[Naetik30]

Originally Posted by V.Narayan

Dear @arnabbhagobati, First welcome to Team BHP and thank you for your first post. Thank you for your views and putting it across in a professional way. Made for interesting reading even though as a faded entrepreneur, still with a finger in the IT pie, I tend to disagree with some of what you write.

My post was taken out of context. But lets continue the conversation.

I believe we all agree - an ethical business is always good and the share price would reflect that.

1. How many clients of Indian IT do you think are aware that sitting in the huge office buildings are actually science and arts graduates. And not BE or ME graduates? As most pointed out earlier - the client is the most important stake holder.

2. With laws against bonded labor in India, these companies literally bent the rules and laws to still have bonded labor. And on top of this drill into every recruit from day 1 that they are the most ethical company ever in India. What with the story of "Oh Bommanahalli office was run with just Diesel gen set for months as the Electricity Dept asked for a bribe".

More info - when a new college recruit signs up, they used to take out a loan from a PSB in the name of the recruit for XXXXXX rupees. This would then be deposited in the name of the company. If you complete the bond period, the FD matures and pays for the loan. If the recruit leaves before the bond period, they will have to pay for the loan. Yeah - lets still all stick our heads in sand and say - but Indian IT engineers are the best paid so dont complain.

Hell, even onsite deputees had to sign a bond for USD xxxxx before they left to the US. All of the above was followed few years back. I am not working for an Indian IT company for more than a decade and dont have the current details.

3. There is more. But enough dirty linen for one day.

Also - lets please stop with the whatabout-ery. Labor being taken advantage of in one industry does not justify the same in other industries.

And the argument of "the company is not forcing you to work at the said salary" does not hold as well. Are you all really telling me that the Indian IT salaries are stagnating at 3L per annum without the collusion of multiple companies over multiple years. Come on.

[thanixravindran]

Originally Posted by arnabbhagabati

However, if you earn Rs 100 on one end and pay Rs 20 on the other side, I do have a concern.

It is not correct to make this comparison, and this is obviously a gross exaggeration, but just for providing perspective, think about this like the people working in exploited coal mines (again, exaggerated, but like shown in gangs of Wasseypur). Just because a business is generating employment, and any business has the right to maximize profit, does not necessarily mean the generated employment is always ethical.

They are good businesses, but as OP said, I would not use them as yardsticks for moral/ethical business.

Interesting, I was not looking at the balance sheets of Indian IT giants recently. Will you please provide evidence that their gross margin is 80% as you claim? It's ok, you don't have to look as you took the figures as example. It will be around 30%.

What you are alluding is the exploitative capitalism is prevailing in IT industry. The same one practiced in the more severe form of slavery and human trade in 19th century by colonialists as well the oil companies (robber barons) in twentieth century. I still do not believe this is the case with IT industry as my belief is its demand Vs supply for the stagnation of freshers salary. The salary for experienced folks is based on demand of skill set

Do you believe government are accountable to balance things out. Shouldn't they then step in and impose super natural profit tax or windfall tax due to cost arbitrage opportunity? Or shouldn't be more stricter about quality of engineering colleges than quantity of colleges?

[Samurai]

Originally Posted by Naetik30

2. With laws against bonded labor in India, these companies literally bent the rules and laws to still have bonded labor. And on top of this drill into every recruit from day 1 that they are the most ethical company ever in India. What with the story of "Oh Bommanahalli office was run with just Diesel gen set for months as the Electricity Dept asked for a bribe".

More info - when a new college recruit signs up, they used to take out a loan from a PSB in the name of the recruit for XXXXXX rupees. This would then be deposited in the name of the company. If you complete the bond period, the FD matures and pays for the loan. If the recruit leaves before the bond period, they will have to pay for the loan. Yeah - lets still all stick our heads in sand and say - but Indian IT engineers are the best paid so dont complain.

Hell, even onsite deputees had to sign a bond for USD xxxxx before they left to the US. All of the above was followed few years back. I am not working for an Indian IT company for more than a decade and dont have the current details.

