Salary Structure Negotiations- Know Your Worth Date:   Friday , December 02, 2005 Do you know what your worth is? Well, no offences intended, but the fact is unless techies know their worth, it’s always a hard bargain unless one is in tune with the market. Since the day IT outsourcing began, India has grown. And has brought pitfalls with it. Salaries have been rising, attrition rates are high and companies find it difficult to retain talent, let alone find new which gives the Silicon Valley of the East even more headaches. iGate Global Services CEO Phaneesh Murthy said, “It’s better for us to handle this issue as soon as possible. Leave alone individual companies, even the industry would be faced with this challenge as it would be difficult to sustain business given such levels of attrition.” As the industry is growing, salary profiles are outpacing the required experience for any particular job leading to increased attrition rates and the rise in the cases of false experience claims. If the Nasscom-McKinsey projections for technology sector are any thing to go by, a potential mismatch in the demand-supply scenario will emerge soon. On the demand side, the business looks good but from the supply side, there will be a mismatch. This is a typical case of killing a goose that lays golden eggs. Its high time engineers demand salaries with maturity and know their worth in the industry before negotiating for higher pay. Now how does one do that? It is important for the techies to know their worth in the technology arena. Techies should always look up at salary surveys. They should ask experts or others in their field; should do an informal survey of people in the profession. They can also enquire about the present salary trends from hiring-staffing and consultancy companies and employment agents. A more tricky way of knowing the salary trend is by calling similar companies directly and asking their salary ranges for the similar job or position. “Before demanding higher salary during an interview, I will look into whether or not I fit into the company’s scheme of things. I have my skill sets, interests, and technical specifications before me to prove my worth,” says Sakthivel Manivannan, Team Lead at a multinational company based in Bangalore. One important point a techie should remember is that companies don’t entertain any question of higher wages unless the demand is backed with work experience. “Salary negotiation is only possible with candidates who have more than 3 years of experience. Companies don’t negotiate below that. Most companies have fixed bands. Large companies with a thousand strong work force will not negotiate,’ says Gautam Sinha, CEO, TVA Infotech, a Bangalore based recruitment firm. The industry thumb rule is number of years of experience plus Rs. 1.5 Lakhs. This means with four years experience at a salary of Rs. 4 Lakhs per annum and the increase could up to Rs. 1.5 Lakhs in a new job, i.e. Rs. 5.5 Lakhs per annum with the new employer. This model breaks down in two instances. One is when you cross eight years of experience and second when you are a specialist and then can demand more. But the biggest mistake techies in India often make is they often quote a higher salary in the new place. They shouldn’t go by hearsay as this will make lose their credibility. “Techies should negotiate with realistic numbers,’ adds Sinha. Research and correct information about the company, where one is seeking a job is the key for salary negotiation. A thorough research of the company background, management, kind of staff and facilities offered, organization brand, learning, and growth opportunities is a must for techie to look forward to before going for an interview. Learn as much as you can about the pay scale of the company that wants to hire you. Find out the industry average, as well. As part of your research, you need to have a clear idea of what your minimum salary expectations are. Do the calculation and decide what your deal-breaker point is. Salary growth during appraisal is dependant on how the company perceives you, but the trick is to make oneself irreplaceable. Besides this, another key factor to have your say during negotiations is to make yourself an asset for the company. “I think if you bring domain knowledge- then you can command a premium, then you are not just bringing your skills, you are bringing industry knowledge,” Sinha adds. “Don’t undersell yourself, do an assessment of your market potential and worth before looking for a change. You need to approach it as a marketing activity; you are marketing your skills after all. Always express an interest and keenness in the job and the company if you really are convinced that that is the place you want to be; organizations do not mind paying a little extra to those who are keen on working with them,” says Aravind Dahiya of QAI India, a New Delhi based consultant. One issue that Indian techies are not concerned about is variable pay this is linked to their performance. “The main thing one should be actually cautious about is the variable pay- they should realize, the variable pay is also part of their bank balance which is performance oriented. That thinking is yet to get into minds of average techie. They take variable pay negatively. We need to have that component in the salaries because it improves the performance of the individual. It keeps them in focus and target,” says Rachna Patel, Manager - HR Operations, Global Delivery Center, Logica CMG, Bangalore. Techies should not quote a figure that would reduce the whole discussion to money. Instead negotiate in terms of your worth, experience and the skills you bring to the table. Any company recruiting newly has three stages of recruiting- the first is when they look at budget. Usually most companies in the budget stage filter out people who do not fall into their budget level, as they look at spending as little as possible. The next stage is when they want to save money but still see the person as important and is willing to negotiate. The third stage is when companies take an objective look at the selected employee and sees the person not as a liability but as a money-saving asset and makes an offer in line with the prospective employee’s expectations. Besides salary another area of concern for a techie is the tax. “ We are a law abiding company following the IT department rules strictly. However we have flexible plans linked to the techies level that helps them take maximum amount home,” says Patel. It is at these times the techies should take a call on what is their worth so that they go a long way in career.