Freshers’ salaries haven’t moved much over the years at IT companies – we probably now know why.
Former Infosys CFO and Board Member T Mohandas Pai has said that IT companies colluded to keep fresher’s salaries low. “Indian IT is not paying its freshers well. And in fact, big companies are coming together talking to each other not to increase their salary,” he told PTI.
These are sensational claims – the Indian IT scene is dominated by a few big players including Infosys, TCS, Wipro and Capgemini among others. Together, these companies hire hundreds of thousands of graduates from engineering colleges. Were they to collectively agree to offer lower salaries to fresh graduates, students would have no choice but to accept the lower salaries, as these companies make the bulk of the job offers.
And Pai says this is a calculated move. “They are not raising (salaries) because there is surplus capacity. People are desperate for jobs,” he adds.
Indian IT freshers are currently paid salaries in the region of Rs. 25,000 – Rs. 35,000 when they first join. This number has stayed roughly constant over the years, and salaries weren’t all that different as long as two decades ago – a fresher at an IT company in the early 2000s could’ve expected to earn between Rs. 15-24,000 a month. IT sector starting salaries, thus, haven’t even kept pace with inflation.
Pai lamented this deliberate plan to keep salaries low , saying that it kept away good talent. “It’s not a good sign for the Indian IT industry. They must break away. That too big services companies. Services companies talk to each other, not a good sign, they must break away from this,” he said.