3. There is more. But enough dirty linen for one day.

There are millions of engineers in India who after reading this will say, where do I sign up? In fact, I was one of them. After working in a software company which hadn't paid salary for almost a year, I was totally cool with signing a bond and double my salary. I salivated at the prospect of actually getting the salary on hand, unlike in my previous firm.

To quote an older post:

Originally Posted by Samurai

Thanks guys. It is mostly group speculation. When I mean self imposed, I don't necessarily mean just individually imposed.

When I moved from a small startup to TCS in 1992, my salary doubled. For a while I thought I am truly being paid what I deserve. But it only took couple of months for that feeling to vanish as my new colleagues convinced me that we were really underpaid. So group speculation does have a huge impact.

Any time an Indian IT employee feels underpaid, talk to a sibling or a friend who is in non-IT job with similar years under the belt. Keep your hand up as guard, because you will be in a real danger of getting slapped. I have cousins working in banks with 15-20 years of experience, they make less than half of what a WITCH company employee with half their experience does. No, there is nothing wrong with their intelligence.

Originally Posted by V.Narayan

Sixth, the outsourced industry in the world has this off way of pricing by the employee hour a little bit like law firms. This gives the young and naive IT software coder the incorrect impression that he is worth that pricing rate. That pricing is an amalgam of the organization, compliance, quality control, liability management, etc brought to the table by the IT company expressed as a per hour rate. This I believe leads young people to believe incorrectly what they are worth. If they were to step out and try and sell their coding services alone or even as a small entrepreneur, they will achieve the nirvana of true price discovery.

This is an extremely important point, which most employees never understand unless they sit in price negotiations with the customers. When they do that, all sense of self worth will evaporate. Why? Because they will realise that customer is not paying for their awesome coding skills. Instead, they are paying for the ability of the IT giant to bring dozens of diverse functions together and provide a consistent service despite high attrition, thanks to their vast pool of resources and deep bench strength.

[condor]

Originally Posted by V.Narayan

That pricing is an amalgam of the organization, compliance, quality control, liability management, etc brought to the table by the IT company expressed as a per hour rate.

@Naetik30, if you still don't get the above point, add the words "costs incurred by the organisation to exist/survive/function in a way to bring all the above to support the coder to do his work. All the people and functions who must work to keep all this in place."

I will also suggest to look up the difference between signing a bond for a specific duration/condition of your employment -vs- actual Bonded Labor"

When one looks at all that, a person could also ask himself if he is putting in the effort to complement all this. And the next question would be - how much should he put in for a justified progression in his career and compensation.

[srvm]

Originally Posted by Samurai

......
To quote an older post:
Any time an Indian IT employee feels underpaid, talk to a sibling or a friend who is in non-IT job with similar years under the belt. Keep your hand up as guard, because you will be in a real danger of getting slapped. I have cousins working in banks with 15-20 years of experience, they make less than half of what a WITCH company employee with half their experience does. No, there is nothing wrong with their intelligence.
.....

I had to respond to this post, particularly the part I have highlighted, Samurai.
I'm not in IT domain. Recently, work took me to IIT Madras (we can all agree it is a reasonably reputed educational institution).
Some final year BTech students were preparing for campus interview by studying AI, ML, Deep learning etc. (their core domain isn't CS/IT). When I asked them why they weren't interested in working for Global majors in their core engineering domain (who do come to campus interview) their response was:

"Those global majors pay Rs.20 lakhs per annum as salary (based on previous years/seniors placement data). Whereas AI/ML tech companies pay Rs.35-40 lakhs/annum as starting package for freshers. We slogged for JEE since 6/7/8th grade and now slogged in IIT for 4 years for BTech degree. Now its time to cash in the check. Who in their right mind will take up core domain job for Rs.20 lakh annual package?"

To me, it was a grim reminder of the IT vs non-IT skew in pay.

[Guna]

Originally Posted by car love

I'm not naming for obvious reasons. This person i met heartily laughed at the gullibility of the average Indian in believing this "Simple man" tale. According to him the said individual was one of the nastiest individuals he's ever come across

You can't build a business empire if you are 'simple' as well as 'easy going' on everyone/everything. This gentleman (if I guess correctly whom you are referring to. I know people who worked directly under him) is extremely firm/assertive and could be curt and uncompromising (but not unethical) to get things done. I don't know whether you can call it 'being nasty' but that is the common trait you would see in most of the successful entrepreneurs.

