Moneycontrol PRO
UPCOMING EVENT:Attend Traders Carnival Live. 3 days 12 sessions at Rs.1599/-, exclusive for Moneycontrol Pro subscribers. Register now!
you are here: HomeNewsBusiness

As salaries for Indian techies go up, India is no longer a cost game for multinationals: Experts

Technology is no longer a choice but core to business. India, which has a large and scalable talent pool, is at an advantage to tap into this opportunity, attracting the multinationals to the country.

August 20, 2021 / 04:17 PM IST
Representative image

Representative image

With the salaries for technology professionals seeing a sharp increase in the country, for multinationals setting up base in India, it is no longer about cost advantage but about doing mission-critical work, according to industry experts.

Priyaranjan Jha, Managing Director & Country Head, PepsiCo’s GBS in India, Navneet Kapoor, Executive Vice President & CTIO, AP Moller, Maersk, and Sangeeta Gupta, Sr VP & Chief Strategy Officer, NASSCOM spoke at the NASSCOM roundtable discussion on ‘India as a talent destination for global companies, moderated by Moneycontrol on August 10.

“It is no longer a cost game anymore,” says Kapoor of Maersk. Especially at a time when the salaries for technology professionals are increasing, particularly the skilled ones in new-age digital skills. For multinationals, it is more about leveraging the large talent pool in the country, even if they have to pay more, as technology becomes core to the business.

“They (multinationals) are coming here (India) because there is talent available at a scale that is highly skilled and it is hard to find that talent elsewhere in the world. They are willing to pay higher compensation for that talent because it's mission-critical for their transformation, mission-critical for the future,” explained Kapoor.

Technology is no longer a choice but core to the business. India, which has a large and scalable talent pool, is at an advantage to tap into this opportunity, attracting multinationals to the country, even if it means paying more for talents.

 War for talent is reaching a new height or “out of whack” as Kapoor put it, with IT firms, startups, and GCCs vie for the same talent pool. This has resulted in a spike in salary costs, as high as 100 percent for certain skills, making it almost on par with their Silicon Valley counterparts.

 According to experts, salaries for top talents in senior positions are definitely converging with that of Silicon Valley. “Yes, we are (seeing convergence of salaries for the most in-demand skills). So it's going there. But I think we are still a few years away from that,” PepsiCo’s Jha pointed.

As of now, though the salaries have increased in India, there is a 30-40 percent difference at the senior level. At the junior level, there is still a 50-70 percent difference, if not more. If an AI engineer is paid $500,000 in the Silicon Valley, in India AI engineers with similar experience might be $100,000 here. "The difference is there. But five years ago, you may have paid $30000,” Kapoor pointed out.

Over time the huge gap that existed five or 10 years will not be there as technology and now pandemic has given a level playing field. “The best talent will command higher salaries including convergence towards global salaries,” Kapoor added.

“Over time, I see convergence at senior level roles for sure. But I still think the value equation for India is around for a few decades more,” Jha added.

NASSCOM’s Gupta explained that assuming few top-quality talents are paid Silicon Valley salaries, there are also others in the bottom and middle. “So overall my cost differential is not going to be what a Silicon Valley talent or UK talent or Berlin talent is going to be.”

But there should be a change in mindset. “Companies will have to stop thinking about ‘I could hire this XYZ talent at 10 lakh, today I have to pay 25 lakh’.  There is a value to talent and we have to appreciate and be willing to pay for that.” Gupta said.

 According to her, this will inspire a whole new generation of techies to upskill themselves and aspire to get that same salary.

Swathi Moorthy
first published: Aug 20, 2021 04:13 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark