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After almost seven years, information technology (IT) sector bellwethers such as Tata Consultancy Services (TCS) and Cognizant have decided to increase entry-level pay.
According to several engineering institutes from Tamil Nadu, the annual salaries for engineering students during the coming placement season will see a rise of at least five to 10 per cent, from Rs 3–3.33 lakh to Rs 3.33-3.5 lakh. IT product companies have increased salaries by 20-25 per cent, taking the annual package to Rs 5 lakh against Rs 4 lakh last year. And, start-ups are paying a yearly starting salary of Rs 4.5 lakh.
“IT product companies and start-ups have surpassed IT companies in annual salaries. So far, TCS and Cognizant have increased salaries and other IT companies are expected to follow,” said S Ganapathy, dean, placements, SRM University.
SRM will place 4,500 students this year into jobs, the same as last year.
Institutes said Infosys and Accenture were expected to follow TCS and Cognizant. According to sources at TCS, the salary rise will be 10-12 per cent. Cognizant has confirmed that entry-level compensation has gone up to Rs 335,005 annually from Rs 301,500, a rise of 11 per cent.
Without divulging details, TCS said, “We constantly review the market and based on feedback received, we revise our compensation to align with the market demand.”
The factors given for the rise, after close to seven years, include the increase in cost of living, peer pressure in the IT sevtor, new-age companies offering better packages and that recruitment from other core sectors is expected to be better this year.
Sekar Viswanathan, vice-president, Vellore Institute of Technology (VIT), one of the largest in the country, confirmed that IT majors had raised entry pay.
He said peer pressure was at work, with start-ups offering a better package at Rs 5-6 lakh a year and other core sectors raising their hiring numbers. “They (IT companies) don’t want salary to be a factor for students to reject them.”
This year, says Viswanathan, more companies are visiting the campus and hiring more. Companies have already blocked dates at VIT. Last year, 325 companies visited and 3,619 students were placed. This year, they expect 400 companies to visit for 4,300 students.
A placement officer from one of the top five institutes said the rise has been long-pending. “The last hike in the salary levels for campus recruitment by the IT majors was in 2007 or 2008, when it was raised from Rs 2.5-2.7 lakh per annum to around Rs 3 lakh,” he added.
Start-ups, he said, might not be a major threat for the IT majors, as they might not be able to hire in large numbers. However, the latter might lose some of the good candidates, as entry pay at start-ups are Rs 5 lakh or even Rs 10 lakh annually and a meagre 10-11 per cent increase from Rs 3 lakh yearly would not be sufficient. For instance, new-age company PayPal had offered Rs 16 lakh, now revised to Rs 20 lakh.
Madhu Murthy, president, Talentsprint, a skill development and training company based in Hyderabad, said the wage rise in campus recruitment could be mainly to adjust the increase in cost of living. “It is a meagre adjustment and is not going to make much of a change,” he said.
Wipro has been offering around Rs 3 lakh a year for a graduate and is expected to raise this to Rs 3.33 lakh; for a postgraduate, it has been offering Rs 3-3.25 lakh and this is expected to go up to Rs 3.33-3.5 lakh. Infosys’ offer has been around Rs 3.3 lakh for a graduate and Rs 3.5 lakh for a postgraduate; Accenture’s is around Rs 3.15 lakh.
HOPE FOR FRESHERS
2007 or 2008, when it was raised from Rs 2.5-2.7 lakh per annum to around Rs 3 lakh
TCS
The salary rise will be 10-12 per cent
Cognizant
Entry-level compensation has gone up to Rs 335,005 annually from Rs 301,500, a rise of 11 per cent
Wipro
It was Rs 3 lakh a year for a graduate and is expected to raise this to Rs 3.33 lakh; for a postgraduate, it was Rs 3-3.25 lakh and is expected to go up to Rs 3.33-3.5 lakh
Infosys
It was Rs 3.3 lakh for a graduate and Rs 3.5 lakh for a postgraduate
Start-ups are Rs 5 lakh or even Rs 10 lakh annually
