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While the gap is likely to drop by up to 21 per cent in 2008 from the levels seen in 2006, it is still high enough to keep India's competitive edge as a low-cost market, says a white paper by leading executive search firm Manpower.
According to data compiled by Manpower, the sector's staff level salaries were as much as 86 per cent higher in the US compared to India in 2006. However, this gap declined to 82 per cent in 2007 and is expected to decline further to 78 per cent in 2008.
In executive level salaries, the gap dropped from 68 per cent in 2006 to 60 per cent in 2007 and could further decline to 52 per cent this year.
However, the steepest decline of 21 per cent is likely to be seen in the middle manager level, where the US salaries used to be 69 per cent higher in 2006, but would be only 48 per cent higher than India in 2008. This difference stood at 57 per cent in 2007.
While noting that salary is the biggest cost component, accounting for 45 per cent of IT companies and 40 per cent of BPO costs, the white paper said that a close comparison of Indian and US salaries indicates a narrowing gap in cost arbitrage during 2006 to 2008.
Concerns have also been raised periodically that the adverse impact of rupee appreciation could force IT companies, for whom exports account for a major part of revenues and profits, to cut down on the wage hikes and other employee costs in order to offset the impact on their margins.
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RatingWe have a misconception here, not only the Indian Rupee has strengthen but the larger impact is due to weaking of dollar in the global market. This dual effect has affected India IT companies and Indian professionals working abroad. The idea of cost cutting for local professionals is lousy instead big corporates can use financials instruments like cost hedging to cover up their losses.
What if US currency again goes up to Rs 45 or Rs 48? Will they increase the salary? It is clear bull$hit and clear that HRs planting such silly stories in the media. How come real estate alone going upwards beyond the reach of even senior level executives? How about essential commodities, gas price etc...going up all the time? Will they take that into consideration as well?
So you accept that you were making merry with the exchange rate difference and I would also request you to search for ULTIMATE AMERICAN DOLLAR COLLAPSE YOUTUBE in google and checkup if ever the dollar would appreciate again. Getting realistic salary is no big tragedy. Whatever has happened is only tip of the iceberg.stop daydreaming that testing coding are super brilliant jobs and salaries will only increase forever.
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