IT pays well, but only to a few lucky ones

By Thanuja BM & PP Thimmaya

IT sector is generally seen as among the best paymasters in India. Often, parents tell their kids that it is one of the faster ways to become a ‘lakhpati’. However, the reality is that only a minuscule number get into the magic circle with six figure monthly salaries.

A look at the number of persons at the top three Indian IT services giants — TCS, Infosys and Wipro — who draw salaries over Rs 2 lakh per month or Rs 24 lakh per annum shows that this group constitutes just around 0.5% of their total headcount.

To be specific, TCS employed 85,582 persons at end of FY07, of which 221 employees get salaries over Rs 24 lakh pa, accounting for just 0.25% of its total staff strength. And only 11 individuals get over Rs 50 lakh pa which accounts for 0.01% of the employees.

Bangalore-headquartered Infosys Technologies had 72,241 persons in FY07, of which 531 belong to the Rs 24 lakh pa plus category, accounting for 0.73% of the total employees. Of this, only 32 persons draw salaries over Rs 50 lakh, which is 0.04%. Its city peer Wipro employs 75,052 employees, with Wipro Technologies and Wipro Infotech accounting for 67,818 people. Some 306 persons get above Rs 24 lakh pa, accounting for 0.4%. Of this, only 39 get above Rs 50 lakh pa, which is 0.05% of total employees. Only three persons in TCS including CMD S Ramadorai and four in Wipro including Chairman Azim Premji make it to the Rs 1 crore plus pa category.

What do these figures tell you? Well, that one has to be among the high performers or have special or niche skills to get there. The road to salary figures of Rs 2 lakh per month will also certainly take more than a decade in an industry which sees an average hike of salaries in the range of 12-15%.

Says Stanton Chase International vice-president Priya Chetty-Rajagopal: “People with niche skills and positions can get into the Rs 24 lakh plus bracket in 10-12 years. However, for certain businesses and domain areas, especially in the BPO sector, it could happen in 8-10 years depending on the individual.’’ Concurring with the above view, Vati Consulting CEO Amitabh Das says it is a fast tracker with an engineering and MBA degree combo who reaches this level.

Experts say that apart from these salaries, many of the high performers have performance variables and Esops which contribute to a larger overall pay packet. Some companies give Esops which are equivalent to 40-50% of their salaries and are in addition to the salaries paid.

Even at the broader level for the IT industry, it is not a case of those entering the profession turning lakhpatis overnight. TVA Infotech CEO Gautam Sinha says that about 25-30% or 2.5-3 lakh employees of the 1-million strong Indian IT industry get salaries over Rs 1 lakh per month or Rs 12 lakh per year. And about 1-2% of this number, ie 10,000-20,000 people across the industry, earn a Rs 24-lakh and above salary, excluding Esops and extra benefits.

The average time taken for a fresher to breach the lakh mark depends on the institute the person comes from and the base salary in the campus offer letter. “If one has got a Rs 6 lakh per annum offer, which is typically high end of the fresher market, you can reach the six figures in 2.5-3 years. Whereas if you have got a Rs 2 lakh offer, then it will take one about 6-7 years to reach the mark,’’ says Mr Sinha.

According to a compensation survey and student perception study conducted by Campus Connect, a division of CareerNet Consulting, just 2.5% of over 4 lakh engineering students graduating every year in the country draw upwards of Rs 7 lakh p.a.

Source: The Economic Times, 10th July, 2007