An early sign emerged on Wednesday that the mega IT acquisition of EDS by old behemoth Hewlett Packard Company (H-P) would bring cheers to techies looking for better pay and prospects amid a US economic slowdown.
The $13.9 billion marriage of the two giants is set to heat up the war for talent in the industry – and that probably means salary gains for competitive software experts.
Mphasis, the software and business process outsourcing (BPO) company that EDS acquired after its nurturing by former Citibank India head Jaithirth ‘Jerry’ Rao said it plans to open a 3,600- seat strong development centre in Chennai.
This means more entry and middle level executives will be recruited at higher remunerations. Mphasis will mainly hire software coders and back-end staff for accounting functions where the industry is facing a huge shortage for talent.
Industry observers are predicting a salary hike of 15 to 17 per cent across-the-board if global IT companies stick to their hiring plans. "We are aggressively recruiting professionals for all our businesses," said Mphasis CEO, Jeya Kumar.
Global IT Majors such as IBM, Accenture and Capgemini together plans to hire around 80,000 people in India by 2010.
Indian companies, however, have so far not been very robust on their outlook on salaries. The salary hikes in the current fiscal year are in the range of 7 to 8 per cent in leading Indian IT companies. That is half the across-the-board raise they got in 2007/08.
"I expected a salary hike of 12 to 15 per cent, but ended up with 9 per cent in 2008-09," said an employee with a Mumbai-based IT company.
According to industry association Nasscom, the IT and allied service business faces a potential shortage of 5 lakh workers by 2010 if efforts are not taken to boot up supply.
To be sure, IBM, Infosys, Wipro and Accenture are actively hiring, but there have been doubts on how far it would go in terms of salaries and scale. The fresh round by Mphasis, comes at a time when IT executives are talking of poorer prospects resulting from fears that outsourcing contracts may slow down in the wake of a slump in the US, the industry’s prime export market.
Says Mumbai-based IT company Mastek’s founder Ashank Desai "Earlier, multinationals were paying higher salaries. But Indian companies started offering better salary packages in recent years."