With the industry lifting its two-year freeze on salary hikes and bonus payouts, Indian IT employees are on a high. But this time round, their consumption pattern tells a different story. While the younger techies are again the high spenders, the seniors are enlarging their savings pool.
The country has close to two million IT and ITeS employees, earning an average salary of Rs 6 lakh. With an average 10-12 per cent hike by IT firms, this amounts to about an additional Rs 5,000 a month for an employee. In the case of at least one big IT firm, Infosys, the pay out from the company to employees was as high as Rs 600 crore.
Many high-tech job posting are said to be currently vacant in companies across France, Spain, Germany, Norway, Finland, Sweden, the Czech Republic and Switzerland. Companies will start hiring for these positions once recovery firmly sets in. “But their talent pipeline is dry as they don’t produce much talent. So one important option will be to import talent in technology, financial services, investment banking, consulting, product engineering and R&D. Like music, technology jobs can transcend language bariers (which are high in continental Europe),” said B S Murthy, CEO of recruitment firm HumanCapital.
Consumption pattern Says Mr Bhuwan Gaurav, Head of Marketing, Tanishq. “We do expect a spike from the IT segment – especially around the Akshaya Tritiya time which is considered an auspicious time to buy jewellery and also the largest selling period for jewellers.”
Nirupama V G, MD, Ad Astra, says that the younger employees would spend more on pubbing or entertainment, while the older ones would save more or spend on real estate because they don’t want to be caught napping the next time the slowdown happens.
In fact, when the Sunil Mantri Group launched the Mantri Premero project on Sarjapur Road in Bangalore in January, the company said it was mainly targeting the IT employees because of the proximity of the project to the IT and outsourcing hub.
The company Chairman, Mr Sunil Mantri pointed out at the launch event that the company had even started marketing the project among IT employees before its formal launch. The response he said was very good.
“We expect IT salaries to go up 10-20 per cent in the next few months,” he said, confident that IT salary hikes would as a result improve demand for housing.
But for the seniors, the mantra is to save more. “Most tech employees have almost doubled their monthly investments in SIPs and insurance policies,” says an adviser with RS Consultants, a wealth management consultant, “People, who were investing Rs 1 lakh an annum in endowment policies are now upping it to Rs 2-3 lakh,” she says pointing out that this phenomenon is seen more among the senior level employees whose salaries are upwards of Rs 20 lakh an annum.
The 4-8 year-olds in the industry would spend some amount on clothes and jewellery as they forfeited these indulgences last year.
“They would have more money in June and July when the bonus payouts would happen and some of them would buy white goods or go on a vacation,” says Mr Rishi Das, Chief Executive Officer, CareerNet Consulting, a Bangalore-based recruitment firm.
Arvind Brands and Retail saw a 61 per cent growth in April this year from last year same time. Mr J. Suresh, CEO, Arvind Brand and Retail, says, “The mood was bad earlier, now things are much different. This is one of the highest growth spurts we have seen in recent times. Ticket sizes in April grew 10-20 per cent across our various brands (Arrow, Gant etc) and retail formats.”
It’s difficult to segment how much of this growth came from IT crowd in particular. But considering that Arvind has a huge retail presence in Bangalore and the city being driven by the IT crowd, a significant part of the growth could have come from Bangalore, he points out.