Is Indian IT getting too expensive?

Was going through today’s economic times and found few interesting articles. One of them was –Is Indian IT getting too expensive?
Also got a mail from Mann regarding the same article. So thought of putting up my views.

First it was quoted by SAP, then Apple shut down its Bangalore operations, and day before, Pervasive Software decided to quit – as the news says.

And then comes TOI analysis, where it has compared US salaries with those of Indians and there isn’t much diff. when it comes to experienced professionals of more 10-12 years. Of course, freshers are still the best investments of MNCs and they save a lot on cost front.

I have been witnessing this reform for last 2 years since I have been in this industry and up to much extent, I agree with what is stated. Although, Indian MNCs still adhere to there fixed standards and there aren’t much changes in the salary structures offered to professionals, non-Indian MNCs seem to be offering much higher proposals when it comes to negotiation. I have been witnessing of about 200% increase in salary of professionals when they switch from an Indian MNC to a non-Indian MNC. The thing is not about the expensiveness but about the competency in Indian IT industry. As there are no more, many H1B offerings (just think of 2001), the skilled personnel are preferring to settle down in home country while lowering the margins to their US counterparts. Moreover, there has come considerable economic boom bcoz of which lot and lot of new opportunities are opening for those capable of accepting them. The corps like MS are planning to launch XBOX in Indian market, then M&A among big tycoons are coming into scene and then there is constantly rising NSE after a short term fall.

So the rise in expenses cant be taken as threat to Indian IT industry at all, but can be thought as a positive move in Indian IT era.

Here is the excerpt –

While at the entry level, Indian engineers still provide significant cost savings, the mid and senior management professionals are proving to be very expensive for many. While in the US, a software professional in the mid managerial level (over 5 years experience ) costs around $70,000 (around Rs 31.50 lakh), in India , a manager’s pay packet at Rs 25 lakh is not much lower.

And this difference narrows further as the manager adds years to his career. According to StantonChase International’s senior consultant , G C Jayaprakash, the professionals in the 10-15 years category are giving even bigger worries to hirers. While a techie with 10-15 years’ experience costs around $100,000-150 ,000 (around Rs 45-67 lakh) in the US, he/she is already in the Rs 1 crore bracket in India.

Analysts told that since middle and senior management cadre accounts for 30% of an organisation, MNCs are increasingly finding India an expensive resource base. However, the story even two years ago was pretty different. Companies could hire a CEO for Rs 30-40 lakh while the same professional in the US carried a price tag of $200,000.

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