What is variable pay in India

Wages and Salary Development in India

A Commentary on Median Income, Wages & Salaries in India.

The average annual gross wage in Germany is just over 30,000 euros. This number already gives a good and realistic feeling for that Average income in the Federal Republic. The answer to the question "what is the average income in India" is much less meaningful. In purely mathematical terms, the arithmetic mean in India is the equivalent of only 1,000 euros!

Actual labor costs in India

But don't be fooled. This value does not allow any conclusions to be drawn about the wage level in India. The wages of the broad masses of farm workers, day laborers and unskilled factory workers of z. Sometimes only a few cents per hour, the salaries of highly qualified workers with several years of professional experience are compared. These have already reached a considerable level in some industries.

Since highly qualified specialists are rare, they get paid for their work accordingly. "If expert knowledge is required, which only a few skilled workers in India have, in exceptional cases you even have to pay" cross-European "wages," says Werner Heesen, head of the "Personnel Consulting" department at Dr. Wamser + Batra GmbH.

A supposedly low wage level has long ceased to be a reason to settle in India. In other Asian countries the personnel costs are significantly lower!

Average salary India

There are significant regional differences in income. The highest salaries are generally paid in the big metropolises: Mumbai, followed by New Delhi and Bangalore. There is not only the highest demand for qualified personnel here, but also the highest cost of living. Therefore, different salaries for the same job with comparable qualifications are common even within a company at different locations. With greater distance to the (large) cities, incomes also decrease (exponentially).

There are also large differences in wages depending on professional experience or hierarchy level. An example: As a graduate (a so-called “fresher”) from a technical university, you earn a starting salary of perhaps less than three hundred euros per month. After three to five years of experience, however, you can already count on twice as much. If at some point you are a project manager with around ten years of experience, you can bring it to 1,500 euros; correspondingly more in management positions. Managing directors have annual salaries of 50 to 100,000 euros.

Economic dynamism and high inflation rates led to annual wage increases of over ten percent, even for lower and middle salaries; 15 to 20 percent per year in management positions is not uncommon.

Further specialist articles on the subject of human resources in India

The salary & its components

However, the base salary often only makes up part of the gross salary. There is a clear trend across all levels towards the payment of variable salary components linked to operational success and direct personal performance. These performance-dependent salary components are particularly pronounced in sales. However, there is an annual bonus in almost all jobs; this is partly even regulated by law.

For executive employees, the allowances represent a significant part of the salary. Often they make up half of the salary. The so-called "Allowances" can include, in addition to the performance bonus, the total or partial financing of the accommodation costs, medical care for the family, insurance and pension contributions, a company car including a chauffeur and the assumption of the costs for domestic workers, the fees for the private telephone or the Travel expenses for the whole family to the hometown. In the case of highly qualified top employees, the bonus package often decides whether they will stay in one company or move to another.

It is extremely difficult for foreign investors to obtain reliable information about how much potential and existing employees are worth in order to be able to judge who is overpaid or underpaid or which salary increases and bonuses are appropriate.

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PS: More about wages and salaries in the Indian IT and software industry can be found on the website of Indian economy

Wamser2014-09-18T10: 05: 10 + 02: 00