December 17th, 2008 
Tushar Mathur
Inexorable Salary cut continues in FY09–
Facing the economic meltdown the companies have started laying off people and there’s a big chaos in the organizations dealing with the cutting down of the salaries.The executives are scrambling two steps ahead of bankruptcy.It is expected to get worse in the coming six months.
ET reports “Employees in real estate, financial services, information technology (IT) and IT enabled services (ITeS) should prepare themselves for salary cuts of up to 15%. The first quarter of 2009 will see major cut in compensation levels and lower pay hikes,” says Kris Lakshmikanth, chief executive of recruiting firm Headhunters India.
Globally, the growth in salaries may be even slower. The International Labour Organisation forecasts in its latest report on wages that they will grow by at best 1.1% in 2009, compared to 1.7% in 2008. In most companies, lower-and-middle-level employees would be the first to face the axe.While companies in services and real estate have already begun the slash-and-burn, the manufacturing industry is waiting for next quarter results before swinging into action.
“Only 40% of the top performers would get salary hikes and increments in real estate, finance, IT, ITeS and manufacturing companies next year. The bottom 20% will suffer,” said Dr Ganesh Shermon, who heads consultancy KPMG’s people and change advisory practice.
The software sector’s other big players, Infosys and Wipro, have already announced plans for single-digit salary increases in FY09. Things look equally grim for executives in real estate companies. The financial services companies ET contacted declined to comment on plans to revise salaries over the next quarter.Meanwhile, the crunch comes as a blessing in disguise for the overheated salary market. “The global slowdown has turned tables and made India Inc an ‘employer’s market’ rather than an ‘employee’s market’,” said a senior HR manager in the staffing and recruitment company.
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