Special Correspondent

`The exorbitantly high salaries demanded are posing a threat to the viability of companies, especially in services sector'

Bangalore: Industry surveys related to salaries in major cities in the middle of the year ranked employees, especially in the technology sector in Bangalore, among those drawing the highest pay packages.

There was correspondingly high employee turnover compared to other cities such as Chennai.


The biggest challenge before most businesses today, be it IT, BPO, services or the manufacturing sector, is the attrition rate and the related cost of hiring and training new hands. While this has been a serious concern to industries all over the country, it is more so in Bangalore as the city leads on the attrition index and is causing worry to managements, according to the Bangalore Chamber of Industry and Commerce (BCIC).

BCIC chairman Venkat Kedlaya says, "With competition mounting and reduced profit margins in some sectors, the exorbitantly high salaries demanded are posing a big threat to the viability of companies, especially in the manufacturing and services sectors."

The BCIC, which claims to represent 90 per cent of the corporate sector in Bangalore, has decided to address the issue with a view to helping its members and industry in general in terms of suggestions and ideas to enable industry sustain itself in these difficult times, he says. As a first step, the BCIC has engaged a "compensation expert" to do a salary survey in different sectors to analyse sector-wise compensation packages.


The chamber is planning to invite all its members to a related seminar in February. The member companies can then consider all factors involved and take them into account for their salary revisions in the next fiscal year.

For more details, the BCIC can be emailed at bcic@bccic.org.in.

Industry observers have noted the phenomenon of even young persons with technical qualification increasingly gravitating towards the BPO/call centre sector because of the boom in jobs and high starting salaries.

This in turn may have made it difficult for the manufacturing sector to find technically qualified new hands.

Since the salary packages in the manufacturing industries are pegged to variable and fluctuating factors such as market demand and competition, they cannot always match the salaries given by BPO companies.