ENERGY MAY SEE HIGHEST HIKE IN AVERAGE SALARY: MAFOI

Mumbai, March 10, 2008
The Economic Times  Deccan Chronicle  The Asian Age  

The energy sector may witness the highest increase in average salary this year, beating the IT segment and others, and attract scores of youngsters, says a leading consultancy agency.

Energy at an expected 16.8 per cent increase in average salary is followed by real estate and construction at 16.1 per cent and IT at 15.7 per cent jump, consultant agency MaFoi said in its employment survey.

Trade and hospitality sectors are going to see a jump of 14.4 per cent and 14.2 per cent, respectively, MaFoi said.

Textile and garments, apparel, paper and publishing, printing, mining and extraction and manufacture of rubber and plastic would witness the lowest average salary hike, it said adding that these sectors would attract a hike of 11-12 per cent only.

About 32.9 per cent of the freshers joined the energy sector, the survey said while IT is expected to hire 26.5 per cent.

However, real estate and construction prefer experienced hands. More than 78.1 per cent in this sector are experienced hands, MaFoi study said.

Hospitality sector also attracts youngsters as about 33 per cent of the workforce would be freshers this year, the study said.

WHY DO CEOS SWITCH JOBS?

Hindustan Times

A handsome salary is always the deciding factor for any person to keep his job and also to change it. At the same time, that something extra is what makes working a pleasure and a CEO is not averse to it. Here are a few reasons that force or lure a CEO into changing his or her workplace.

The challenge counts.

“Perks at the CEO level are more or less comparable and not really a deciding factor for changing the job. But I am yet to meet a CEO who does not move for a greater challenge,” says Rachna Saksena, practice head – ITeS & HR research – Ma Foi Global Search Services Limited. ‘Challenging’, she adds, is how you define the word – the ‘risk element’ is directly proportionate with the returns. In addition to challenge, the company’s brand pull, its balance sheet, future plans and credentials of the executive board also count.

Work satisfaction is another important component for the CEO. He/she could get bored of his/her job profile and yearn for new challenges in about 4-5 years, on an average. When the job ceases to be challenging and interesting, the CEO will look around for something else.

Opting for variety

“One of the reasons why CEOs seeks job change is variety and enrichment in experience,” says James Agrawal, head, BTI Consultants India. There are many successful CEOs who have joined smaller and young /start-up organisations so that could build the company ground up and personally recruit their core leadership group.

There are examples of CEOs who have turned down lucrative global opportunities to work in a challenging and high growth environment in India and others who have joined sunrise sectors such as real estate and retail so that they can apply their past experience to manage new challenges. So variety often goes hand in hand with challenge.

“When you are a CEO of a company, your perks become secondary. It’s what you have contributed to the firm and the growth chart, that becomes more important,” says Datta Shiraz, head, marketing, India region, Cincom.

Perks are important

Though perks are not the only deciding factor for a CEO, they should not be neglected either. Perks are the ‘interest’ that the CEO gets from his job. “Super perks are among the major reasons for many CEOs to rethink about their job,” says Shiraz. A lot of firms do offer what would, at a glance, look outrageous as perks to their CEOs.

These perks may not even be direct payments to the CEO; they could well be benefits offered to his family – paid-for family holidays, club memberships, all medical expenses paid for self, family and dependent parents, two company maintained cars, scholarships for children’s study abroad, even fully furnished accommodation and company-maintained household staff, for example.

 

 

IT FIRMS FACE RETENTION CLAUSE

Mini Joseph Tejaswi, Bangalore
The Times of India

Attrition is not an internal issue any more. It’s, in fact, inflicting insomnia among overseas clients who offshore critical operations to Indian vendors.

Clients are not willing to accept excuses about project delays on account of attrition. Nor are they willing to foot financial losses resulting from delayed delivery.

So clients are now introducing a ‘retention clause’ in contracts. This will make enterprises responsible for retaining people/teams working on the client’s projects. Failing that, they would attract a financial penalty. With this, the rampant practice of internal-poaching - shifting people from a dedicated project to unrelated projects - will also come under the scanner.

"Attrition can be costly. It can break down the entire delivery schedule. Clients today are unwilling to absorb any losses arising out of people exiting at the providers’ end. Hence, they are increasingly dictating terms with providers to include a retention clause in the contract. It’s fast becoming an industry norm," said Avinash Vashishta, MD, Tholons, an offshore advisory.

