IT services provider MindTree Consulting is restructuring salary offers to its trainees over an 18-month period by staggering payments and linking these to tenure. The plan will be applicable to 250 freshers who joined the company in March this year. Another 250 people are expected to join in October this year.
To the batch that joined this March (and which received the offers in 2008), the company will pay 75 per cent of the monthly wages promised in its offer letters over the first seven months, 85 per cent over the next six months and the balance over the last five months.
MindTree currently offers trainees an annual salary of Rs 3.2 lakh (roughly Rs 26,700 per month) or Rs 4.8 lakh for 18 months. Back-of-the-envelope calculations suggest the restructuring would now imply that the trainees get around Rs 20,000 for the first seven months (Rs 1.4 lakh in total). This increases to around Rs 22,700 per month for the next six months (around Rs 1.36 lakh), and around Rs 40,800 for the remaining five months (around Rs 2.04 lakh). The total works out to Rs 4.8 lakh over 18 months (which is equal to Mindtree’s initial offer of Rs 3.2 lakh a year).
“The idea is to start them off at a lower monthly salary and increase it progressively over an 18-month period till it matches the initial offer,” said MindTree’s senior vice-president (human resources), Puneet Jaitley.
He added that 95 per cent of the freshers had accepted the restructuring option and come on board. “We are now drastically reducing costs incurred by the company during the training period. If they complete 18 months, their salaries will increase progressively during the period,” Jaitley said.
He maintained that the company’s action did not amount to a salary cut against the promised offers. “Because of the worsening economic situation, all we have done is give our trainees an option to restructure their salaries,” he said.
MindTree first considered the salary restructuring plan for entry-level employees in October last year because the deteriorating global economy compelled the company to “look at things differently”.
Jaitley did not indicate the number of trainees currently on MindTree’s rolls who come under the wage restructuring plan. As of March 31 this year, Bangalore-based MindTree employed 7,900 people across six strategic business units.
Meanwhile, on the assumption that customer demand will not pick up soon in key customer geographies like north America and Europe, MindTree has increased the training period for entry-level staff from three to six months. Industry peer Infosys Technologies has increased the number of training days from four to seven months. Wipro is also learnt to have extended its training period.
