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Labour Costs In India Among The
World's Lowest
According to a new survey by
economic times, labour costs in India are among the
lowest in the world while the highest are in European
countries like Belgium, Sweden and Germany. Employment
costs in India are 2,024 Euros (Rs 1,13,344 approx) a
year, while in Belgium, Sweden and Germany the financial
burden of employing a worker is more than Euro 50,000
(Rs 28,00,000) a year. In Japan and US, annual labour
costs are 45,839 Euros and 33,195 Euros respectively.
The study also revealed that annual labour costs in
France (Euro 45,879) and in the UK were in line with
Japanese costs but almost 40 pct higher than US costs.
Chinese (Euro 13,884) and India labour costs were even
more competitive (Source : Economic times)
Attrition rates in Software
Industry:
Attrition rates, which were
northward-bound, have shown some signs of receding in
the last quarter and they are continuing to do so.
Software companies are sighing with relief - at least
for now.
Wipro has seen its attrition rate
drop from 18% in the second quarter to 12% last quarter,
a 6% drop. Similarly, Satyam has seen its attrition rate
drop from 19% to 15% in the last quarter. Infosys, on
the other hand, has seen a marginal drop of
0.5%.
It is believed that attrition rates
will sink further this quarter. Software companies have
been taking steps to curtail attrition and their
sustained efforts have enabled them to retain
staff.
Salary raises by IT companies seem
to have gone down well with employees. Wipro has raised
offshore salaries by 15-17% in November, while rival
Satyam also raised the salaries of its offshore
employees by 18-20% in October.
Additionally, Wipro offered its
employees a restricted stock option program. Even a
company like TCS, which has seen attrition levels of
below 10%, is offering additional sops. The software
biggie doled out shares to its employees after the IPO.
Moreover, companies like Satyam are taking extra pains
to retain their high fliers and managing with a fair
degree of success.
Another significant factor that has
seen attrition rates drop significantly for these majors
is the slowdown in the rush to join MNCs which were
furiously hiring a while ago. MNC's were offering
software professionals substantially higher packages in
a bid to scale up their Indian operations last year.
Now, salaries that these companies are offering are much
more realistic and closer to what Indian firms can
offer. Also, the charm of working with these MNC brands
is wearing off, as employees are realising that the
nature of work is not very different in these companies,
and this realisation has led to many people returning to
their old firms.
However, companies know that salary
increases are something they can't wish away. For
instance, Infosys has said in its guidance that it
expects salary hikes to the tune of 12-15% in FY06.
Also, the charm of working with these MNC brands is
wearing off, as employees are realising that the nature
of work is not very different in these companies, and
this realisation has led to many people returning to
their old firms.
The picture is not entirely rosy.
There could still be a scarcity of talented middle-level
professionals with good project management skills,
though during the last year, many youngsters are
approaching that level. Firms will be fighting for
talent in areas like package implementation, where the
demand-supply mismatch continues to exist.
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