Wednesday , 16 April 2014
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Wage pressure could hit IT companies- UST Global CEO

A year ago, tech companies around the world took pride in their bench strength, trusting that an ever-ready bench would be the ideal insurance to seize projects that came at short notice.

Fast forward to 2009, and benches are on unwinding mode. As compensation costs are becoming decisive factors in technology companies’ performance, a roll-back of salaries are on the cards across the IT spectrum, says UST Global CEO Sajan Pillai.

“A lot of companies grabbed (human) resources over the past few years. Most tech companies were growing at roughly 20%, so they kept an extra 30% staff on the bench for emergency, and went on to hire an additional 10% from the campus. All that wage pressure is going to tell on IT companies”, Mr Pillai told ET.

He said that the campus recruits were in such large numbers across tech companies that the companies resembled large universities. “Bulk hiring and training was the norm in IT companies these past few years, but that is unlikely to continue”, according to Arun Narayanan, Joint COO of UST Global.

Mr Pillai said that in the typical Indian operations in the IT sector, middle management salaries that have been in the Rs 70,000-Rs 90,000 range could see a winding down to the region of Rs 50,000 or thereabouts as companies aim for a cut of roughly 30% in compensation costs.

He said the days of IT companies waiting for projects were over and done with. “Clients are not going to say, here is a piece of work for you, take it. IT companies will have to approach clients and convince them of how more efficiency can be achieved through a particular solution”, Mr Pillai said.

On the emerging trends in the industry, he said off-shoring would continue to grow and that IT business would remain healthy, with the key difference that bank funding would be difficult to come by in the short term.

Source

  • http://blog.ninethsense.com/ Praveen

    No more tax sops for outsourcing firms: Obama

    News of February 25, 2009 – http://www.rediff.com/money/2009/feb/25bscrisis-no-tax-sops-for-outsourcing-firms-obama.htm

    “American firms will no longer get any tax breaks if they move their jobs to India and elsewhere in the world as President Barack Obama has decided to “restore a sense of fairness” to the US Tax Code.”

    Frustrating stories.

  • Ajith P

    UST is planning major salary cut. Is it true that UST has removed a lot of on the bench people? Anyway, even before bench people were not paid salaries.

  • Jim

    But UST is the one of the best companies to work with. not only UST all the companies including infosys, TCS , Wipro all are cutting their on- bunch strength. Its not TRUE that they cut the salary of bunch people. I know some lazy guys who is in bunch for months and getting paycheck everymonth.

  • http://blog.ninethsense.com/ Praveen

    >> Anyway, even before bench people were not paid salaries.
    This may not be true because we have not yet heard anything through media. Do you think they will sit in bench without salary? :-)

  • Hari Nair

    I wonder how one could make these kind of irresponsible and fictitious comments. This is totally fabricated and baseless!

    UST Global, since its inception in 1999, had faced the wallops in the year 2000 (dot com bust) and in the year 2001 (Sep 11), and not even a single employee was laid-off. We also demonstrated tremendous resilience, and we believed & preserved our people, who are our assets!

    Even now, during this economic downturn, we haven’t laid-off a single associate. More importantly, we are growing steadily, and the growth trajectory is profoundly significant when it’s considered y-o-y basis.

    Our financial fundamentals are strong as always, and we are going to scale-up. We have been in the global IT space for a decade now, and we are definitely here to stay for the next decade, and beyond!

    It’s time to grow up, and show some maturity than to give heed to hearsays and newsmongers!

  • Jayesh

    Well said Hari you said it. and i support praveen’s comment – can anyone imagine someone can work with out salary, even if he is in bunch? UST is the one of the stable companies in kerala.

  • Jaikumar R

    The problem is that UST has a credibility issue, since the very beginning. There is a major gap between what they say and what they do. This is the reason for public’s lack of trust in UST.

    UST is known for its poor track record of payments – be it payments to employees on time (it used to be very very bad), payment to suppliers, loan repayment to banks etc. They announced the construction of their campus, but nothing has been done for last 4 years!! Government had acquired and given 36 acres of very expensive land to UST in 2005, at throw away price, on the promise that they will develop IT infrastructure!

