Increasing salaries in India- Wake up call??

It is interesting to note two popular business newspapers carrying two perspectives of the "tough times for Indian companies" theme!!

Today's Economic Times has a headline right below the masthead screaming " TCS cuts staff salaries". As one reads it through, one is re-assured that itsnt too bad!!

"TCS has clipped a portion of the variable pay linked to its performance, effectively reducing an employee’s salary by about 1.5% for the January-March quarter, "

" the management has sought to lower their expectations of wage inflation through this small cut -in view of macroeconomic challenges,”

Typically, a TCS employee gets 70% of salary as fixed component and the rest as variable. The latter, in turn, is split into one part linked to individual performance and the other to company performance. So, the cut is essentially a speed breaker, and must be seen in the context of the larger picture that the party isn't going to last forever.

Refer late last week Business Week's story on "India companies struggle as wages rise " .
More than the paucity of people it is the expanding company ambitions, of a lot of new entrants as well as consolidation of established players in the fast-growing sectors such as retail, infrastructure and engineering, aviation, health care, technology, and real estate, where the demand-supply gap is huge.

Like they say- its all happening out here....

What are the lessons for us, as HR professionals? As employees planning our careers?

I would like all of us to read a masterpiece of an interview by DNA probing Mr AM Naik of L&T .It is a must for all students of business and one can feel challenged by the sheer passion -while echoing his views on outsourcing & the effect on career management, visavis building a nation-and what if both are all aligned together!!

There is also some truth to the fact that when the IT and ITES industry were rampantly growing in the late nineties, the manufacturing industry in India -was perhaps looking inward- without realising that an entire generation of youngsters found it a very poor cousin, and another generation of experienced engineers were leaving for greener pastures.

For once, can we stand back - breathe heavily, and look at the larger picture? Can we learn before it is too late, once again?

Raising the bar- hiring in India

The job market in India is going through an exciting phase. Almost all companies-be it the global MNCs, Indian business houses, the emerging companies in the sunrise industries, the startups- are scampering to get the best talent for themselves.

The increasing demand for the limited talent pool has increased the salary levels of professionals across the industry-phenomenally-often a few multiples in the last 3 yrs.

I have always had a pet theory-an organisation needs different kinds of people for different stages in the lifecycles of their growth. Every company has a need for some 'maintenance' professionals (who would keep the existing business running -and grow it), and another set of 'development' professionals- who would help the company shift gears, change the plane of operations -and take them to the next level!!

This year, I am vindicated as one sees some distinct trends emerging :

Companies are thinking laterally.

Tradtitionally known to hire entry level professionals, companies from diverse sectors such as private equity, business development, sales, consulting, finance, general management, IT, marketing, operations, retail and strategy are visiting the campuses of premier B School for middle management positions.

Global majors prefer experienced candidates over novices.

Companies in the sunrise industries, like infrastructure, logistics, warehousing, and retail seem to find ready made talent unavailable -to run business units. While most have hired returning Indians with a proven track record, we now find B schools a talent pool for the seniors too!

Job profiles being offered are also in the higher echelons of management such as vice-president, director, associate director, general manager and vertical heads for India.

Interestingly, the one year full time MBA programs for experienced professionals -be it the IIM, XLRI, ISB, FMS, et al have essentially attracted those with 10-20yrs of experience in the industry-and government/PSUs, even ex Defence officers, as they embark on their second innings to leverage on their experience-with the new enlightenment.

Wealth management cos bullish on hiring HNI's

The list of those who’re roped in not only includes the creme de la creme of the society but also sons and daughters of some of the leading politicians. The rationale ?“Such employees generate leads, and in some cases they also educate their peers about the importance of wealth management. Since they come from a similar background as of prospective clients, the clients are also comfortable with them”!

Diving deep for expertise

I recently read a very interesting article, using a Zen Master quote stating “If you go deeply in one thing, you know everything else.” Dr Srikrishna explains that being the best writer/runner/plumber, is not just acquiring knowledge or competency, but about focussing on the crux 'how to learn' . So, it is only a matter of applying this knowledge to the specifics of the new thing you are trying to learn -before you start transplanting the success!!

I, for one, am trying to motivate a bronze medallist at the National level in Fencing, to join us at Options and am convinced she can be a great recruiter in a few years time. Now, whether she shares the same confidence-only time will tell :-)!!

Pick of the Jobs -Options in India

This is just a brief posting-for those well wishers who do not visit this blog, as they subscribe to the feeds!

I have been told to specifically point out that there is a separate blog I write- occasionally mentioning the kind of openings we, at Options-keep handling from time to time! And while I have added a widget on the right hand side of this blog, apparently those who register for updates keep missing this!!