Pari Natarajan, CEO, Xinnov, an offshore advisory firm, said global customers are increasingly concerned about the productivity of their offshoring partner and have realized that employee turnover is one of the key hindrances to productivity in India.

Clients make significant investments to put teams and processes in place at their providers’ premises. "Under the retention contract, providers are obligated to retain crucial, customer-facing staff including database administrators, project managers, programme managers or team leads," said Sabyasachi Satpathy, senior director, neoIT, a corporate globalization advisory.

Normally, clients and providers agree on a minimum retention of 85% of those on a project for 18 to 24 months. Any break in this could attract a financial penalty amounting to 10% of the monthly invoice. Under this clause, the providers are also obligated to keep their clients posted on any possible exit of anyone in the team and what would be the alternative arrangements.

 

 

PATNI'S SEARCH FOR CEO MAKES NO HEADWAY

N Shivapriya, Mumbai
The Economic Times (Delhi edition)

Patni Computer Systems’ search for a new chief executive officer is proving to be a long-drawn and complex affair. Sources said even after several months of hunt, the company has not zeroed in on a professional.

Apart from the inherent challenges involved in finding a candidate capable of managing a listed firm and delivering on a quarterly basis, the process is taking longer because of concern among potential candidates over the impact of a possible change in ownership, a source said. A dispute between Narendra Patni, the CEO, and his two brothers over their stake in the company to financial investors made headlines last year. Ashok and Gajendra Patni were also keen on bringing in a new CEO to revive the company’s fortunes that has lagged peers in recent years.

“Patni has a very conservative outlook. There are a lot of old warhorses in the company. So anybody who comes in should not only be able to address the sales side but also be make changes on the delivery side. Potential candidates would think twice before taking it on, because the risks are higher. If they are not able to make a success of it, their career graph will be affected adversely even in terms of future assignments,” said an executive with a placement firm.

The possibility of an ownership change at a future date may mean that the new CEO’s tenure could be short-lived, giving him less time to prove himself. “Because of this, there is a feeling that the new CEO will also only be ‘cut and paste’ CEO,” said another executive. A mail sent to Narendra Patni’s office failed to get any response. The other directors on the Patni board also refused to comment.

Narendra Patni’s term as CEO comes to an end in December 2008, and the apprehension is that a stake sale could go through after that. Apart from Ashok and Gajendra Patni who hold about 14 percent each, General Atlantic, which holds about 16 percent in the firm, is also keen on exiting. The new investor coming into the company would be the single largest shareholder and could prefer its own candidate for CEO.

Competition for leadership talent is quite acute among software companies. “As much as the IT sector is facing a slowdown, there is still a shortage in the lateral management. So finding a good quality CEO is difficult when there are others waiting in line to get a good guy,” said an IT analyst, who said Patni’s valuation had suffered as a result. Sources in the placement industry also said the company had earlier gone about the CEO search using more than one firm, before it finally gave the mandate to a one reputed firm on an exclusive basis.

Realising the importance of management continuity, some large software firms have also started grooming younger executives for top positions in recent times. Tata Consultancy Services announced a restructuring exercise that decentralises authority and brings global operations under its COO N Chandrasekaran. Cognizant Technology Solutions has appointed 38-year-old Francisco D’Souza as CEO. “Succession plans have become more important now than ever before because there is market pressure and there is pressure from the organisational side as well. The existing management has completed a full cycle — new blood needs to come in,” said R Suresh, managing director of executive search firm Stanton Chase.

 

AVG SALARIES FOR IT ENGINEERS DOWN 3%: ZINNOV

Mumbai
Business Standard

The average salaries for the engineering positions across product companies in India have come down by 3%. Bangalore continues to be the highest in its pay scale followed by Chennai, Pune and NCR, says the ‘Compensation and Benefit Study 2008 report’ by Zinnov - a management consulting firm.

In order to control costs, the reason for the dip in hiring was attributed to increased hiring at the junior level. "About 40% of the average talent pool among the participating companies are between 0-4 year experience", added Shamim T, Director Human Capital Consulting, Zinnov.

While the dip in average salary could be an indication of salary levels stabilising, organisations are also doing their bit to keep the levels under control. They are offering other cash based incentives such as retention bonus as well variable pay contingent on many factors.

The report noted that the expected average increment in 2008 is about 15%, with few organisations planning to give almost 30% hike to its top performers and rare skill holders.

In terms of states, Pune witnessed salary increase of almost 15-20% in the average salary since last year. This increase could be attributed to the growing demand for talent pool in the city due to a number of companies setting up its operations in Pune. The average increment in 2007 was found to be around 14%.