[V.Narayan]

Originally Posted by Naetik30

With laws against bonded labor in India, ....

An industry where a third of the employees quit each year to take up a higher salary elsewhere in the industry can scarcely be termed as bonded labour.

Also - lets please stop with the whatabout-ery. Labor being taken advantage of in one industry does not justify the same in other industries.

I don't see why paying the wages which, lakhs of employees, year after year, are willing to join and work at becomes "exploitation of labour". As an employer of long standing my employees in a very technical brick & mortar business worked/continue to work with us for years/decades at salaries more modest than the IT industry. Clearly, they are fools or slaves in your eyes. I'm talking of employee strength in the low 4 figures not in fives or tens.

And the argument of "the company is not forcing you to work at the said salary" does not hold as well. Are you all really telling me that the Indian IT salaries are stagnating at 3L per annum without the collusion of multiple companies over multiple years. Come on.

You may have your views on Rs 3 lakhs per annum. Clearly tens of thousands think differently and take up those jobs. Also, this figure of Rs 3 lakhs bandied about so cheerfully on this forum is applicable only to some companies and within that to only a section of the newly employed. As a Board member of one large IT company and two specialist IT companies that is what I get to see in our business reviews. If a fresher has limited practical skills graduating from BE {or other degree} and needs to be helped up the curve to become productive then that Rs 3 lakhs is more of a stipend till he/she can hold his/her own.

If we are so deeply unhappy with our job/boss or our ex-boss/ex-job then upgrading your skills will be more useful than cursing the entire industry. Our experiences are unique to ourselves though we assume it is universal. We should not assume it applies to the 5.4 million employed by this country's IT/BPO industry. All those few millions who work in India's IT services industry are not as unhappy as you might be nor are they exploited fools that you may be assuming them to be.

Peace.

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Originally Posted by srvm

I had to respond to this post, particularly the part I have highlighted, Samurai.
I'm not in IT domain. Recently, work took me to IIT Madras (we can all agree it is a reasonably reputed educational institution).
Some final year BTech students were preparing for campus interview by studying AI, ML, Deep learning etc. (their core domain isn't CS/IT). When I asked them why they weren't interested in working for Global majors in their core engineering domain (who do come to campus interview) their response was:

"Those global majors pay Rs.20 lakhs per annum as salary (based on previous years/seniors placement data). Whereas AI/ML tech companies pay Rs.35-40 lakhs/annum as starting package for freshers. We slogged for JEE since 6/7/8th grade and now slogged in IIT for 4 years for BTech degree. Now its time to cash in the check. Who in their right mind will take up core domain job for Rs.20 lakh annual package?"

To me, it was a grim reminder of the IT vs non-IT skew in pay.

Thank you for this succinct post spelling it out like it is. And off topic: thank you for those educative posts on carbon fibre and its qualities as applied to deep submersibles. Very enlightening.

[car love]

Originally Posted by Guna

You can't build a business empire if you are 'simple' as well as 'easy going' on everyone/everything. This gentleman (if I guess correctly whom you are referring to. I know people who worked directly under him) is extremely firm/assertive and could be curt and uncompromising (but not unethical) to get things done. I don't know whether you can call it 'being nasty' but that is the common trait you would see in most of the successful entrepreneurs.

Point taken. No innocent baby in the woods has gone onto create mega corporations. I quoted what a top notch consultant who was not employed/beholden to the said person and which were his own personal views. Also you just can't assume everything was ethical too just like maybe the consultats view was wrong too. The kind of land grab they have done doesn't look too ethical to me. We all know how land allotment was done in Bangalore in the 90s.

[Jaguar]

Originally Posted by Naetik30

1. How many clients of Indian IT do you think are aware that sitting in the huge office buildings are actually science and arts graduates. And not BE or ME graduates? As most pointed out earlier - the client is the most important stake holder.

What's wrong with science or arts graduates if they are able to perform (sometimes even better) than a BE or ME? A lot of the clients do their own background verification and have access to the educational qualification of the employees. Yes, the companies do boost the skillset of the employees and claim they are the best in the industry.

