And in India ( a developing mkt), it doesn't work.
In developed mkt we see have seen that salary rises for last few years has been nominal, in single digits, maybe just a few % points more than inflation. But in India the avg has been ~15% with mid-to-higher management levels witnessing 40%+ levels. More so in lateral hiring a doubling of pay is more of a norm! Thus in India atleast, we are still living a self fulfilling aspect of a short-on-talent and long-on-demand job mkt scenario.
Add to it the recent inflation and we see India witnessing the proverbial wage-price spiral! Given we are stil developing, we need to be aware that this mkt competitive pay concept is not at all working in India at the moment. A few more points to explain the current conundrum:
Firstly, compensation, is just a hygiene factor. What makes people stay in firms is content, people & lifestyle. These 3 things these days define the expectations of a successful, commited employee.
Secondly, India will continue to have the low-cost advantage for maybe next 5-10 years more before we get globally aligned and our job mkt matures.
Lastly, India is the next growth engine for the world (along with China or even Middle east) and its sectors like Retail, Financial and other professional services, IT (yes, scope still remains in applications in bio & energy domains) would continue to defy the norms of a mature job mkt. The War for Talent is on and so the exuberence will continue for some more time to come...
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