Demand for cost control will force R&D centers in India to put a check on salary escalations for the next couple of years: Zinnov Study

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) March 10, 2010 -- Santa Clara, California, March 10, 2010: – Zinnov LLC, a leading management consulting firm, today released its most sought after annual report on compensation titled, ‘Compensation and Benefits Study 2010’. The study targeted at the MNC R&D centers in India brings to light how Compensation & Benefit is shaping up post-recession and what are the global changes and their impact on centers in India.

Setting stage, the study revealed that the R&D spend growth did go down significantly in the last 24 months wherein major verticals such as software/ internet, telecom/ networking, semiconductor and industrial automation witnessed a downward slip of growth by 5 to10 percent. However, while the economy is starting to show signs of upward movements, the recovery in the R&D growth has so far been only ‘minimal’.
The report said that the diminishing cost arbitrage due to historic salary increments and overheads caused due to productivity differentials and inexperienced talent pool will be a cause of concern for the R&D fraternity this year. Centers in India would need to react to this by optimizing on the salary hikes for the current year and there on.

Talking about the report, Mr. Pari Natarajan, CEO, Zinnov LLC, said, “As the cost pressures continue to exist, we foresee companies trying to execute more R&D work at the same or even lesser budgets as compared to last year. Companies would be forced to focus on new growth engines in the form of emerging markets (such as India and China) and newer technologies (such as SaaS/ Cloud). This will fundamentally push all R&D centers to deliver higher value and higher productivity at lower costs”.
“We also see that this demand for cost control will indeed force R&D centers in India to put a check on the salary escalations for the next couple of years”, he added.
The study highlights that the industry will see an average salary increment between 6 to10 percent this year based on its growth at the India center and global performance of the business It adds that companies will be forced to offset low hikes by creating more responsibility areas, increasing ownerships and defining attractive career path to retain critical resources.

Zinnov does not expect the average attrition figures for the year to go beyond 9 percent. Hiring will continue to be slow and selective, highlighted the study. Campus hiring will be slow as deferral hiring from last year resulted in late joining for many freshers, it added.
Timed to the launch of this report Zinnov is hosting its annual global conference on Globalization titled “Confluence 2010”.
Confluence 2010 will be held on March 17 and 18, 2010 at Santa Clara, CA. The event will stretch across two days of insightful panel discussions and keynote sessions, exploring patterns, challenges faced and best practices pertaining to globalization. The attendees of the conference will receive complimentary copies of the executive summary of the Compensation and Benefits Report.

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