Wednesday, May 21, 2014

Career Opportunities and Salaries in Post Liberalization Era in India!

India had been a country which followed the socialistic pattern of economy ever since it got independence way back in 1947 till its economy got partially Americanized some time in the Nineteen Nineties. The period before 1990's is called the pre-liberalization era and that afterwards till date could be called the confused era of liberalization.

In the pre-liberalization era of administered socialism, the salaries of all employed people in India were governed by certain limits mandated by governmental directives. No person in India was allowed to draw a salary more than what the President of India got in those days. Rs.10,000/- per month was that sacrosanct figure. In those days it was also mandatory for the government and the private sector companies to publicly announce the details of salaries that they paid to their respective employees.

All employment advertisements from the government and the private organizations routinely announced salient details of the salaries. It was easy for any one to actually know how much an employed person legitimately made as salary. What was not known to the general public was the legal income of businessmen and the illegal income of salaried people especially those employed by the governments.

One of the remarkable achievement of the government of India in the post liberalization period was the removal of the sacrosanct limit of salary for the private sector. I consider this event remarkable because this was done by the bureaucrats of India without raising much protest as their own salary remained lower and limited.

The liberalized government also allowed even loss making private company boards to fix limitless salaries for some of the key members of their own boards, a much liberal rule that allowed many small companies getting drained of their initial and working capitals too soon to become non-existential. 

Post the so-called Y2K digital confusion of year 2000, the software and IT enabled companies of India got enormous opportunities to get dollar remuneration from the USA due to the high IT-outsourcing trend that this country adopted. This enabled many Indian companies who earned their incomes from the dollar economies to pay higher salaries to their Indian employees. 

Then developed the age of private industry opportunism and favoritism in the guise of market forces. As the government did not enforce any thing with regard to the salaries of private sector employees, the initial euphoria of high salaries in private sector soon died out with the majority of private sector employees earning much less while a few of their top favorite managers earned incomes disproportionate to their real contributions. The Indian private sector has degraded as an organized system of exploited managers as many of the white collar private employees are designated as officers or managers without any collective bargaining power. Besides, the private sector pay have been becoming more and more secretive as the employees seldom realized the pay and perks of their colleagues and seniors. 

As such a few of the Indian private sector began to mimic the elite corporations of the USA and such other developed nations where salaries are determined by the educational elitism or educational branding of their managers rather than their actual worth and contribution to the company. Some board level and below board level managers got the opportunity to draw salaries unimaginable by many in the world while the majority of their employees slogged for their respective companies to keep them going without getting even a minor fraction of such high salaries. However, a good majority of Indian private sector in the manufacturing and production fields struggled hard to make income and to pay even some comfortable salaries to their employees and managers as they were all required to play in an uneven ground.

In the mean while, the government officers and those in the government got the opportunity to compare themselves with their elitist private sector companies. The consecutive pay commissions began to take some cue from the private sector average remunerations and began to fix the government officer's salaries. Since this was mostly on the basis of some average, the top government officials could not earn exorbitant salaries. However they have done many other things to compensate their so-called low salaries. Now many of them fly quite often to foreign lands, travel in chauffeur driven luxury cars, have government paid servants at home and office and have many comforts and facilities that their counterparts in private industry do not have. As they are the administrators, executors and interpreters of rules and policies, private industry big wigs often Que up to meet them which indirectly provide many benefits. 

Governments-both central and states- own many public sector companies. Some of them are large and key economic drivers and contribute significantly for the economic well being of the country. A few of such companies had been privatized in the past with the government selling of the majority stake. However, a large number still remains with government as the majority stake holder. Such companies have government nominated boards but are actually run by company officials and managers who are generally recruited by the concerned company. They are called the PSU officers and managers. The PSU officers are deemed public servants with all the responsibilities of public servants, but with hardly any defined authority. They have been a disadvantageous group with regard to their salaries and perks for the past many decades. Only in the recent past, their salary scales have become comparable to that of their counter parts in the government. However, excepting a few, the majority of them are never given any opportunity to prove their skills and professional competence. As their career advances, most of them degrade as 'frogs in the well' due to various reasons which could be a topic of research for any one interested to find the truths. However, the public sector had been the poaching ground for experienced professionals for the growing private sector initially.