In my understanding, the requirement of a 4-year BE is only to satisfy the 16-year H1B requirement and has nothing to do with the skillset. In fact, these days many IT companies hire people from the arts and phycology background because they bring in a different perspective and insight into human behavior required to develop more interactive apps and software.

Originally Posted by Naetik30

More info - when a new college recruit signs up, they used to take out a loan from a PSB in the name of the recruit for XXXXXX rupees. This would then be deposited in the name of the company. If you complete the bond period, the FD matures and pays for the loan. If the recruit leaves before the bond period, they will have to pay for the loan. Yeah - lets still all stick our heads in sand and say - but Indian IT engineers are the best paid so dont complain.

Hell, even onsite deputees had to sign a bond for USD xxxxx before they left to the US. All of the above was followed few years back. I am not working for an Indian IT company for more than a decade and dont have the current details.

I started my career in one of these IT services giants close to 2 decades ago and am hearing about this for the first time. Have heard of bonds but a loan in the name of the employee is a first. Again, I am not aware of the bonds being enforced. I never had to sign any bond and moved to a product company after 2 years. In fact, a vast majority of my batch switched to better-paying jobs (both in India or after going onsite) and I am not aware of anyone being made to pay any money.

Smaller companies might make employees sign bonds but the rationale is different. A friend of mine runs a small IT firm and he hires the rejects from Tier 3/4 colleges who can't find employment elsewhere. Obviously, the major part of the first year goes into training them. The issue is that after getting trained, most of these folks are able to clear interviews with the bigger companies and end up leaving within the first six months to a year. Since he can't compete with the biggies on salary, he is exploring legal options to keep the people from leaving.

[arnabbhagabati]

Hi,
First of all, thanks a lot for everyone's valuable insights in earlier posts. We all are entitled to our own views, probably some of them are right some of them are wrong, and, as with many other things, what is correct is complicated and grey at best. However, that doesn't mean we can't discuss things does it?

I am no expert, whatever I say are my personal views based on empirical observations only. Take whatever I say with a pinch of salt. As I said earlier, my concern is with ethics only, and not with poor business/legal practices

However, whatever our views might be, can we abstain from whataboutsim please? For folks not familiar with the term - this and this

Whataboutsim rarely adds value to conversations.

Originally Posted by V.Narayan

That is not a trait of the IT industry alone but every industry in this country and in every other country. As an employer allow me to share why that happens - first, the under-graduate passing out in India is barely employable, needs at least a year of on-the-job training to get to the point of being useful and they attrite like there is no tomorrow. All these make it imperative for the employer to look after his flanks before investing more in these starter employees.

Agreed. A employer/businessman has every right to pay whatever amount it feels justified for training college grads. In fact, on another post someone mentioned that he/she started career as a trainee with no salary at all(whataboutsim). Is it ethical to expect someone getting trained in your trade, stay in the location you prefer and not get paid? maybe not. If not, how much salary is ethical then? Is Rs1k/month enough?
The fact that the employees attire the moment they can as you said, and that employees are attiring for 30% higher salaries (as mentioned in another point) seems to indicate something maybe?
Also, since you said that under-graduate passing out in India is barely employable, do you have any suggestions fix this? What do you think is lacking?

Originally Posted by V.Narayan

Second, who is to say what is an ethical wage? If the employee is willing to work and the employer is willing to offer a job at wage X then that is it - the market wage. Just because some other busybodies, who by the way are not offering any employment to anyone, believe the wage ought to be X+1 then let them put their money where their mouth is and create those jobs. These busybodies are usually wanna be employees.

yes, that is the market wage. Not necessarily ethical.
Reminds me of people working in manual coal mines in meghalaya. People used to willingly work 12 hrs a day to dig "coal tunnels" for some x amount of money. Because there was no other job available that pays better for them. hence that is the market wage for that job. Ethical ? no. (exaggerated example to drive a point)
In case of IT industry though, there seems to be other options. Hence the problem with attrition mentioned in another point.

Originally Posted by V.Narayan

Third, nobody, but nobody is forcing any one to work for these cruel, exploitative, unethical, godless, heartless, profit seeking IT companies. Fact is engineers from every discipline flock to these IT companies because of the lure of the wages, foreign assignments, better marriage market prospects and working in an air-conditioned office with free, or subsidized, food. The alternative is to work in brick & mortar on the shop floor or field.*

Nobody is forcing anyone. Other choice is to be unemployed or take even lower wage (brick & mortar on the shop floor or field) jobs. Lets not say that other jobs pay even less(whataboutsim)
Talked about this in my earlier post as well

Originally Posted by V.Narayan

Fifth, I have always wondered why IT software employees believe that their employers owe them a higher wage as a matter of their right. The typical software employee is forever grumbling about wages, despite being the highest paid in the country for his/her experience+qualification and forever jumping jobs to a better wage. When they are constantly attriting at 30% per annum exercising their right to change jobs within the IT industry, for superior wages, pray how can they grumble about wages. Seems contradictory.

Oh yes, wage (or the amount of wage) is a matter of right, very much.
Are you saying that folks working in other industries do not want higher salary?
Everyone wants higher salary. I know I earn a decent salary (maybe more than decent actually) but I still want more (its greed, I know, and I am flawed, like everyone else). But the point is, everyone wishes their salary would be higher irrespective of the industry. I believe the people in IT industry stands out because of multiple reasons

1. These folks are in front on a computer whole day - more vocal on the internet
2. There is huge income disparity in this industry - some are definitily overpaid, many are paid significantly less
3. There is a lot of expectations from people joining Sofware industry - extraordinary salary, foreign travel/work. Reality is, only lucky ones gets either.

Originally Posted by V.Narayan

Sixth, the outsourced industry in the world has this off way of pricing by the employee hour a little bit like law firms. This gives the young and naive IT software coder the incorrect impression that he is worth that pricing rate. That pricing is an amalgam of the organization, compliance, quality control, liability management, etc brought to the table by the IT company expressed as a per hour rate. This I believe leads young people to believe incorrectly what they are worth. If they were to step out and try and sell their coding services alone or even as a small entrepreneur, they will achieve the nirvana of true price discovery.

Completely agree. Many people tend to forget that the billing is not just for their salary, the salary accounts for only a % of the billing and there are so many other costs

Originally Posted by V.Narayan

And finally, just because an employer pays us less than what we think we ought to be paid doesn't make the employer immoral or unethical. It is a difference of views that's all. The domestic help working in our homes also feels that way against us, BTW! She also wonders why we don't pay her an extra Rs 1500/- a month when we earn at least 100X to 150X that number!!!

Agreed. What we pay our domestic workers is very unethical. Domestic workers are the most exploited lot in our country ( even in some developed countries, I have heard). I believe things are improving ( my friend is paying a maid 18k per month for 8 hrs/day), but thats only because supply/demand ratio is improving as we are lifting more people out of poverty.
I think there should be some regulations in minimum pay for domestic helps

[V.Narayan]

Originally Posted by arnabbhagabati

Hi,
However, whatever our views might be, can we abstain from whataboutsim please? For folks not familiar with the term -
Whataboutsim rarely adds value to conversations.

Careful you don't fall into that vat yourself!

In fact, on another post someone mentioned that he/she started career as a trainee with no salary at all(whataboutsim). Is it ethical to expect someone getting trained in your trade, stay in the location you prefer and not get paid? maybe not.

I did not say trainees should work for free. So you should answer your own question.:-)

If not, how much salary is ethical then? Is Rs1k/month enough?

Whataboutism at work here? Becoming petulant doesn't help. We are talking of, according to some, Rs 25,000 a month for a degree holder with weak or very weak practical employability. We can disagree but that figure sounds, as I have indicated earlier, at the low end of the fair range given the effort and time needed to get the trainee to base one of employability. And as I have also written earlier this figure is not universal. It is the low end given to some in some companies. Several start at better wages too. BTW, no one here is talking of Rs 1000/- a month so don't waste your sarcasm just because we disagree.

Also, since you said that under-graduate passing out in India is barely employable, do you have any suggestions fix this? What do you think is lacking?

Not my area of expertise mate. Not sure why you are throwing that question to me. Sounds like petulance again to me.