    When communicating to public, especially freshers, UST promise that they pay the best in the industry, but actually, UST pay, at all levels, is the lowest among similar IT companies. UST has been sending off people quietly, yet regularly. This is okay for valid business reasons, but why this hypocrisy?

    All these contribute to the poor reputation of UST. Senior people in UST know this, and this conflict within the organization is very painful.

    People in Kerala are not against companies. Companies should have the freedom to operate and they should be fully supported by the Government and the society. Some politicians and trade union leaders might shout slogans and make stupid political statements, but the people of Kerala observe and they understand. Companies like UST must walk the talk, and thus, build confidence and credibility. This is required for the sustained growth of IT industry in Kerala.

  • Mahesh

    Jaikumar, I can’t agree with some of your observations. all companies are going through a tough situation, and nobody is constructing new campus or investing in some real estate. you know Infosys better to known as a a real estate company than a IT company now.

    also the payment to the freshers – that is the main reason behind the recession. the pay to freshers needs to be reduced in order to save the industry.now a days what is happening like, Infy, TCS and all those giants are offering 25-30K for freshers ( what they are doing? are they productive for that money?). and made this trend in the industry. thus no other companies can’t survive with less packages.

    The one thing which we need to appreciate about UST is, they started a company in Kerala, where kerala considered as the most industry un-friendly state.

  • Jacob

    Anyway UST is far far better than most of the cheap small companies in Technopark who do dirty deelings with their employees. If you work there in such companies, you can really feel how it would be under Stalin’s KGB or Hitler’s Gestapo. Their HR policies really suck.

  • KPN

    Thats true, UST is the best company to work with in kerala. at least their HR policies and work culture. i also heard some bitter stories about the HR policies in some other companies in Infopark and Technopark. typical desi management style. but what i heard from my friends in UST is they are following a typical professional style, a resource can attain their maximum both in personally and professionally in UST. UST is giving more importance to the softskills and skills which can be used in business rather than just a programmer or a developer. that is how a professional is made of.

  • Indu M

    UST can be a good company, but they should fulfill their commitments and promises to gain trust of the people. Many have communicatd it in all earnestness to the UST owners, but they are different, and that is the whole issue. It is true that UST has given jobs to many in Kerala, and it should be apprecited.

    Good companies are credible ones and are founded on strong values, rather than operating in ‘Sindhi’ style! This conflict is real within UST, and is the biggest demotivator for senior managers of UST.

  • Sam

    Every company is operating differently, so the thing is UST made its name over the past 10 years, as one of the best companies to work in kerala. their management and work culture is unique and i remember, it was the dream company of many of my friends when we were in college. and still i think many people coming back to kerala to settle and work with UST

  • Hari Nair

    I find some comments and remarks pertaining to UST as highly irresponsible, imprecise and delusive.

    We are 6,000 strong software services company with presence in US, India, Europe, Middle East and SEA. We are the largest IT services employer in Kerala, and we are poised for significant growth despite the current global economic downturn.

    It is true that there has been a delay in the work on the Trivandrum Campus, however, the work has already begun, and we are on the way to built one of the best campus in the global IT space.

    I find comments on credibility, public’s lack of trust and conflicts within the organisation etc. I wonder, who are being referred to as public, and interestingly, what is being referred as grievous conflicts ? Having said that, it will be utopian to believe an enterprise with absolutely no dissonance. Anyway, these are nothing but incredulous remarks, and it is disgusting.

    We are certainly a value-based, value-driven organisation, and we have a well-defined value system in place. This has been our strength, and it has taken us this far since our company’s inception. The successes and the growth we have achieved over the years speaks and stands strongly as testimonials, and vindicate our credibility.

    I believe, apart from our workforce (our people) – the values, culture and the principles that we uphold are the key for the success tasted so far and will remain true in our journey to excellence.

