A raise in PAY

 A raise in PAY :-)

Last week I had a discussion with an IT professional who heads the strategy division at one of the leading infotech company. We discussed lot of topics but main was IT industry boom in last 2 years.
Booming time .. freshers getting job offers one to two years before finishing their education, experienced getting 20 to 50% hike with new offers, several 'agents' from job consultancy companies etc etc etc ... But all of a sudden things are looking different now. In last 3-4 months market is slowing down. Though every one knows its a business and there are ups and downs, there are few points which one must consider this time. Its not the case of 99-2000 where people had just enthusiasm than proper plans. But this slowdown has its own problems.

For any mid or large size software company, there are several people working at various levels with different job profiles. Their salaries, work is as per their talent, market conditions, industry standards and company policies. Overall its a pyramid in which freshers, new joiners forming a bottom most level with large mass; then module leaders, team leaders, project managers, department heads, management executives etc. Salary wise also, the structure is a pyramid. In case of booming market conditions such structure starts shaking a bit. Companies lure people by offering them higher salaries and hire more people at various level. When companies add people at bottom most level, automatically, employees present at that level are moved up. The overall pyramid structure remains as it is due to this pushing up but the talent required by an individual at that level is not checked all the time. In booming time, such activities are not noticed, as there are more projects, more 'billable' resources are required and company gains from client for that.

But when booming time stops and projects become scarce, these people become real difficulty for any company. They are already at much higher salary than their talent. They are moved up just because there were people under them and not based on their talent or leadership skills. After a certain point, an individual is expected to handle more responsibility of work than doing actual work. One must be able to emerge as a great manager, leader. Developing this quality is not at all easy as it requires combination of talent, skills and experience. Hence most of these people at this stage become redundant in the company and ultimately given pink slip.

Now what these people should do ? They definitely have experience, knowledge and skills. But after that the next expected level is leadership which not everyone can develop. These people can then work as a freelancer and use their expertise. They can use their technical knowledge to help other companies. Being a freelancer, they are always available and companies do not need to feed them when there are no projects. Many people are already doing that. This will become the culture in IT industry soon. Lets see how this economic slowdown affects its timeline.


Chintan said...

This happens when ppl are promoted based on just experience and not ability. Increments based on expreince was the norm in the public sector; Sad to see it has percolated into the private IT companies as well. Technologies today are very fluid and capability/ability to adapt & learn score high points and should be the basis for promotions, not how many years one has been muddling along in the company.

I am not sure if the traditional pyramid is the beast way to organize the IT dept. Unfortunately, the managers at the top are not willing to risk any other way.

Freelancing (IT consulting) will gain popularity as most IT tasks become modular and readily available off-the-shelf (SAP). Therefore big companies like IBM, H-P (thru its EDS acquision) & Oracle have invested heavily into consulting. I don't think freelancing will be popular with single invidivuals as ppl with work would not be very confident with free-lance work. There has to be some sory of 3rd party guarantee that the work by this individual is reliable (good quality, on time & in budget).