Salaries in IT/BPO expected to fall down in 2012

February 9, 2012: The Information Technology and BPO industry will be going through tough times this year which will translate into lesser hiring and fall in the salary hikes as compared to the last year. This announcement was made by the National Association of Software and Services Company (NASSCOM).

The Nasscom says that the slowing global economy and the weak signal from across the world is of great concern for the companies and is the main reason for the decline in hiring and salary hike. It notes that companies won’t stop hiring, but will reduce hiring. The actual hiring will be short of the predictions made for this year.

In terms of pay hike, Nasscom says that the hike will fall and will be within a range of 8 to 10% this year. In 2011, it was in the range of 10 to 14%. Leading software companies in India such as Tata Consultancy Services and Infosys have already cautioned about the crisis as result of the economic uncertainty in the West. It is expected that the crisis will lead to decline in demand from these regions which account for 90% of the revenue for the software companies.

It is said that the global and domestic indicators are not encouraging and this has affect the whole of IT sector. There exists a common lack of clarity in the direction of policy and the demand conditions too are uncertain. Most of the economic indicators experienced a dip this year and the clarity which was there in the case of past years has reduced.

Nasscom says that the forecast made them will be reworked in October as the present situation is not encouraging to make a year long forecast.

Som Mittal, President, Nasscom attributes the ongoing election preparation in the United States, Euro Zone crisis and the lack of clear policies in India as reasons for the present uncertain economic conditions. He added that the Information Technology Industry is believed to grow at a rate which will range between 11 to 14%.

The return of the United States economy could result in stronger expectations once the presidential elections are over. The fluctuating exchange rate is another factor that impacts the expectations.

The IT sector expects that the medium term looks favorable, which is supported by increasing opportunities in the areas such as data analytic, cloud services and social media. How ever it is difficult to make a forecast for the whole year.

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