Latest Trends on Compensation in ITES industry

• NASSCOM and Hewitt Associates study highlights some key reward trends that organizations are adopting in the IT and ITES industry in their growth lifecycle.

• Movement of IT- ITES industry to tier II and tier III cities has expanded the talent base, but on the other hand the shift from low-end business processes to higher value knowledge based processes has amplified the challenge of hiring specialized manpower.

• Growing trend: differentiated total rewards practices based on specialized skill and complexity.

• Issues: Attraction and retention of employees• Attrition rates: 2007- 28.9%

2010- 40%

• Performance based pay - Most employees view it as an opportunity to earn more. This is best reflected in the use of long-term incentives and variable pay.

• Also, over the past five years, the percentage of the variable component has been creeping up.

• Compensation movement as per the study has been in the range of 8- 10% on Total Cost to Company.

• Bangalore and NCR reported a 3-6% increment in compensation over the national average.

Current Trends

• Cash heavy compensation: Organizations in this sector are increasingly designing compensation structures, which are tax friendly and allow employees to exercise their choice of benefits through a single flexible allowance.

• Complexity based Compensation: This is gaining popularity. In ITES industry, 66% of the organizations reported a formal policy of differentiating compensation based on process complexity.

INFOSYS

PROFILE• Infosys Limited is a global technology services company

headquartered in Bangalore, India. It is the second largest IT exporter in India with 133,560 employees as of March 2011.

• Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries. The company also provides software products to the banking industry.

• Through Infosys business process outsourcing (BPO), it provides business process management services, such as offsite customer relationship management, finance and accounting, and

administration and sales order processing.

Overview of compensation:

Sr. Software Engineer / Developer / Programmer :• Salary- Rs 327,296 - Rs 706,270 • Bonus- Rs 2,909 - Rs 101,968 • Profit Disbursement- Rs 2,355 - Rs 51,798 • Total Pay- Rs 346649- 751045

• Software Engineer - Rs 263,902 - Rs 430,641 • Systems Engineer, IT - Rs 257,425 - Rs 417,189 • Project Manager, Information Technology (IT)• Rs 684,411 - Rs 1,583,098

Typical benefits and perks:

• Medical benefits• Life insurance/ disability compensation• Health club membership• Paid holidays and vacation• Relocation expenses

Mohandas Pai’s speech excerpt:

• “We believe that the attrition will be lower this quarter and the trend may continue this year. Also we begin to see a trend of moderation in compensation. Companies have given hike in salaries, they have rebalanced their salary structure to ensure people remain with them”.

• Pricing has been tight for many corporations. Except may be Infosys, others have not seen increase in sizing and thus hikes will limit their profitability for them as there has been no revenue realization either.

Views regarding compensation:

• Transparent management structure, open door policy.

• Hardworking, smart and efficient individuals get rewarded. Opportunity to work in horizontal divisions are open.

• Salary compensation is very low. Growth in terms of job designation is identified in long-term year slabs.

- anonymous

IBM is a global technology and innovation company operations in over 170 countries IBMers around the world invent and integrate hardware, software and

services IBM has been present in India since 1992. IBM India's solutions and services span all major industries IBM has been expanding its footprint in India - and has a presence in over

200 cities and towns IBM has been the multinational with the largest number of employees in

India Widely recognised as an employer of choice, IBM holds numerous awards

for its industry-leading employment practices and policies. Products:Systems and servers by processor, Systems and servers by

operating system, Software,Storage, Networking ,Point-of-sale systems ,Semi-conductors

IBM Global Process Servicesnext generation BPO

• IBM Global Services is the world's largest business and technology services provider.

• It has over 190,000 workers across more than 160 countries.• IBM Global Services started in 1991• Global Services has two major divisions: Global Business Services (GBS) and

Global Technology Services (GTS).• IBM Global Process Services offer you innovative options to combine process,

people and technology in outsourced delivery models that create real business value.

• major business process areas.

Customer Relationship Management

Finance and Administration

Human Resources

Procurement and Supply Chain Management

Rewards and benefits

• Cash compensation cash compensation structure that will recognise employee specific skills and business expertise. compensation structure takes different forms to reflect

individual performance levels. • Performance bonus

regular employee will have some portion of annual compensation tied directly to business results.

• Healthcare, well-being and personal benefits

personal benefits such as medical schemes, dental schemes, health screening, wellness programmes, retirements and insurance programmes.

• Additional programmes IBM offers employees various discounts for goods and services - IBM Personal Computer Purchase, Housing Assistance Purchase Plan, Car Purchase Assistance Plan, Child Care Services, Mobile Phone Plans, Fitness Centres, and Educational courses. Also employees and their are eligible to join our many recreational, social and cultural clubs, and events. Best of all, they're not just for you, but for your entire family as well

Pay Components

A. Basic salary : Regular pay/ Annual salaryB. Flexible Benefit Plan:

120% of Basic Salarya) Leave Travel Allowanceb) Medical :- upto 15000 pac) House Rent Allowance :- max 50% of basic

salary pad) Conveyance Allowance - max 800 per monthe) 'Flat' Allowance - remaining FBP

C. Retirals:a) PF - 12% of Basicb) Gratuity

D. Additional HRA: in selected cities as % on Basic salary

E. Performance Bonus F. Insurance