Monday, January 5, 2009

Salary grows at snail’s pace for execs

Genext is suddenly learning to live within its means. As companies start trimming salaries with a chop-chop hurry, executives scramble to stay two steps ahead of bankruptcy.

Take Ritesh Kapoor (not his real name), a finance executive with a leading bank, who has just entered the school of hard knocks. With an annual salary of Rs 20 lakh and the promise of a hefty raise every year, he didn’t think twice before taking loans for a flat and a car. Then his world fell apart. Struggling with the credit crisis, his company decided on a salary cut. Repaying the loans is today Mr Kapoor’s biggest worry.

Mr Kapoor is just one of the hundreds of executives burning in the simmering economic crisis. “Employees in real estate, financial services, IT and related services (ITeS) should prepare themselves for salary cuts of up to 15%. The first quarter of 2009 will see major cut in compensation levels and lower pay hikes,” said Kris Lakshmikanth, chief executive of recruiting firm Headhunters India. The salary growth looks worse on a global scale. The latest International Labour Organisation report forecasts that wages will grow at best 1.1% in 2009 — down from 1.7% clocked in 2008. More...

Contributed By:
Indrani Kar
(Knowledge Cell - Globsyn Business School)

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