Indians to get a big
raise By Siddharth Srivastava
NEW DELHI - Indian workers will pocket the
world's highest-percentage salary increases in
2007, according to an international survey, thanks
to a severe manpower shortage combined with strong
economic growth.
A spokesman for ECA
International, which surveyed 45 countries, said:
"Indian workers are set to receive the highest
raises, with firms forecasting annual salary hikes
of 12%, resulting in a real wage increase of 7%,
once inflation has been taken into consideration."
Wage rises in Hong Kong are forecast at
1.5%, while those in
Japan,
Taiwan, South Korea and Malaysia are likely to be
between 2% and 3.5%.
Indonesians, along
with mainland Chinese, are expected to record a
real wage increase of about 6%, while the
Philippines and Thailand, with a hike of 4% each,
come in at fourth and fifth respectively.
Vietnamese managers are expected to
receive the lowest real wage increases in Asia,
with high inflation canceling out a sizable salary
increase, the survey said.
The talent
shortage in many Asian economies is most evident
at senior management levels, where the most
significant salary increases are occurring,
leading to a widening gap between junior and
senior management levels, the survey said.
The salary hikes in India and China at all
management levels are exceeding increases in more
developed Asian economies, such as Singapore and
Japan.
"While one does not expect senior
salary levels to be in line with more mature
economies in Asia within the next couple of years,
the fast growth of salary levels in the rapidly
developing markets in Asia presents a huge
challenge to human resources," ECA International
general manager Lee Quane said.
ECA, the
world's largest membership organization for
international human-resources professionals,
establishes actual and predicted salary hikes in
local markets around the world, and multinationals
use the survey to benchmark future wage hikes.
The ECA report follows similar
assessments. According to the 2006 Salary Guide
issued by Kelly Services India, the country has
the highest average salary increase at 13.9 %,
with employees in the information-technology (IT)
industry receiving the highest increase across all
five groups surveyed at 17.9%. Earlier, surveys by
Hewitt Associates and Mercer Human Resource
Consulting on projected salary increases in the
Asia-Pacific region found that India came out on
top.
In India, sectors such as IT,
manufacturing, banking and financial services,
infrastructure, human resources, marketing, retail
and hospitality are likely to see the biggest
raises.
Indeed, an acute manpower shortage
has resulted in a peculiar situation of unrelated
sectors competing with one another. For example,
software giant Infosys chief Nandan Nilekani
recently said the IT industry is facing tough
recruitment competition from the financial
services sector.
Nilekarni said that the
two sectors are driving up the demand for
entry-level people, though IT continues to hire
the largest number of new employees. "Right now,
the retail industry is hiring, but they are not
able to get employees," Nilekani said.
It
is expected that the IT industry will hire about
400,000 people this year, while financial services
will need 75,000-100,000 new hires.
"With
the industries competing for the best talent,
financial services could offer a slightly higher
wage to grab them,'' Nilekani said.
The
salary hikes are in the wake of a severe manpower
shortage. The National Association of Software and
Services Companies (NASSCOM), in its study with
management consultancy firm McKinsey, has said
that only 25% of technical graduates and 10-15% of
general graduates are suitable for employment in
offshore IT/business processing and outsourcing
(BPO) industries.
According to NASSCOM,
more than 3 million students graduate from Indian
colleges every year and the country produces
400,000 engineers annually, but "of this only a
very small percentage is employable".
The
IT/BPO sector in India is poised to grow at an
annual rate of more than 25%. Currently, India
accounts for 28% of IT/BPO talent among 25
low-cost countries, but NASSCOM projections
indicate a potential shortfall of nearly 500,000
qualified employees.
One strategy has been
firms setting up institutes related to their core
area, for internal hiring and also to create a
talent pool for the entire industry.
Thus
Gujarat State Petroleum Corp's Institute of
Petroleum Technology and Petroleum Management is
being set up; ICICI Bank-NIIT's Institute of
Finance, Insurance and Banking opened recently;
and telecom company Bharti has started a school of
telecommunication and management in collaboration
with Indian Institute of Technology-Delhi.
Motorola University in the US is tying up
with various vendors in India to provide
specialized training.
Market estimates say
the Indian IT industry needs to spend up to US$3
billion in training an additional 1 million
professionals over the next three years to make
them employable.
The IT industry is trying
to work with the education system in India.
Software major Infosys recently announced plans to
invest $176 million on expanding its global
education center in Mysore over the next year. The
firm plans to set up a new 9,000-seat training
facility, which would enable training of 13,500
individuals in a single sitting.
To keep
tabs on quality of manpower, as well as check
growing instances of data theft, NASSCOM has
announced the national roll-out of its assessment
and certification program, the NASSCOM Assessment
of Competence. The NAC seeks to fulfill two aims:
checking technology-related crime and ensuring
there is a sufficient pool of talent.
Wipro Technologies has the capacity to
train 7,000 people a day. TCS has training
facilities at Thiruvananthapuram and Hyderabad in
addition to smaller training centers in each of
its offices across the country. It already has 170
regular training faculty and other visiting
trainers.
Many BPOs are tying up with
academic institutions. Hewlett-Packard has tied up
with Jadavpur University to exchange knowledge in
mobile computing, while Cisco, the networking
major, has set up more than 130 networking
academies across 20 states and union territories
in India, training more than 6,000 students.
There is considerable debate in India over
allowing foreign higher education institutions to
play a greater role.
The Commerce Ministry
has been arguing in favor allowing foreign
universities, such as Harvard, Yale, the
Massachusetts Institute of Technology, Stanford
and the London School of Economics, to open
campuses here. But the left-wing parties, as well
as sections of the government, are opposing the
move.
Meanwhile, the appetite for trained
talent is only going to grow.
Siddharth Srivastava is a New
Delhi-based journalist.
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2007 Asia Times Online Ltd. All rights reserved.
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