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Executive Summary

Ten years have elapsed since the Indian government enacted economic reforms, effectively bringing one-sixth of the worlds population into the global economy. Although the reforms have made the business environment decidedly more open and manageable than it used to be, developing a successful human resources strategy, including recruiting, managing, and retaining employees, can still be tricky.

Finding talent in India can be incredibly difficult. While there are a number of under- and un- employed high school and college graduates in India, generally these individuals are not trained with the skills needed by multinational employers.

In addition, some Indian candidates with strong skills may not fit the needs of multinational employers because of the historical variations in work practices from those found in the West. In other words, while at some levels and in some industries there are many candidates with the technical skills to fill a position, they may not have the cultural skills to fit in with an organization.

Finally, there is a shortage of talent at the upper end of the employment scale, particularly in IT. There simply arent enough candidates with the necessary experience to fill top roles. Seasoned professionals are often in short supply. Turnover levels have gone up in many industries, including IT and IT enabled sectors and to a lesser extent in advertising, marketing, and retailing. Though still below the rate of comparable industry segments in the West, turnover can be a problem, as economic growth, increased salaries, and a shortage of skilled employees at the top of the scale can tempt the best and the brightest to change jobs often.

As a result of this shortage, salaries have risen dramatically in high demand sectors, especially at the upper ends of the scale. In addition, salaries in India account for less than half the value of a typical compensation package. Benefits like rent-free or concessional housing, free use of motor vehicles and/or drivers, interest subsidies on loans, and the like may all be part of a total compensation package.

Finding and keeping the right employees requires a multifaceted strategy. Good pay and benefits simply arent enough; keeping employees also requires companies to address less tangible factors, such as rewarding work experience and the possibility of advancement. Most multinational companies in India, as well as major local enterprises are already addressing this issue through fairly evolved HR practices.

Overview of Indias Economy

There was a time when foreign CEOs wouldnt even consider doing business in India. Between meddlesome economic policies (including restrictions on foreign investment), low education levels and corruption, India just wasnt an appealing place in which to invest. As growing foreign investment suggests, this is no longer the case. To be sure, conducting business in India is still fraught with difficulties, but Indias economy and business environment have come a long way in the last decade.

The improvements began in 1991, when the Indian government initiated a set of economic reforms. Specifically, it lowered trade barriers, devalued the rupee, reformed the financial sector and removed cumbersome licensing barriers on all but six strategic areas of the economy. It also began to encourage direct and portfolio foreign investment.

The results were impressive; Indias GDP grew by about seven percent a year during the mid-1990s. Although GDP is this year expected to slow to around six percent, this still makes India one of the worlds fastest growing economies. While some of this growth has been swallowed up by the rapid growth of Indias labor force, there is little doubt that the availability of consumer goods and durables and the overall business environment in India have improved dramatically.

Indias most widely touted success is its Information Technology (IT) industry, which had ballooned into an $8.7 billion a year business by 2000, led by globally competitive companies such as the NASDAQ-listed Infosys. According to the National Association of Software and Services Companies (NASSCOM), India will export about $6.3 billion worth of software to nearly 95 countries around the world this year.

Source: NASSCOM Figures

Foreign companies, already well aware of the cost advantages of doing business in India, have rushed in to take part in Indias IT industry. In fact, NASSCOM reports that more than a third of Fortune 500 companies have outsourced some of their software requirements to India.

But IT is by no means Indias only success story. Mumbai-based commercial banks ICICI and Housing Development Finance Corporation (HDFC) are among Indias best-managed companies. And several magazines, including Forbes Global and the Far Eastern Economic Review rated Hindustan Lever, Unilevers Mumbai-based subsidiary, as among the worlds best consumer household products companies.

The World Bank reports that even some of Indias notoriously inefficient public utilities have been opened up to competition, resulting in improved service. Indias public telephone provider now competes with private telecommunications services, and more than 1.1 million cellular phone subscribers now receive service through private companies.

Difficulties remain in some areas; however, Indias economic reforms have helped to attract unprecedented levels of foreign investment. According to the Indian Reserve Bank, Foreign Direct Investment (FDI) mushroomed from almost nothing prior to 1991 to $3.5 billion by 1998. However, this seems less impressive when compared with FDI in China, which stands at just under $40 billion annually.

