'It is a horror!': Former Nasscom President Kiran Karnik says IT industry freshers are underpaid 

As the Indian IT sector faces high attrition rates and margin pressures, Kiran Karnik, former President of NASSCOM, stresses that freshers in the industry are underpaid as compared to high-level executives and this is an issue the industry needs to address.

Karnik spoke to Business Today on the sidelines of the International Advertising Association Global Summit 2022. He said, “You got to pay your startup (or fresher) employees fairly.” Adding more context to this, he said, “Now, what is fair? Arguably in all contexts, we are a very poor country. Somebody who earns Rs 20,000-Rs 30,000 a month is not too bad if you go by absolute standards but by relative standards, compared to what his or her CEO is getting, it's a horror! ” 

Karnik's comments shed light on the lack of parity between the salaries of freshers and CXO-level executives in the IT sector. For example, HCL Technologies disclosed in its annual report that CEO C Vijaykumar’s annual remuneration is Rs 123 crore. Moreover, as per Infosys’ latest annual report, CEO Salil Parekh takes home Rs 79 crore every year and Wipro’s CEO Thierry Delaporte draws Rs 79.8 crore annually. Tech Mahindra managing director and CEO CP Gurnani's salary was Rs 63.4 crore as per the latest filings.

The industry veteran also highlighted that the IT sector needs to take care of its employees because the fungibility of talent has increased as the markets have become more global. He said, “ We have to understand that talent is fungible. It moves across the world. The market today is global and if you don’t pay them well, they will go elsewhere. Who's the loser? The company.”

The fungibility of talent in the Indian IT sector is materialising itself in the form of the rising attrition rates in top IT companies like Infosys, Wipro, Tech Mahindra, and others. Infosys’ attrition rate stands at 28.4 per cent in the first quarter of the financial year 2022-23. Wipro’s recorded an attrition rate of 23.3 per cent in the same time frame while the attrition rate at Tech Mahindra was 22 per cent.

Similar concerns were raised by Mohandas Pai, former director of Infosys. Pai told Business Today, “The IT industry has been exploiting freshers from the last ten years. There has been no increase in compensation, freshers are being paid the same Rs 3.5 - 3.8 lakh which the companies were paying in 2008-09.”

Also Read: How Indian IT giant Wipro is solving its high attrition problem - BusinessToday

Also Read: Why IT majors Infosys, Wipro, and TCS are scaling back on variable payout? - BusinessToday