|
Employee stock options, which were once the favored tool for attracting the
best talents by the best companies, have lost the fizz. Fixed cash, though, has
emerged as the most important part of compensation for a majority of students
across engineering campuses in India.
ESOP: Losing Favor
According to CareerNets Campus Compensation and Student Perception Survey
2008, fixed cash is the most important part of compensation for 65% students. In
conjunction, 53% students expressed clear negative or a not so positive opinion
about employee stock options.
There was a time when employee stock options made millionaires out of the
young 30-something techies. However, the ESOP carrot doesnt seem to work so
well any longer. The build-up has been happening for the last few years.
According to Rishi Das, CEO, CareerNet Consulting, Over the last 4-5 years the
batches have not made money on stocks. As a result, they dont see it as
lucrative anymore. Moreover, with the ESOP earnings coming under the tax net
they no longer remain as great a bargain as they used to be.
Most pertinent is the unpredictability and instability of the Indian stock
market, making the ESOP component less lucrative. The top IT companies have been
among the big wealth losers in 2008. Some IT biggies like Infosys, TCS, Wipro,
Satyam, HCL Technologies, Tech Mahindra, i-flex, MphasiS, Patni and Moser Baer
witnessed a fall in their market cap. While Infosys, TCS, and Wipro lost Rs
18,000-42,000 crore, Satyam, HCL Tech, and Patni lost Rs 2,000-4,500 crore.
Where, at the same time, Tech Mahindra, i-flex, Mindtree Consulting, Hexaware,
Subex, and NIIT Tech lost between Rs 1,000-10,000 crore each.
Most recently, after the US stocks tumbled on June 6, 2008, Infosys fell 4.6%
to Rs 1,901.50 and TCS fell 5.4% to Rs 914.10. While Wipro declined 5% to Rs
480.30, Satyam Computer dropped 3.8% to Rs 490.55. So, considering, the Indian
software companies get more than half their sales from the US, the turbulences
will have their undercurrents traveling up to the Indian shores.
As a result, there has been a greater incline toward the fixed cash component
of the overall compensation piece. Rising inflation has further generated favor
for the fixed cash piece of the pie, which is a bigger help when it comes to
meeting month-to-month expenses.
Profile, Brand Score High
So what are the factors that matter most to students in the Indian campuses
today? Surprisingly, compensation scores low when it comes to deciding or job
offers by students. In conjunction, a higher salary offer doesnt necessarily
translate into attracting freshers on campuses for IT companies: as per the
CareerNet survey, compensation is the most important deciding factor in
accepting a job offer for a mere 10% students. In contrast, a majority, ie, 57%
students cite job profile as the deciding factor in accepting a job through
campuses. In the same seam, 35% cite low-end work as the top factor in declining
an offer on campuses. And, further contrasting this, only 13% see low salary as
a reason for declining a job offer.
Also, for a good 56% of the respondents, job satisfaction and recognition are
the most influencing factors to stay beyond one year in an organization. On the
other hand, 21% consider the companys brand name while accepting an offer.
Among the key deterrents for students on campuses are service bonds, with 24%
students on campuses citing it as a reason for declining a job.
Recruiters too seem to be in sync with this reality, with 48% companies
holding up job role/job profile as their USP for attracting students. On the
other hand, 30% see branding as their unique selling proposition. Compensation
is being sold as the USP by only 13% of the companies surveyed. Also, a mere 10%
of the survey participants use service bond (duration of the service bond is
generally two years and ranges between Rs 75,000 to Rs 200,000) as a retention
tool.
Surge in Benefits
Overall, there has been a surge in benefits offered by companies on
campuses. According to Das, if one compares the benefits offered by companies on
campuses to attract talent in 2007, with what they are offering this year, it is
noticeable that there has been an increase in benefits. According to the survey,
37% companies are offering transport facilities as opposed to 17% in 2006. With
more companies moving to outskirts, transport is becoming a significant benefit
factor. Further, as compared to 25% companies in 2007, 34% are providing
broadband connections/mobile phones as perks to their employees in 2008. Also,
58% companies are providing food subsidy/free lunch, coupons, etc, in 2008 as
compared to 40% in 2007.
Fifty nine companies participated in the survey, which included companies
across the country including Indian/foreign, captive/profit centers,
product/service companies from application, semiconductor, systems, KPO, and BPO
domains. Over 2,200 students from over 120 engineering campuses across the
country also participated in the survey.
Shipra Malhotra
shipram@cybermedia.co.in
Page(s) 1
| 
