Compensation: How much is enough?

Wednesday, October 26, 2005



You hear people cribbing about their salaries (compensation and benefits) all the time. The rat race just doesn't end. There is always some Foo or Moo earning more than you. These are good times for India and its time we accept it. Thanks to Offshoring and outsourcing. There is a huge market for services. Though McKinsey reports indicate that there is a far greater supply than demand, I have changed three jobs in the past 6 months. (Ok! Don't raise your eyebrows now. We'll come to that later).

Probably there is a shortage in quality supply - supply of talent. In line with my principle of anonymity, these are fictitious names to the organizations I have worked with. Compensation increases have been to the tune of 50%-70%. I was shocked (in a good way ofcourse). It was time for some reality check to see if one is really worth so much.
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So I did a little bit of survey to find out if the compensation packages are really skyrocketing and is this a trend. What got me thinking was if Bangalore was going to pay such high compensation, then we would soon lose out on the cost advantage as rightly indicated by McKinsey's report. On an average, one can expect a raise of conservative 25-30%

On switching jobs for generalized expertise such as specializing in Java or .NET. For niche markets like product or domain expertise, the compensation increase is quite high. I have seen many people accepting offers that give a 60% increase and then renegotiating for a 100% increase. I mean seriously...
Honestly, a demand for 15L with 4 years sent my temper flaring! So how much is enough?

On to my next question on changing jobs. There are some instances that I've known where people switch jobs every year to get a raise. 7 years, 7 jobs. Westerners are known to dread Indians for this. How much time should you spend on your current one before switching if you don't have a valid reason? I won't go into the definitions of valid now. I was told that too many jobs in too short a time makes a resume bad. The recruiters know it and the hiring companies know it. So why do they hire you then despite knowing you won't stay for long looking at your history. Despite that you are offered a handsome package. Why? I don't have concrete answers. Is it because attrition is accepted, is it because there is a lack of talent or is it because there is so much of demand?

Your opinions?

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