Fresher IT salaries to decline in the upcoming year

Editor - CoolAvenues | June 17,2013 12:09 pm IST

The demand for fresh IT graduates have been robust through the years. But the trend seems to be changing now, as salaries for fresh IT engineers will be under major pressure in the coming years.

According to market experts, fresher salaries of Rs 2.75 lakh to Rs 3.25 lakh will remain unchanged or be lowered over the next few years.

The trend is expected to see a change due to a large number of students graduating from engineering colleges, while the demand has slowed down. IT industry body Nasscom’s estimates show that the number of engineers graduating each year has more than doubled to 8.13 lakh from 2007-08 to 2011-12.

The figures have been continuously increasing year-on-year. From 2010-11 to 2011-12, the number rose by 25% to 31%. During those years, the IT workforce rose by 10% and 9%. Most industry experts expect the workforce growth to slow down further, and the freshers will feel the impact. This is also because of the industry's move towards greater automation in traditional areas of IT, and the greater focus on high-margin businesses and new service lines like consulting, mobility, cloud and analytics.


Surabhi Mathur-Gandhi, senior VP (IT sourcing) in Teamlease Services told TOI, there was up to 45% reduction in fresher hiring in the past two years as IT firms were remodeling business plans. "Hence, entry-level salaries have been rationalized. There is no scope for further reduction; it will remain flat, hovering between Rs 2.5 lakh and Rs 3.5 lakh," she said.


Ravi Shankar, chief people officer in Mindtree, said: "Clients are looking at more and more expertise which the freshers lack. This means a company cannot straightaway hire a fresher for a live project.

The demand for actual talent remains high, as these students scale up the level of expertise of workplace.

Other factors affecting the demand of fresh IT graduates in India includes IT companies expanding to other low-cost locations such as Mexico, China and East Europe. They are recognizing the need to be closer to customers most of whom are in the US and Europe for building closer relationships and to overcome stringent visa regulations.


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