The Indian IT and IT-enabled services (ITES) companies are doling higher rewards and cash to attract and retain employees, says a study.According to Total Rewards Management Study, jointly conducted by Nasscom and Hewitt Associates, almost half of Indian IT and ITES companies given higher compensation than market average to attract and retain employees. In an industry characterised by high attrition, performance based hike among IT companies were reported to have grown by 23 per cent.‘‘In an environment marked by high employee turnover and attrition, companies are introducing innovative methods of attracting and retaining talent,’’ said Nishchae Suri, Hewitt’s India business consulting leader. The study showed that as many as 91 per cent of IT companies and 97 per cent of ITES companies benchmarked their compensation against the market. Mumbai was found to be the most expensive city in India in terms compensation for ITES companies, while Bangalore was the most expensive city for IT companies by being 17 per cent higher than the average. Regarding salary hike, the study noted that a jump in the average salary increase to 15.2 per cent in 2003 from 12.2 per cent in 2002 in the ITES companies and to 14.5 per cent in the IT companies from 12.9 per cent for the junior management level. However, with rising rewards, variable pay plans in the industry have also gone up by 18 per cent compared to last year while performance based hike in the IT industry went up by 23 per cent. Companies are doing this to drive business results, the study pointed out.It also said that IT and ITES industry companies have a very high cash orientation compared including basic salary, cash emoluments to other traditional industries with a cash to benefit ratio of 75:25. Other benefits such as loans, conveyance and housing have gone down. An 18-20 per cent point reduction was reported in company car programmes in the IT and ITES industry while loan benefits to employees have declined by 5-15 per cent.On the study results Nasscom’s Vice-President Sunil Mehta said, ‘‘IT industry employs 6,50,000 people, and it is therefore essential that companies in the IT sector devise the right compensation and rewards mix in order to attract and retain talent.
