S/W salaries rise 19%, avg salary Rs 6.2 lakh p.a

* Top 3 paymasters are software R&D firms - Cadence, Sun Micro, Honeywell Tech

* 7 MNCs among Top 10 paymasters

* Hikes don't always lead to higher salary satisfaction

* Industry average grew 11% in 2007 to touch Rs 6.2 lakh per annum

* 70% work force has less than 5 years work experience

* 40% professionals polled got their degrees from Southern India

*Engineering graduates, post-graduates and masters in computer applications constitute about 70% of the professional workforce

* Average age of the professionals has increased marginally to 28.1 years, from 27.5 years
 
While typical Indian software professionals got an average salary increase of 18.3% in 2006, they received an 18.7% hike this year, according to the latest survey by IDC India.

The average salary increase is considered significant considering that the software talent pool of the top 50 companies has grown sharply - at nearly 30-40% annually over the last three years. It is generally expected, notes the survey, that with the on-campus recruitment of thousands of freshers, the average salaries should go down.

The survey reveals that multinational corporations (MNCs) pay higher salaries, and among MNCs, those engaged in R&D pay the highest. Not surprisingly, the top 3 paymasters in the industry - Cadence, Sun Microsystems, Honeywell Technologies - were all engaged in R&D. Seven out of the top 10 in the list includs MNCs like IBM, Capgemini and CSC.

While Cadence and Sun are the top paymasters for all employees with up to 10 years of experience, Infosys is more generous with the salaries of its senior and experienced employees. Infosys is one of the best paymasters for professionals between 10-15 years and more than 15 years of experience.

Going by the salary levels, the study says that it makes sense for fresh engineers to embark on a career in a software R&D firm. For the more experienced professionals, it adds that the salary levels at Infosys match with the best.

The survey also points out that there is virtually no correlation between 'salary levels' and 'satisfaction with salary'. While TCS employees rank their company at No. 4 in terms of 'satisfaction with salary' it is ranked at No. 13 in terms of salary. Infosys is ranked at No 12 in terms of salary but is ranked No. 28 in terms of 'satisfaction with salary'. 

Commenting on the survey results, Dataquest (for whom the IDC survey was done) Chief Editor Prasanto Kumar Roy says: "We knew that a high salary didn't always mean high satisfaction, but the sheer extent of disconnect is amazing. There was less than 8% correlation between salary and satisfaction with salary." 

The report points out that Indian tech companies must find a way out of this ever-increasing wage rise as rupee appreciation squeezes their margins even further. The not-so-simple answer is, of course, to improve employee satisfaction. Some companies are also trying out a six-day week, selectively, to offset the impact of rupee appreciation on their margins by increasing billable hours. Many more companies, including some MNC captives, may also do away with a five-day week that is a strong part of their culture to bring in competitiveness on the HR front.

Moreover, India has a young workforce, the survey notes. Professionals with less than 5 years work experience today form 70% of the 1.6 million strong Indian software work force. Just 1 out of 5 professionals has between 5 to 10 years of experience and less than 1 in 10 professionals has over 10 years of experience.