June 30, 2008

Salary Survey – 2008

Filed under: Compensation Surveys — Tags: , , , — hrcases @ 5:34 pm

The HR function is a critical element for growth of any company. It has become strategic, because capital is now an easily available commodity, but people are not. So, the only constraint to growth is people. And that is a not a new problem for the Indian Industry. Emmay HR and BW have conducted this year’s Salary Survey, comprehensively by covering costs, compensation and benefits across 12 sectors.

Though HR has moved up the value chain, there is still conflict with other functions such as finance and marketing on the importance given to it.

The rising importance of HR was first noticed when key professionals were hired or shifted to the function. Many top companies today have HR heads that are top performers and are not necessarily from within the HR function. And it’s happening in the opposite direction as well, with HR heads also moving into business roles in progressive companies.

S.V. Krishnan, who headed Satyam Computers’ largest business unit, was chosen to lead Satyam’s HR function in 2007. He replaced Hari T, who moved on to a strategic role as head of marketing.

This changing role of HR in Indian companies has led to a recalibration of budgetary planning. Planning an HR budget? It is a complex job, as there are several new components to it. That level of involvement has come about because an HR budget today has to factor in components such as recruitment costs, retention costs, alternative compensation plans, and employer branding initiatives.

Recruitment costs have gone up immensely. Today, it’s about hiring the right recruitment agency. The cost of hiring such agencies includes a retainer fee and 30 per cent of the new employee’s annual salary. A new component in HR budgets is training cost. Expanding companies are hiring entry-level employees from other sectors. These employees need training before they can be deployed.

The need for training has been driven upon companies due to soaring levels of attrition. Sectors such as IT and BPO have traditionally witnessed 25-35 per cent attrition rate.

Nowadays companies also have to invest in employer branding to help attract and retain employees. Wooing employees through offline and mainline media advertising is a new challenge for HR heads in other sectors.


The job market has imposed discipline on companies in terms of planning HR budgets. It has forced them to plan long-term to reduce regular and rising training expenses. Most companies today have in in-house training facilities. The growing companies have realized that they not only need to attract and recruit good talent, but simultaneously build a social architecture that allows these employees to achieve their goals within the company. This seems impossible without a strong HR function and the top management’s involvement.


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