MNCs pay higher wages to Indian staff

MNCs pay higher wages to Indian staff

New Delhi: Multinational firms often pay their Indian employees relatively more than staff in other geographies, according to a study released earlier this week by human resources consulting firm Mercer Llc.

The report, titled “Compensation Practices in India 2008", found that while the Indian arms of global companies turn to local market surveys to set Indian salaries, they usually position themselves as employers that pay above industry averages. Specifically, the report found, these firms target the 65th or 75th percentile of the salary range, rather than the middle, which is the norm in most other countries.

“We found (firms) were willing to be more aggressive in positioning themselves in markets that were growing very fast," says Gangapriya Chakraverti, business leader at Mercer who worked on the report, which surveyed 76 firms across industries. This phenomenon, she says, applied most often to information technology companies, and specifically when they were looking at expanding their India operations.

Since salaries in many industries have jumped by 15-20% each year, the goal of the study was to understand the rules behind such increases, says Chakraverti. “We thought companies are fairly ad hoc in the way they manage compensation...," says Chakraverti, “but most policies were laid out, and while they were governed by global principles, global companies will customize principles that were unique to the market."