Have a great weekend! I am a little busy trying to catch up with leads of returning Indians in

-the construction industry-with experience in designing intelligent buildings

-the sales & distribution experience in animal nutrition business

-fund management of PE firms, and

- yes, senior technical architects in the software industry! Anyone with virtualisation experience? Or those with competency in computational geometry?!

Should you be aware of someone, please reach out to [email protected] !! Thanks!

Rupee rise and the US-India salary gaps

Among all the queries that I get almost daily-from the aspiring returning Indians, the most popular is the very sensitive issue of salary.."what salary can I expect in India?'!!

It is a typical catch 22 situation- everyone admits that they dont expect the same dollar salary-and surely they would take a drop- but how much?? And then begins the 'cat n mouse' game!!

In the past, I have 'parrot'ted the concept of PPP-and how a dollar's value isnt the conversion rate-but more like 9-10 times the rupee- since thats the value it can buy! One is also aware of the media hype of the 'premier school placement offers' that touch obscene proportions-and ofcourse, everyone has a pal or relation-who had recently made a move to India- and got a bomb!!

Well, I guess the debate continues- and I do hope the white paper compiled by the leading search firm Manpower does give some of us some pointers to mull over!

While the article does give some home truths, like :

"1. the robust local currency is also narrowing the gap in salaries of software professionals in the United States and India

2. the companies taking other remedial measures to increase productivity and improve efficiency in their operations instead of resorting to cost cutting around people"

it quotes a few figures -comparing how the salaries have eveolved during the years 2006 to 2008(projected).

However, one really can't draw too much from the article, and am hoping we can see more about the survey in the public domain soon.

I have culled out some of the numbers given in the article, and tried to reconstruct the missing figures to help us analyse it a little better: --























-Typically, at staff levels, where the numbers are high, it is indeed a cost arbitrage scenario-when the salaries in India are typically less than one-fifth the cost of an employee in the US.

-As the hiring gets to the middle and senior management, there is indeed a premium on the skills and international experience, for the salary levels are almost 40% and above. Which is perhaps where most the of the returning Indians are being hired.

-However, the caveat is that while the salaries in US have been more or less stagnant for the last 2 years, the middle management salaries in India seem to have gone up by almost 70% from 2006 to 2008!! How much higher will it go-is anybody's guess!

Ofcourse surveys do tend to generalise...and this is restricted to the software industry. I can't resist but ask -is the party for returning Indians in the IT sector beginning to come to an end??

Evolving Indian IT industry - Changing profile of jobs?

In a recent article, Mr Shantanu Narayen, President & COO, Adobe Systems, listed out the different phases in the software industry in India.

"Testing and maintenance. Back in the late 90s, many U.S.-based businesses were being lured to India by the promise of access to low-cost, well-educated talent.

Product development. By early 2000, perceptions of India were changing as its technology labor market matured and multiple accomplishments began to accumulate. Increasingly, the world began to view India as a promising center for product development.

Business ownership. The transition from product ownership to the increased responsibility and accountability that comes with business unit ownership -ie , setting product and go-to-market strategies, product management and development in India represents a leap of faith.

Bellwether for global markets. "Moving forward, I see India as a driver of corporate growth agendas as a launching ground for next generation technologies. eg - mobility and software as a service (SaaS)

- With the mobile phone becoming a primary computing networked device, it opens up enormous opportunities and challenges related to publishing and content delivery, whether it’s print, graphics, video, or any other format.

- Offering software when and how a customer needs it, in a pay-as-you-go model, makes a lot of sense in countries that have had barriers to adoption.

-Globally,the supply of engineering talent with experience in programming ‘SaaS architected applications’ is in short supply and India may well turn out to be the leading source for such talent. "

Going by the trend, isnt it obvious that the nature of jobs on offer to will change? Will there be a heavy emphasis-shifting away from technical management to business management, and market management roles?

As a recruiter -in the recent past, despite all the hype for the increasing demand of returning/returned Indians, the highest priority was for roles for middle and senior management professionals -say in the 100-150k USD range of professionals. In contrast there were significantly lower roles for the 'executive management' professionals -especially those drawing 200k USD and more- as they were more likely to be at the 'corporate office ' and the calling the shots!!

Do we see a shift from the 'tactical expertise' to 'strategic competence' in future?

How are we, the recruiters and the HR folks changing the way of hiring? Are we gearing up for the transition, by ignoring 'active jobseekers' and instead focus on 'passive jobseekers' who are more likely to be the most effective people?

Do we see the professionals themselves be more 'personal brand savvy' and position their equity accordingly, by being accessible on the internet ? Would there be an increasing adoption of web 2.0 tools, say like blogging, social networking,...by the entire eco-system?