    Here I am reminded of nothing but the Arab proverb; “The dogs bark but the caravan moves on”, and we continue our journey to be the best IT servies company in the world…

  • Iman Jraj

    Dear All,

    Firstlly I apologize if my query is at wrong spot…. Well I have quit TCS after 4+yrs of service in Bangalore in good terms. And by the grace of God have an offer with UST Global Chennai – System Analyst B1 as well as CTS Bangalore – Tech Lead. UST is paying me more (Rs5000) than CTS and also that my permanent residence is Chennai. I have asked council from everybody and everyone has advised me to go for CTS, but deep down I am inclined to UST. I am worried about the involuntary attrition happenning around in IT industries. Is it true about the LIFO (Last in first out) in UST. How is the pay hikes, employer – employee relationship, HR policies, Oniste Opportunties, Performance recognization, Crisis support in UST Global. I need your advise, comments and words to make my move.

    Thanks
    Iman

  • manish

    choice is yours. thus take decisions wisely.

  • velu

    I wouldnt agree to what Hari Nair have said that UST Global have not laid off a single employee. To be true what UST does is call the employee for a meeting and ask them to leave the company for no reason. This happens so quiet that no one knows about it except few.
    this have happened in Chennai center and in Trivandrum center.The reason I know this for sure is that i was the victim too but i resisted that i wont resign and they somehow manage to put me in some project. This happened last year.

  • sanal

    But recently UST is laying off people, and they says the background verification problem. It happened to one of my friends, he was working for last 2 years, one day when he came to office, he came to know that his access is taken out, and when he asked it to HR, he came to know that he is terminated, because the background verification mismatch.

    the saddest part is UST HR is not ready to give the experience certificate to him. if so an employees career will get spoiled. how he can get a job in any other company? this is the biggest injustice. in such case, from where an employee can get help?

  • surendra

    hi UST Global is very bad in giving joining dates for freshers they hav recruited
    2007 batch people who got placed in UST are not called yet
    2008 people are waiting for joining dates but still they are recruiting 2009 batch pass outs
    its more than 2 years 2007 batch has come out and more than a year 2008 batch has come out
    since we are selected in this UST, we are not allowed to sit in any other company in our college.
    after iGate came for campus interview and many lucky fellows got placed and they are now working for the past 8 months
    wat a great situation is this????????

  • Vijay

    Hi Friends,

    Can anyone tell me whether do UST Global,Chennai really have Background verification… Bcoz a gonna join there with out my relieving letter, but i’ve a fake one.. pls reply me soon………

  • Jeev

    yes UST have strict background checking in place. not only in chennai, everywhere.

  • raj

    I Completely agree with wat surendra said…….i got placed through campus in US Tech at 2007.but till now they dint call me…..but my classmates who are all got placed in other companies have joined and they got almost one and a half year salary.but still iam at home….fresher tag has gone…when my college people communicated with HR they have told them shortly they will be calling us.but only days went by….total waste to wait for this company……even other IT Companies have faced recession but they all still manage to put people atleast in bench…..i dont know why UST is doing like this n spoiling students future….

  • Bharath

    Hi,

    I got an offer in UST and also in Wipro both in chennai. Package for both is almost same. Am in a very big confusion which one to accept. Can you people please sugest me???

    It would be so helpful for me if you pleople advice me on this.

    Thanks in advance.

  • sruthi

    i got placed in USTglobal last week.. when they will call? itseems that they just recruit and not give job… Is that true?

  • sruthi

    i got placed in USTglobal last week.. when they will call? itseems that they just recruit and not give job… Is that true? do reply

  • kkm

    Sruthi, Who told you that you got placement, did you get any offer letters yet?

  • sruthi

    i just received an notification…

  • Narain

    i got placed last month in UST Global… but dint receive any notification or offer letter yet… is it a problem? It would be so helpful for me if you people advice me on this. Pls…

    Thanks in advance.

  • JK

    You can contact the HR manager, they will give you the details.

  • Narain

    i got placed through college….

  • punya

    after reading the entire comments I personaly feel we must be positive…
    nd we have to be!!!! well i got placed at ust on jan 2011.i got confirmation letter too.and it said our traing program would start by june july time frame!!!!

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