India: Low remuneration helps attract FDI
A study by salary benchmarking site Emolument.com show that even the country’s best-paid employees earn three times less than their UK counterparts.
A study by salary benchmarking site Emolument.com show that even the country’s best-paid employees earn three times less than their UK counterparts.
India’s high corporate tax has not deterred foreign direct investors (FDIs) flowing in the country, reports Emolument.com. The salary benchmarking site reports that macroeconomic and political stability along with low-cost labour makes it an attractive destination for corporate expansion.
With the government’s launch of the ‘Make in India’ initiative and the country’s inclusion in EY’s attractiveness for investment survey in 2015, Mmolument.com has issued data on its remuneration landscape.
The site analysed 3,071 salaries in India and the UK to quantify the difference in pay. It found that strategy consultants and risk professionals in the financial sector are the best paid employees in India, yet still earning three times less than their UK counterparts. The compensation gap widens in the IT sector with Indian senior developers making five to seven times less than they would in the UK.
Graph 1. & Table 1. Showing Median Salary & Bonus
The large gap in IT: Senior software developers earn 5-7 times more in the UK compared to India. Being a software developer in the Financial Services pays the most in both countries compared to other sectors.
Risk it to get the biscuit: Risk professionals are relatively well remunerated in India with pay ‘only’ three times less than their UK colleagues. Again, finance offers the highest earnings compared to consulting. Highly incentivised, Indian staff earn large bonuses: Risk professionals in the financial sector are paid bonuses amounting to 12% of total compensation, similar to 11% in the UK. As for risk management in the consulting industry, bonuses are respectively 8% and 3% of total pay.
The highs and lows of consulting: Strategy consultants earn the most in both countries and their bonuses are at 6% (India) and 8% (UK) of total compensation. IT consulting and audit consultants’ compensation is on the lower end of the pay range both in India and the UK.
The cost of living in India is one of the lowest globally, while the UK is one of the most expensive places to live,” said Alice Leguay, co-founder and chief operating officer (COO) at Emolument.com.
“This can partly explain the difference in salary. However with ever-increasing imports, Indian purchasing power is likely to be pushed down. Global companies in the meantime are outsourcing more and more of their non-client facing activities to India (amongst other countries) making huge savings on staff costs.
“We expect this phenomenon to increase as companies across all industries recruit highly educated technical staff locally to deal with key value-add processes such as research and analytics.”