I can personally see the slow but definite awareness increasing. Right here in India, the job portal Naukri- essentially an active jobseekers tool, is trying to expand its offerings by allowing recruiters to blog . While the feature has been on for over a year now, and most have just used it as an extension of job postings, there is a refreshing change of late!

You can see a Boston Analytics blogger evangelising 'research and analytics' as 'knowledge services outsourcing' and distinctly different from the KPO and away from the 'routine and mundane' BPO -while another estolls the virtue of being an Avayan!

The future is here. Looking for a change? Change the way you look!!

Gautam Ghosh's blog voted the Best HR Blog of 2007

Breaking news!!

The blog, by my blogging guru and pal Gautam Ghosh, has been voted the best HR blog by other global peers-in the annual round up conducted by Recruiting Blogs -a recruiting blog about recruiting blogs! Isn't surprising -for he has been among the best in the business for almost 4 years now- giving incisive analysis about the HR trends -not just across India-but across the world.

Another expected result was that an associate Dave Mendoza has been voted the Best Overall Recruiting Blog of 2007. His blog is a must read -for anyone interested in recruiting! Dave has been among the most prolific of networking professionals, and has been voraciously writing on a variety of global and(g)local topics- very consistently. I recall his was the most popularly voted blog in 2006 too :-)!

I have interacted briefly with Dave in 2006 and simply could not keep pace with his passion-as he was testing waters -along with Shally Steckerl-who is a sourcing expert par excellence- to know about the Indian market.

I would highly recommend all HR and recruiting professionals-who wish to keep tab of the action in India, read the presentation of Mr Sanjay Singh, Vice President of HR, Whirlpool Asia ERE Global in Amsterdam in Nov 2007. It is an in-depth treatise, outlining current trends in the job market and economy, competencies in the Indian workforce, forecasts into 2020 and the overall risks and benefits of the talent landscape in India.

While still on the best benchmarks, I would not be doing justice if I didn't point out that the blog of my dear pal Jim Stroud, has been voted among the best- in THREE different categories...the Best Overall Recruiting Blog, the Best Recruiting Blogosphere Personality, and the Best Sourcing/Research Blog. Personally I have learnt a lot from him from his insights-as he rants about the 'whacky world of employment' analysing a varied topics -ranging from the the visa temple in Hyderabadto using comics to drive home the logistical talent of Santa Claus !!

The year ahead...opportunities & challenges

It is that part of the year -when almost every one is taking stock of the situation, making resolutions -and purging out lists of all kinds. While I too cannot resist the temptation, I shall try and make it short and crisp!

I know there is an overwhelming 'feel good' mood pervading all across India, across industries- and not the least, the booming sensex. I would attribute it as a transitionary phase, as the closed economy that has enjoyed the flush of liberalisation -thanks to fresh capital and cheap labour. There is also the effect of the US subprime story. However, my own conviction -is that now the time has come when the men will start differentiating from the boys.

The next growth will necessarily have to depend on companies acquiring real competencies, and the economy developing real efficiencies. We just cannot bank on being at the right place at the right time, and hope for the party to continue.

As a recruiter I have seen salaries in India have gone up a few multiples in the last 3-4 yrs. While some of them have probably deserved it, a large majority should be sincerely reviewing if they really deserved to be part of the largesse. Have we added value to ourselves professionally? Have we upgraded our skills significantly to justify those increases, and more importantly- to aspire for similar growth in the coming years and scale up our productivity?

The year of 2008 ,to me, will be the recruiter's year.

One should realise over the last decade, there has been a tremendous shift in the power of the job seeker. From the old industrial economy where the employer was the provider of jobs, by virtue of access to machinery and money- we can see the intellectual property driven economy distinctly tilting in favour of the professionals! The recruiter will have to play the devil's advocate and see the right fit for the right role-more than ever, than just gloss over some superficial achievements. The recruiter would also the tricky role of whetting the employers credentials despite being engaged professionally!

Before I sign off the inaugural but somewhat sombre posting, let me point you to a bunch of HOT jobs that we at Options are working on presently. You can be sure there is a lots to cheer about- as there are indeed jobs across levels as several startups and projects are on the anvil.

Happy hunting!! But yes, please do your due diligence before you pick up that next employee or assignment. You might just attain escape velocity with the right call.

PS- whats new? We have just spruced up our website and so I shall be glad to have your comments on the same..please visit here.

I am also excited that the Executive Recruiters Association(ERA) has announced the launch of embarked of the first vocational course -a six month diploma course in recruitment practice and managementon . Will it provide the fillip to the industry like the NIIT courses first introduced two decades ago??