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IT companies using retention bonuses to keep staff with new digital skills
Tech companies Wipro, Tech Mahindra and Cognizant are doling out retention bonuses to hold on to their limited pool of talent with expertise in robotics, machine learning, cognitive tools, artificial intelligence, block chain, augmented reality and other automation technologies.
“Emerging tech talent is currently at a premium due to short supply. We have given retention bonuses this year to this talent pool and would continue to do so till the pool is abundant,” Saurabh Govil, chief human resources officer at Wipro, told ET.
At the junior level, companies are ready to give raises of as much as 70% to keep recruiters away. At the top, the salaries for such talent ranges from Rs 2 crore to Rs 4 crore per annum without variables, according to Arun Das Mahapatra, chairman of Heidrick & Struggles India, an executive search firm.
“2018-19 has been a good year in terms of CXO searches. Growth has been led by automation and digitisation,” said Mahapatra. “At the mid level, the salaries range anywhere around `30 lakh to `50 lakh per annum. Hikes are more prominent at the junior and mid levels,” said Ashish Sanganaria, a partner at Transearch. The retention bonus is equivalent to 1 to 3 months of annual salary, depending on experience, according to Sanganaria.
Cognizant used retention bonuses to hold on to employees with new digital skills in 2018. “We paid it to approximately 40,000 employees up to the manager level,” said Satish Jeyaraman, vice president of human resources at Cognizant. This has helped the company make packages more competitive for employees with niche skills while encouraging them to proactively get trained and certified in emerging technologies, said Jeyaraman. At Cognizant, employees working on critical projects or know/contribute in a foreign language also receive a business allowance.
Demand for automation has proved to be a blessing in disguise for the IT sector, which had slowed down over the past few years. “With the emergence of new ideas in the area of AI and automation and new uses for data, role of IT as a key driver of business is certain for the near future. The focus is on emerging technologies in the areas of big data, IoT, AI and consumer machine interfaces, in addition to the regular skills that the industry needs,” said Richard Lobo, head of HR at Infosys. “We are using retention bonus to retain talent, especially those with niche skills,” said Harshvendra Soin, chief people officer at Tech Mahindra. “Our employees are key to making us futureready and deliver connected experiences.” According to Transearch India, an executive search firm, for every 100 openings for roles in emerging technologies, only 30 candidates are available.
One tier-1 IT services company, a client of recruitment firm ABC Consultants, offered a 50% hike to a candidate for a senior director role in the banking and financial vertical that required expertise in automation and block chain. “This candidate was leading a financial account in his current company and the company didn’t want to lose him. Senior-most stakeholders were directly involved to retain him after promising a larger role with higher responsibilities and a salary raise,” said Ratna Gupta, a director at ABC.
“At least four out of 10 offers are getting a counter-offer over the last quarter and this has revived IT hiring, which was in slump,” said Rituparna Chakraborty, cofounder at TeamLease Services. Chakraborty cited examples of emerging tech talent getting a 50% raise as a result of counter-offers.
“Companies are guarding their top talent closely and are using analytics and other methodologies to pre-empt the loss of a high-potential employee, much before that resignation letter comes in,” said Gupta.
Almost all candidates with emerging technology skills are asking for more than 50% to change jobs and their current employers have to hike up their salaries by 60-70% to retain them, according to Kamal Karanth, co-founder, Xpheno, a specialist talent solutions company.