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BENGALURU: Cognizant‘s off-campus recruitment drive, expected to begin on Wednesday, has sparked a debate and meme fests across social media platforms. The company offered a yearly compensation package of Rs 2.5 lakh or Rs 20,000 a month, which many consider to be a regressive step in the Indian IT services industry.
Indian IT firms typically offer engineering graduates annual salaries in the range of Rs 3.5 lakh to Rs 4 lakh on average.The Rs 2.5 lakh annual salary is a new decadal low for the Indian IT sector, frowned upon by digital natives calibrating their career paths if this is in the offing. In an effort to grow their margins, IT companies are offering lower salaries to entry-level employees. However, the current trend seems to have reached an unprecedented lower level. These salaries are predominantly in roles related to BPM (business process management), testing and infrastucture management services.
Cognizant, in its job posting, said that the Rs 2.5-lakh package is for candidates graduating in the 2024 batch with any 3-year full-time degree programme who are eligible to apply. This is a new low in Indian IT services, which is prevalent in roles in BNS and infrastructure management. Companies usually hire 70% of their fresher requirements from campuses between June and December, and depending on the demand pipeline, they source freshers from the open market, including non-technical graduates who make the cut. The Rs 2.5-lakh annual package has raised concerns about how IT firms, which closely track the cost-of-living index across all geographies, haven’t closely looked at how expenses have risen in India over time. One of the users took to X to share his view, “That’s barely enough to cover a year’s rent in a village and a few packets of Maggi. Cognizant must be running an experiment to see if people are living on chai and hope.”
Its rival Wipro has rolled out the Work Integrated Learning Program 2024, which offers BCA and B.Sc students the opportunity to work with the IT firm while pursuing an M.Tech degree from a premier university. Wipro, in its job posting, has said freshers will get a joining bonus of Rs 75,000 and Rs 15,000 as a stipend for the first year and Rs 488 as ESI insurance coverage. This translates into 2.6 lakh annually for the first year. With no bonus component in the second year, they receive a stipend of Rs 17,000 and ESI coverage of Rs 533 a month, which translates to Rs 2.1 lakh annually. Only in the fourth year do they receive a stipend of Rs 23,000 a month, which translates into an annual package of Rs 2.7 lakh. Wipro has an inbuilt penalty clause which states that trainees are liable to pay Rs 75,000 on a pro-rata basis if they leave the organisation before completing their 5 years of the training agreement. Emails sent to Cognizant and Wipro didn’t elicit a response till the time of going to press.
Krishna Vij, business head of IT staffing at Teamlease Digital, said the compensation benchmark of Rs 3-6 lakh for fresh engineering graduates has remained largely unchanged over the past 8-10 years. “If industry players consider reducing this benchmark to create more employment opportunities, it could lead to significant challenges for new graduates, who already grapple with uncertainty and anxiety about their career prospects. Freshers deserve a fair salary that reflects their skills and contributions, rather than being subjected to a downward trend that could hinder their career growth and aspirations,” she said.
“Years ago, IT services companies offered salaries to freshers in the range of Rs 2.4 lakh per annum. Given the current scenario, some companies are seeing an opportunity to keep their costs low and leverage the supply of fresh talent. However, this can at best work as a short-term strategy,” said Aditya Mishra, CEO of CIEL HR.
Global capablility centres (GCCs) did well, hiring far more than IT services for the first time ever. The industry saw a net addition of 60,000 people in the 2023-24 financial year, taking the total tally to 5.4 million. Nasscom did not break this up, but given that the big IT services companies are seeing a decline in headcount, much of the net addition would be on account of GCCs. In 2022-23, GCCs had added 2.8 lakh employees, taking its talent base to over 1.6 million.
Indian IT firms typically offer engineering graduates annual salaries in the range of Rs 3.5 lakh to Rs 4 lakh on average.The Rs 2.5 lakh annual salary is a new decadal low for the Indian IT sector, frowned upon by digital natives calibrating their career paths if this is in the offing. In an effort to grow their margins, IT companies are offering lower salaries to entry-level employees. However, the current trend seems to have reached an unprecedented lower level. These salaries are predominantly in roles related to BPM (business process management), testing and infrastucture management services.
Cognizant, in its job posting, said that the Rs 2.5-lakh package is for candidates graduating in the 2024 batch with any 3-year full-time degree programme who are eligible to apply. This is a new low in Indian IT services, which is prevalent in roles in BNS and infrastructure management. Companies usually hire 70% of their fresher requirements from campuses between June and December, and depending on the demand pipeline, they source freshers from the open market, including non-technical graduates who make the cut. The Rs 2.5-lakh annual package has raised concerns about how IT firms, which closely track the cost-of-living index across all geographies, haven’t closely looked at how expenses have risen in India over time. One of the users took to X to share his view, “That’s barely enough to cover a year’s rent in a village and a few packets of Maggi. Cognizant must be running an experiment to see if people are living on chai and hope.”
Its rival Wipro has rolled out the Work Integrated Learning Program 2024, which offers BCA and B.Sc students the opportunity to work with the IT firm while pursuing an M.Tech degree from a premier university. Wipro, in its job posting, has said freshers will get a joining bonus of Rs 75,000 and Rs 15,000 as a stipend for the first year and Rs 488 as ESI insurance coverage. This translates into 2.6 lakh annually for the first year. With no bonus component in the second year, they receive a stipend of Rs 17,000 and ESI coverage of Rs 533 a month, which translates to Rs 2.1 lakh annually. Only in the fourth year do they receive a stipend of Rs 23,000 a month, which translates into an annual package of Rs 2.7 lakh. Wipro has an inbuilt penalty clause which states that trainees are liable to pay Rs 75,000 on a pro-rata basis if they leave the organisation before completing their 5 years of the training agreement. Emails sent to Cognizant and Wipro didn’t elicit a response till the time of going to press.
Krishna Vij, business head of IT staffing at Teamlease Digital, said the compensation benchmark of Rs 3-6 lakh for fresh engineering graduates has remained largely unchanged over the past 8-10 years. “If industry players consider reducing this benchmark to create more employment opportunities, it could lead to significant challenges for new graduates, who already grapple with uncertainty and anxiety about their career prospects. Freshers deserve a fair salary that reflects their skills and contributions, rather than being subjected to a downward trend that could hinder their career growth and aspirations,” she said.
“Years ago, IT services companies offered salaries to freshers in the range of Rs 2.4 lakh per annum. Given the current scenario, some companies are seeing an opportunity to keep their costs low and leverage the supply of fresh talent. However, this can at best work as a short-term strategy,” said Aditya Mishra, CEO of CIEL HR.
Global capablility centres (GCCs) did well, hiring far more than IT services for the first time ever. The industry saw a net addition of 60,000 people in the 2023-24 financial year, taking the total tally to 5.4 million. Nasscom did not break this up, but given that the big IT services companies are seeing a decline in headcount, much of the net addition would be on account of GCCs. In 2022-23, GCCs had added 2.8 lakh employees, taking its talent base to over 1.6 million.
