IT firms to hike entry-level salaries

Mumbai: As the scramble to attract best talent from engineering campuses intensifies, IT firms are seen under pressure to increase the entry-level salaries.

The current salaries offered by various IT firms ranges from Rs 1.8 lakh per annum to about Rs 2.5 lakh for the campus recruits.

Infosys Technologies Ltd has taken the lead in announcing a higher pay packet for campus recruits, which industry analysts feel could become the benchmark for the industry and may force other players to follow suit.

Infosys said on Wednesday that it would pay its entry-level employees about Rs 2.7 lakh per annum effective April 2007.

This is about 12 per cent higher that the current payout of Rs 2.4 lakh per annum.

The company is planning to hire about 25,000 people this financial year and about 60-65 per cent will be campus recruits.

Increased offer

"The market is getting strained. We had to make an increased offer to attract best talent and we could afford to do it," said Mohandas Pai, head of human resources at Infosys.

"Typically, we used to hike the salaries once the campus recruits joined the company. But here we are making it in advance," he said.

Others may follow

Gautam Sinha, CEO of headhunting firm TVA Infotech, said the Infy's move to hike freshers' salary could become the benchmark for the industry.

"One could see the other three to four top players being forced to follow Infy's steps in pegging the entry-level salary at Rs 2.7 lakh," he said.

Sinha said there is a pressure to attract good talent from the top 150-200 engineering colleges.

"With huge targets for recruitment, almost every IT firm is eyeing the same kind of talent and the pressure is similar to that one witnesses at the IIMs," he said.

"Hiring from campuses on a large scale started since 2003 and we are in the third year of such massive recruitment," Sinha said adding the trend was set by Indian tech services firms.

Further, over 1,25,000 engineering graduates were likely to be picked up directly from the campuses this year, he said.

Pratish Krishnan, technology analyst at Emkay Share and Stock Brokers, said the hike in freshers' salary would not have any major impact on Infosys' margins.

However, the other domestic and MNC lead players will be seen following Infosys in increasing salaries for campus recruits, he said.