Foreign Investment in India

Year	A. Direct Investment	B. Portfolio Investment	Total(A+B)
1990-91	97	6	103
1991-92	129	4	133
1992-93	315	244	559
1993-94	586	3567	4153
1994-95	1314	3824	5138
1995-96	2144	2748	4892
1996-97	2821	3312	6133
1997-98	3557	1828	5385
1998-99	2462	-61	2401
1999-00	2155	3026	5181

Source: Reserve Bank of India

Despite its substantial gains, India is still a very poor country with a per capita GDP of just US$2,200 when calculated using Purchasing Power Parity, making the average Indian poorer than the average Zimbabwean. Social indicators paint a revealing picture. Much of India is without telephones, and electricity. According to this years CIA World Factbook, literacy in India stands at a miserable 52 percent. And while growth in Indias service sector has been strong, growth in heavy industry and manufacturing, which could provide badly-needed unskilled jobs for Indias poor, has not been as impressive.

While GDP growth is expected to top six percent this year, the short-term economic outlook is unlikely to be as promising as in previous years. Sluggish economic growth around the globe, led by faltering US markets, is likely to have a negative impact on Indias economic growth.

For the foreseeable future, India is likely to remain crowded and poor, and will thus remain, at the very least, a complicated place to do business. Reforms have nevertheless put the fundamentals of strong long-term growth more firmly in place, and as its economy continues to open to competition and foreign investment continues to come in, India is likely to remain an attractive, cost-competitive place for foreign companies.

Hiring Professionals: An Overview

In short, multi-nationals are attracted to doing business in India because (1) labor is cheap and thus India is a low-cost manufacturing and production base for other markets, and (2) they want to penetrate the local marketplace. Although junior and middle level professionals are paid substantially less than in western countries, the quality of their work is often comparable, allowing companies to increase their profit margins.

The catch is that finding and holding onto these professionals isnt a simple task. Long-term structural developments in human resources lag behind economic growth, resulting in shortages of trained workers in some segments of the economy and a glut of under- and un- employed professionals in other parts of the economy.

Compensation

Prior to the 1991 economic reforms, government restrictions mandated that monthly salaries for senior executives could be no more than Rps 15,000 (about $320 in todays dollars). The government relaxed this policy in 1993 and 1994, and today there are few restrictions on remuneration at the top end of the scale. Most companies are now allowed to create appropriate compensation packages for their managing director and directors within the a limit of 5% (if there is only one director) or 10% (if there are multiple directors) of the firms net profits.

Although pay in India is considerably lower than in Western countries (and even some developing nations), shortages of skilled workers (especially in IT) have led to dramatic pay inflation. This is due to a combination of factors, including rationalization and re-evaluation, entry of more multinational companies (increased demand for certain types of skilled labor), and global worker shortages. Salaries in some sectors of the economy climbed at a staggering 40 percent annually during the mid-1990s. Since then, the Asian financial crisis and the IT slowdown have caused the economy to cool off, with the job market following suit. Consequently, pay increases have slowed markedly over the past few years, although average salary increases continue to significantly outplace the inflation rate of 6-7%.

Average Salary Increase (%) for Management in India, 2000-2001

INDUSTRY	2000 (%)	2001 (%)
Information Technology	25.9	10.0
Hotels	19.8	19.8
Diversified	17.8	19.5
Consumer Products	17.1	15.5
Engineering	15.8	14.0
Pharmaceuticals	13.8	14.9
Others	14.5	15.2
OVERALL	17.1	16.0

Source: Watson Wyatt Worldwide

The best entry-level employees with a high-tech degree from one of Indias well-renowned Indian Institute of Technology campuses can expect an annual salary of around US$14-16,000. While this sum is substantially more than it was five years ago, it seems startlingly inexpensive when compared to the $US60-120,000 offers that some of these same graduates receive from companies overseas. Entry-level employees from second-tier schools receive lower levels of compensation.

Less skilled employees and those in other industries, such as the medical transcriptionists, employed by multi-nationals who have discovered the cost-advantages of remote processing in the sub-continent, receive about $1,200 per year (this level is fast increasing), while the same job in the US would command more than twenty times as much pay (about $25,000).

Depending on the industry and job function, employees higher up the corporate ladder in middle management can expect to receive an annual salary range up to about $US30,000, amounting to far less than what the same employee would receive in a developed country or even in some other developing nations.

