Are IT guys paid more than what they are worth of?

I have been hearing such weird complaints from many people that IT employees are getting paid more than what they are actually worth of! Of course, only those who work for non-IT industries come up with such complaints and especially those who are in manufacturing sector.

I feel that this is a complete non-sense! How can they say that people are being paid more than their worth? Are the IT companies run by some idiots who don’t know how to assess the value of its employees? Are they just paying these people for sitting in AC rooms for 8-10 hours (more than that in all servicing companies!) ?

I do agree that for ‘similar’ qualifications, an IT guy would be getting paid more than a manufacturing guy. So, this DOES NOT mean that the IT guy is paid more than his worth. It CAN be said that the manufacturing guy is being under-paid.

First of all, we need to see the entire picture. Not just comparing the salaries in INR! In India, 90-95% of the IT companies are servicing companies. And only the rest is product companies but again, these are not entirely owned and operated by Indians. There are only a handful of IT companies which are owned and operated by Indians for Indians completely. And actually nobody talks about them! They don’t even know such companies exist 😉

These foreign companies from US and Europe are actually giving the work to Indians and set up Indian operations only because India is CHEAP. Indians will do the same work in the same way as their country citizens or maybe even better for a lesser pay. That is the reason they come here. So, as a matter of fact, the IT guys are being underpaid when compared to their ‘ON SITE’ counterpart. The point is this lesser / cheaper pay is more than enough for us to lead comfortable life. Which means, Indian economy is bad. IT guys can’t help it. And as, I said, they are underpaid actually!

These foreign IT companies do not really care about few hundreds of Euros or USD even if it is ‘extra’. Its like ‘tips’ to them. We don’t give tips after analyzing the complete history of the waiter and we don’t give away our salary as tips. We give it because, it does not matter much to us and it would make the waiter happy! If at all these foreign IT companies pay extra, it is just like TIPS only. But such minimal tips in EUR or USD means a lot to us as INR. So, these companies do not actually pay more. They pay only that much with which they make huge profits. It is not an even share at all when compared to the American/European employees of the same company! But still it becomes WIN-WIN situation because, 1EUR = 65 INR and 1 USD = 50INR. The fact is, if this situation changes, then even IT guys will be switching their industry! When the recession was at its best in US, didn’t the Indians flew from there and tried to find better jobs here?

And the Indian owned servicing companies are also operating more or less the same way because they do work for some other US or European company again. They are not creating a new product for Indian market! The few companies which do that, wont be paying a comparative salary. And there are not that many such Indian owned product companies to talk about now..

And coming to the manufacturing sector and other non-IT companies, they are owned by Indians and ‘mostly’ operated by Indians for Indians. Even if they operate for other countries, it won’t be making huge profits or so. So, they can’t afford to pay that much because our economy is not booming that much!

Basically, the employees are paid based on how much money the company makes. So, some share of the company’s profit is only shared with the employees. And that share will not affect the total profit for the company. It is actually an investment made to sustain profits. If company makes huge profits, then it can afford to pay high. If the market for that company is ready to pay that much, then the company can invest more – pay more to employees.

So, in one way, it is true that manufacturing sector people are under-paid. But it is not at all true that IT sector people are overpaid. As I mentioned, they are actually underpaid. If a situation comes when INR is comparable with that of USD or EUR, IT sector wont be as popular as now! 😉

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