Spiral - vicious/virtuous

Salaries are going crazy in Bangalore. Its the best time to be a freshie/early years employee, and a pretty tough one to be an entrepreneur :) Of course, this is hardly an across the board trend, but you end up competing for the thin slice of the market which the top small MNC outfits and startups are looking at, and you'd want to pay market rates, obviously.

The scary thing is this is getting close to (practically) dollar salaries, and that cannot be easy for guys like Infy and Wipro. I'm sure they would like top flight talent too, with the same apetite for growth, risk as those Google and Amazon and Adobe etc are seeking (not to mention startups), yet cannot afford to pay way above what the average employee makes for the company!

Is this the beginning of the shakeout ? People have been predicting that the salary spiral will render the cost differentials useless, and then its the question of managing a remote team, however good, vs local ones.

The only ways to beat that it
  • have products/development owned completely out of here or such that the interaction needed is low- essentially higher end work
  • serve the domestic market - its got to start being a larger pie.
The whole 'operating at US cost/salary structures in India' cannot be too healthy for any of the parties in the medium term. A year of two of partying, however, in in full swing for a few...

2 comments:

Abhishek Goyal said...

There is a fundamental difference in salary structure of india as compared to US. The salaries for begineers are far too low as compared to middle and top level management. So the salaries at lower level has to normalise. Most companies starts here with a ratio of 3:1 in mind. Starting salaries of engineers in US is generally 60K and by that freshers should get a starting of 9l per annum, whereas the realistic numbers are close to 3l. Whereas in the mid to top level management, 200K is expected in US, which translates to 30l per annum and this is close to what you get at 15 - 20 yrs of experience in india. So this raising salaris in bangalore is mainly a normalization effect and ofcourse demand is raising because of the lack of quality to some extent, but i would factor normalization as the major factor.

sameer said...

Good point.
Just one corollary qn : Why should the Inidan model mimic the US one ? The market (numbers, skills) for freshers here IS very different, after all.