 

CAMPUS RECRUITMENT TO FALL BY 38 PERCENT

Mumbai
The Hindu Business Line | The Financial Express | The Economic Times | The Telegraph | The Times of India | The Indian Express | Business Standard | The Hindu | 

The campus recruitment by the IT and ITeS companies is likely to fall by about 38 percent this year.

“The problem will be seen in the next six months,” said K. Pandia Rajan, Managing Director of Ma Foi Management Consultants, a player in the human resource space. “We have seen companies staggering the joining dates by 2 to 3 months, batch sizes have come down ,” he said at the release of Ma Foi Employment Survey 2008.

Also, as the demand and supply gap increases with the supply on the rise and a fall in demand, campus hiring could be less than 38 percent, he said.

Elaborating the reason for the trend, Rajan said a depreciating dollar and a possible slowdown in the US economy are the key reasons for measured hiring by the companies.

The sector is also seeing some “downsizing” as “at least two large IT companies have downsized their staff strength,” he said, without naming the companies.

However, he added that with a slowdown in hiring, the attrition rates are also expected to come down by five to six percent.

The Ma Foi 2008 survey expects an addition of about 74,693 jobs, a rise of 7.31 percent over last year in the IT sector while ITeS sector will add 56,221 jobs, a rise of 7.2 percent.

The survey was conducted across 22 key sectors like manufacturing, real estate and construction, hospitality, transport, communications and others.

In terms of percentage of growth in recruitments, the health sector shows the highest growth at 8.9 percent, followed by IT at 7.3 percent, ITeS at 7.2 percent and hospitality at 6.9 percent.

According to the survey, while the hospitality sector would generate the maximum number of employment in 2008 over last year with over 4.26 lakh jobs, education sector will have highest number of jobs in 2008 (1.42 crore).

Demand for fresh recruits is above 30 percent in hospitality followed by sectors such as energy generation and supply sector, ITeS, and mining and extraction.

 

MICROSOFT, INFOSYS 'INCUBATING TALENT' TO BEAT ATTRITION BLUES

Vishwanath Kulkarni, Bangalore
Mint

Faced with the challenge of finding workers with specialist skills and high levels of attrition, technology firms such as Microsoft Corp.’s India unit and local software company Infosys Technologies Ltd have started what they call efforts at “incubating talent” on an experimental basis. Microsoft Global Technical Support Center (GTSC) has allowed about 65 engineering students — studying in their seventh and eighth semesters at local engineering colleges — to carry out projects on weekends at its Bangalore facility for a year, during which they will be mentored and trained before working on projects.

“Attracting suitable talent with a product and engineering mindset is a big challenge,” said Sashi Kumar, general manager, Microsoft GTSC.

The company, which mainly used to hire experienced hands from other technology firms, has started recruiting from campuses in recent years. Still, not assured of sizeable numbers, Microsoft thought about incubating talent as a new way of finding workers with the right skills.

“The incubation programme is a good way to build exposure, depth of thinking and instill engineering bent of mind,” Kumar said.

People participating in the programme are not tied to a Microsoft job and can leave for another job at the end of the incubation programme, he said and added that once formalized, the programme will be replicated at other Microsoft support centres.

India’s second largest software services firm Infosys has also started a pilot project where about 250 final-year engineering students are going through a programme to understand technology.

The engineering students have been chosen from colleges that allow them to go out for final-year projects that run for three-four months, said Srikantan Moorthy, vice-president and head of education and research at Infosys.

Microsoft aims to bring down the training duration for new recruits by as much as half through this programme, said K. Srikanthan, a group manager with the firm. Campus recruits go through 8-10 months of training at Microsoft GTSC. He said the present batch of 65 students was selected from 4,500 candidates from 30 colleges in and around Bangalore.

Started with 40 people in 2003, Microsoft GTSC in Bangalore is now the largest support site for the software giant and employs some 1,200 engineers, who help customers install and run the company’s software in the US, Canada, Western Europe, Australia, New Zealand and more recently in India. The company has some 1,000 contracted workers at vendors, including Wipro Ltd, handling high volume and less complex support services.

Live projects help students understand technology better and at the same time reduce training costs for firms, said Nirupama V.G., managing director, Ad Astra Consultants Pvt. Ltd, a Bangalore-based HR consultancy firm. “For companies such as Microsoft, it’s a good way to evangelize their products,” she added.

K. Raghu contributed to this story