Reminds me of people working in manual coal mines in meghalaya. People used to willingly work 12 hrs a day to dig "coal tunnels" for some x amount of money. Because there was no other job available that pays better for them. hence that is the market wage for that job. Ethical ? no. (exaggerated example to drive a point)

A completely irrational comparison. To say IT employees don't have a choice of jobs is so far fetched it beggars belief.

Nobody is forcing anyone. Other choice is to be unemployed or take even lower wage (brick & mortar on the shop floor or field) jobs. Lets not say that other jobs pay even less(whataboutsim)

Those are the facts. Separate matter you may not like them.

[arnabbhagabati]

Originally Posted by V.Narayan

Not my area of expertise mate. Not sure why you are throwing that question to me. Sounds like petulance again to me.

Sorry for bugging you on this. Thing is, this comment about "graduates passing out are barely employable" gets passed about very often, and it worries me. Would you humour me if you dont mind?

You mentioned that you are an employer and you seem to have experienced this first hand

Originally Posted by V.Narayan

As an employer allow me to share why that happens - first, the under-graduate passing out in India is barely employable, needs at least a year of on-the-job training

Surely you saw that something was lacking in the fresh graduates' knowledge/skillset. What was it?
Surely some thought would have occurred to you in the line "I expect they teach/train so and so in college, but alas I have to teach/train them now"?
Or is it more of an individual problem - as in the institution does have the training, but the students just do not want to learn in college?

Did you approach any of the colleges you hired freshers from and tell them about this problem? How did they respond?

[am1m]

Originally Posted by Jaguar

Since he can't compete with the biggies on salary, he is exploring legal options to keep the people from leaving.

And hopefully there aren't any. Legal ways that is, to bind someone to a job they'd rather leave. Any labour lawyers on the thread, could you clarify?

-----------------------

(rest of this has nothing to do with the quoted post)

Either way, I'm quite happy to see a generation of IT professionals that is better informed about these things and won't be in awe of things like 'employee bonds' like we were.

Just need to be aware that in a country as populous as ours, there will also always be someone willing to take the job you left.

But it's a good thing that there are more opportunities for people to move to what works for them. If I had to work x years ago for no or limited salary (and btw, yes, I've worked for a firm where we didn't get paid on alternate months, we were going through tough times and I stayed on like an idiot out of some misplaced sense of loyalty), I'd be happier that other young professionals don't face that rather than remember that with nostalgia.

[Chetan_Rao]

A world full of just employment-seekers or just employment-generators would be equally dysfunctional. I intentionally didn't say employees or employers because the definitions are evolving, either can be the other based on context, and everyone is ultimately a slave to the whims of the almighty 'SHAREHOLDER'.

The ONE thing they all have in common, is NEITHER can sustainably generate $$$ or create value for any of their stakeholders without the others, but all parties love to act like the others are optional and at their mercy.

The world could do with a LOT less high horses.

[V.Narayan]

Originally Posted by arnabbhagabati

Sorry for bugging you on this. Thing is, this comment about "graduates passing out are barely employable" gets passed about very often, and it worries me. Would you humour me if you dont mind?

You mentioned that you are an employer and you seem to have experienced this first hand

My business was in aviation - engineering, operations and audit consultancy. About 75 airlines & lessors across the world were our clients. An industry that is very technical, highly regulated, standardized globally and with enormous liabilities. The aircraft maintenance engineers in India passing out of a 4-year diploma course knew some theory but usually would have zero to very little practise on actually opening up an aircraft. All thanks to an incompetent & worse regulator, the DGCA. To say that an airliner is a complex piece of machinery is an understatement. We ran our own on-the-job traineeship in collaboration with one institute which we deemed good so that these kids could spend real time on an aircraft under the guidance of my experienced supervisors and clocked in about 12 months of floor time before their course got over. After that we would recruit some of them and put them through another two years before they were really useful. During those two years co-incidentally they received a stipend of Rs 25,000 a month! After that over 3 to 7 years type rating certifications would follow.

Investing in expensive OEM training and retaining jumping jacks is another story altogether. Judgements of the honourable Supreme Court act as the best dis-incentive for all of Indian industry to invest in deep & expensive training of competent employees to the detriment of both. Europe & UAE had saner laws and that's where I took my business and hangars.