of responding multinational companies (47 per cent) have agreed that the depreciating value of the US dollar has had a moderate to significant impact on their compensation programmes, the survey revealed.

“Foreign exchange fluctuations can have a substantial impact on compensation programmes. As the war for talent becomes worldwide, specifically for high-performing executives, organizations need a competitive compensation strategy that appropriately responds to shifts in currency for key employees around the globe,'' Mercer Principal Rebecca Powers said.

Compensation components, including equity-based long-term incentive plans, base salary and global mobility policies are impacted the most by currency fluctuations, specifically the declining value of the US dollar, the survey revealed

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Thursday, January 17, 2008

IT Doesn't Pay

Indian IT managers ahead only of Vietnam, Bulgaria and the Philippines.Want to earn more ? move to Switzerland
India, the global face of the information technology industry, is the fourth lowest paymaster, according to a global survey of IT managers.

Indian IT managers make an average of $25,000, ahead only of Vietnam, Bulgaria and the Philippines.
Switzerland ranked first in the survey with a salary of $140,960, followed by Denmark, Belgium and the United Kingdom. The United States ranked sixth with $107,500 in the global survey of IT staff at 6,545 companies in 35 countries conducted by Mercer.

IT Managers:
Lowest paymasters countries
1 Vietnam $15,470
2 Bulgaria $22,240
3 Philippines $22,280
4 India $25,000
5 Indonesia $31,720
6 China (Shanghai) $33,770
7 Malaysia $35,260
8 Czech Republic $35,880
9 China (Beijing) $36,220
10 Argentina $43,180


IT Managers:
Top paymasters countries
1 Switzerland $140,960
2 Denmark $123,080
3 Belgium $121,170
4 UK $118,190
5 Ireland $108,230
6 US $107,500
7 Germany $106,730
8 Canada $93,860
9 Hong Kong $90,340
10 Australia $88,850


Indian employees to get highest salary hike in 2008

Indians working with multinational corporations are slated to get the highest salary hike of about 14 per cent on an average across the world in 2008, as firms readily adopt measures to prevent their employees from jumping the ship.

According to data compiled by global human resources consultancy firm ECA International, Indian employees are expected to get the biggest paycheck increase globally this year, primarily driven by inflationary situations associated with the robust economic growth in the country.

"Salary increase in India is expected to be the biggest this year as companies have to keep in mind the inflation for their employees to maintain a good economic stature," ECA International General Manager Lee Quane said.

Other key reasons for the significant salary increase would be the talent-retention measures being adopted by the MNCs as well as soaring corporate profits that entitle the employees for some handsome increments, Quane said.

According to ECA International's Salary Trends Survey 2007-08, Indian employees working with MNCs are forecast to receive an average hike of 14 per cent -- the highest across the world, and up from 12.6 per cent in 2007.

India is followed by Argentina (12.7 per cent), Indonesia (11.3 per cent) and Russia (11 per cent).

However, salary hike in China, the world's fastest growing major economy, is likely to remain static at eight per cent this year.

Thursday, July 05, 2007

Fat pay packet: student offered Rs 23 lakh salary

A student of National Institute of Technology (NIT) has been offered a salary of Rs 23 lakh per annum during campus placement.

The salary offer was made by MNC Schlumberger to a mechanical engineering graduate with a CTC cost to the company of Rs 23 lakhs per annum for posting in India and Rs 44 lakh per annum in case of overseas posting, said NIT director Prof M Chidambaram Tiruchirappalli on Wednesday.

He said the placements during the academic year 2006-07 was one of the best in the country, with over 100 per cent of UG students and 94 per cent of PG students placed through campus selection.

Bakthavatsalam, who heads NIT’s placement cell, said one out of every five students had got two job offers this year. MNCs Microsoft, Yahoo and Texas Instruments and IT giants TCS, Wipro, Infosys and CSC and PSUs like NTPC, ONGC, IOCL, BPCL had approached NIT for placements.

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