As the governments could not take any decisions regarding the future of the public sector companies with regard to the question of they be privatized or not, the public sector companies of India suffered much with regard to their succession planning . As a result, there have been practically no recruitment of officers and workmen in the PSUs for the last several years. Many PSUs now have very senior officials drawing secretary level salaries waiting for their retirement in a couple of years and working too independently. They have no subordinates whatsoever under them. PSUs of yester years which used to simmer with many fold economic activities in the past with thousands of employees have closed down many of their activity centers and losing their collective experience and expertise. Many of them are just waiting to be closed down as their experienced people are getting reduced in numbers with time. When all around the world governments are trying hard to generate employment to their citizens, India with its highest unemployment levels, is undetermined about the future course of actions with regard to the huge industrial infrastructure it had created in the past in the public sector.

Now coming back to the salaries of officers and managers of India. It is difficult now to get clear idea about this. But with some research I am giving some idea about the salary and perks of officers and managers working in India in private sector, public sector and government (The salaries given are approx gross p.a) :

Category                Indian Private Sector     Indian Public Sector   Indian Central Govt 
Entry Level Officer          Rs.0.2-0.6 Million      Rs.0.4-0.5 M         Rs.0.3-0.4 M    
(1-7 yrs)
Entry Level Mgt              Rs.0.5-1.5 Million          -Do-                         -Do-
(1-7 yrs)
Middle/Sr Mgt                         -Do-                 Rs.0.8-1.0 M        Rs.0.8-1.0 M
(7-12 yrs)
General Mgt                    Rs.1-5 Million            Rs.1.5-2.5 M        Rs.1.5-2.0 M
(12-25 yrs)
Top Mgt                        Rs.2.0-20 Million        Rs.2.5-3.5 M         Rs. 2.5-3.0 M
(15-35 Yrs)

The career growth in central government is smooth and steady with seniority playing the major factor. For top postings political patronage is essential. 

In the PSU's both seniority, luck and mentoring by seniors do the magic of career growth up to general management levels. Bureaucratic and political mentoring are important for CEO levels and board level postings. Salaries are a bit better for the officers and managers of large central PSUs. However, they have comparatively not much opportunities for proving their abilities. Their public image and status is also not very charming except for some top management positions.

The pay, perks and facilities of private sector officer and  management career depend on the type and size of industry coupled with the mindset of its management board or promoters. The variations are too high. While some get extremely high salaries and perks, a good majority are underpaid when compared to their work loads. The private sector job is secure only when it is doing well financially. The internal politics in some private companies are too high that people with a straight forward mind might find it too difficult to survive. Hence, most private companies have a high attrition rate. Since the government has not yet openly allowed the hire-and-fire policy, many companies resort to retrenchments in a clandestine manner. Indian private companies are yet to learn the benefits of retaining their managers! While a few managers of Indian private companies are able to get pay and perks many times more than their counter parts in the PSUs and government, there are also millions of them without ever enjoying such benefits. It is also common that the promoters appoint themselves to key positions with extremely high salaries which professional managers cannot even dream of.

Except for the civil services of the government, there is no regular intake of officers either for the Indian PSU and private sector. The recruitment in both private industry and the Indian PSUs are done with no long term vision or planning. At entry level, either they recruit in large numbers or refrain from it for years together. As a result, the career growth and experience opportunities in many private and PSU companies are not so motivating for many of their managers.

In the government, there is a periodic system called the Pay Commission to revise the salaries of the central government officers. In the Central PSU's such an arrangement may or may not be adopted. In the private sector such a thing is practically absent. Unlike the private sector, reservations play and important role for the selection and promotions in the government and PSU jobs.

Government and PSU jobs may not give much satisfaction to one's job due to many factors. High individual performance and competency may sometimes cause career shocks. However, in the private sector, individual performance and competency are mostly recognized and rewarded. 

In the overall analysis, as things stand now, private companies of good track record provide the best career options and job satisfaction. The least of it as of now could be in the PSUs.  

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