Infosys salary hike freeze – wake up call for Indian IT

indian it companies alok kumar

Infosys announces salary freeze. This came with tons of employees of the IT major venting their frustration blaming HR head with taking such harsh decisions when the reality seems to be otherwise. It all looks that these employees are being exploited and Infosys is simply taking advantage of their position in market.

In reality, it seems this is the beginning of the end of the IT business model which started more than 25 years back. I would term this nothing more than a standard change process where one form gives way to another and change keeps happening.

“India although is largely an IT services provider has absolutely no credible intellectual property even after 25 years of experience …”

The most unfortunate part is that Infosys is not alone in this mess but they will be soon joined by the rest of the folks in IT industry in India. It is unfortunate that most of the IT companies are still living in fool’s paradise where the warning signals are ignored and managing such issues are addressed by salary cuts.

A little more far sighted approach would have made things very different. Isn’t it food for thought that India although is largely an IT services provider has absolutely no credible intellectual property even after 25 years of experience. Facebook, Google, Microsoft, Oracle, Amazon, eBay and so non are all non Indian phenomenon. With such a vast IT pool, we could have created ten times more such properties, but for the short sighted approach of IT leaders in India.

IT companies are still very proud if they get some basic work which may not be even worth mentioning by such companies. This will certainly have an impact as no action has been taken so far to remedy this. The body shopping has gone farther than what was reasonable.

Good part is that it has just started with Infosys and with salary increase freeze. Indian IT professionals have to start adjusting to a new normal very quickly where the mantra will be perform or perish. Days of hefty pay hikes will be replaced with satisfaction of retaining the jobs. We need not go too far, but just look into what has happened in US on job front.

This is high time for every IT leader and Indian Government to wake up and start looking at harnessing the real intellectual power of Indians and not keep happy with data entry and basic technology work which will soon dry.

Have something to add? Share it in the comments.

Picture Credits : Techshout, For representational purposes only

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

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7 Responses

  1. Anand Sharma says:

    If you look at it, its a different kind of hike to the employees. Recently, Infy distributed shares to all of its employees, so if now they are declaring dividends to the share holders, it means each employee will also get some dividends.

  2. Amit says:

    Good blog post. Agree with your points.. I think it was about time some correction happened in this area.


  3. Alwin Anthony says:

    Agree Anand.
    If the IT industry continues to work the way its working the share value too would erode shortly before we realize.

  4. Infosys idiot says:

    It true we got shares but just 7 shares and dividend is Rs32 per share.

  5. Samrat Banerjea says:

    I have been associated with different kinds of industries from manufacturing to mining to IT (last). One thing I have realized that most Indian IT Managers, in spite of all the rhetoric and grandiloquent words and jargon of transforming India into a IT Superpower, have failed to understand the essence of Knowledge Management( Refer : Steven Convey) .

    They still run IT Industry as they would have run a Manufacturing Industry. How many of the Managers really understand and appreciate the importance of Computer Science fundamentals and their applications in the day to day work execution. I have numerous anecdotes of real life Managers’ joke on their IT ideas. These breed have become just White Elephants and are more worried about Onsite visits, bandwidth, visibility etc. They form the bulk of NPAs.

    I know these breeds have successfully transformed Great Companies to just Trading Companies. A little reflection and a insight into a Large Company’s functioning will show the correct picture…! and a very frightful One…!
    Even a Manager at a Shoe Manufacturing Company has more knowledge than a Manager at an Indian IT Company.
    We must understand that unless we change our mindset and our think-pattern, we are not going anywhere. We will look up to others when they will throw us with some new technology and like programmed bots, gobble up concepts and fill up the job bazaar.

    Struts, Hibernate, Spring,Groovy,Grails,Oracle, TIBCO, Toplink, LINQ, Linux… the march continues. No IndiOs but clones of Linux(es) coming up and touted as Indigenous Linux!

    We are not idiots or technically inferior. We have a very large pool of talents. But our focus is blurred. We always look on short term gains. How many of us are aware of the Indian share of the Global Software Exports. Shocking.

    Our MPs read some chain mails and make a statement in Parliament that 33% of Microsoft Employees are Indian. Cruel Joke.

    The list , expressions and assertions will go on. I really don’t know where and how to stop.
    Needless to say, with such mindset and outlook, I could not bear these things and am starting my own IT company.


  6. Alok Kumar says:

    Well articulated and candid inputs. The decay of the IT business is going to hit the country hard where more than 50 percent of the employees would not be even employable within few years as they leave the core technology to become managers who don’t know how to manage.

  7. Bharat Engineer says:

    The policy on salary hikes at Infosys / Wipro — where the mediocre laterals are paid higher than the high performing employees — screwed up the industry completely. When every IT employee thinks that the only way to get a pay hike is to jump companies, where is the motivation to perform in the current company? When the employees are paid based on the interviewing skills & negotiating skills, and not on the quality and quantity of their work, the industry as a whole will be rotten, sooner or later. Infosys & Wipro who are the pioneers in the Indian IT industry are also responsible for the present state of the industry in India(only menial low level work, no IP, no great ideas, a digital sweatshop)

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