Source: Cerebrus Consultants

Senior level employees can expect base salaries ranging from about $35,000 to $85,000 depending on the function and the industry of the employee. Only at the higher echelons of the management pyramid does compensation start to resemble anything like executive pay packets in Western countries. For example, Multex Investor reports that Phaneesh Murthy, Senior Vice President and Head of Worldwide Sales for Bangalore-based Infosys, has a salary of US $263,132, and Azim Premji, Chairman and managing director of Bangalore-based Wipro, makes well over US$500,000. Still, these figures are well below those of the salaries of Presidents and CEOs of Western companies.

Annual pay increases

A Hewitt Associates survey of 86 foreign and local companies found that during 2000, base salary increases averaged 15.1 percent for professional, technical, and supervisory personnel, and 12.4 percent for less skilled employees. Similar increases were expected for 2001, though they may fall somewhat with the global economic slowdown. By way of contrast, salaries in the United States rose on average by about 3-4% in 2000.

Information technology, consumer, and telecommunications companies expect the largest increases, ranging from 18.1 to 18.8 percent. Banking, chemical and food companies are expected to increase base salaries from 11.3 to 14.7 percent.

Although salaries continue to spiral upward, the recent global recession has made companies more conservative in making across the board increases. Pay increases are now less likely to apply to all employees, and are more likely to take the form of performance-based incentives.

Performance pay

Exposure to the global economy has prompted a large number of Indian companies to pay employees based on their performance rather than grant across the board pay raises.

Those companies that already have implemented performance pay schemes are continuing to increase the performance component of employees total pay packages. At Bharti Televentures, variable compensation currently accounts for 30 percent of managers pay, and is expected to increase to 50 percent by 2003.

Moreover, pay raises are increasingly structured into variable portion of the employees pay packet, forcing employees to earn their raises. Exactly how much of the total package performance pay accounts for is usually a function of seniority the more senior the employee, the greater the fixed pay.

Stock options

During the Tech boom of the late 1990s, Employee Stock Option Plans (ESOPs) were particularly popular with employees at IT companies who wanted to share in skyrocketing stock prices. Reality eventually set in as Indian markets felt the effects of dissipating irrational exuberance in US markets. Many employees of overvalued technology companies discovered that their stock options had fallen considerably below their initial value.

For example, Infosys stocks are currently valued at about $47, about one-third of the $147 they commanded at their peak. Wipro, another large Indian company, has seen the price its stock price fall from a high of $68.43 in December 2000 to a low of about $18 in April 2001 to its current level of roughly $24.

The result in India as well as globally is that employees do not view stock options with the same kind of unbridled enthusiasm as they once did. Nevertheless, the companies that survived the tech crash are the ones with better long-term outlooks, and thus some employees may still find ESOPs attractive.

Benefits

The basic salary of an employee in India usually accounts for between 40 and 50 percent of the total package, partly because there have traditionally been tax advantages to receiving payment in kind. Proposed changes in Indias tax rules will make most perquisites taxable based on their cost to the employer (previously, many perquisites were not taxed or were taxed based on formulas which greatly undervalued these benefits). Going forward, changes in the tax code will present a significant compensation challenge for HR professionals in India, as simply adding the cost of previously untaxed perquisites to base salary will greatly increase the pension and retirement burden (as retirement benefits are generally based on salary).

It is unclear how exactly this problem will be addressed. However, at this time, benefits still account for a significant part of any employment package, and thus continue to play vital role in luring and retaining key employees. In addition, certain perquisites like housing, cars, and loans (companies often offer their employees very low interest short and long term loans) will continue to be taxed at concessional rates, even after the new tax rules are enacted, and thus will remain in demand by employees.

Some companies have elected to give the employee more control over how they receive their pay. Standard Chartered, based in Calcutta, has adopted a compensation model that pays employees half of their total package as salary, and allows employees flexibility to determine how they wish to receive the rest of their pay. Employees may receive additional payment in cash or in kind, as long as the cost to the company is the same.

Allowances

Changes in Indias tax laws have begun to prompt employees to move away from allowances (or company provided perquisites), which once enjoyed certain tax advantages, and instead opt for cash payment. Despite this, allowances still account for a significant part of any employment package, and are expected, to varying degrees, at certain levels of seniority.

Among the most significant benefits is housing. Employers often reimburse a portion of the rental costs of the employee in the form of house rent allowance (HRA), a portion of which is not subject to income tax.

Medical allowances may come in a variety of forms. Companies may reimburse expenditures incurred by the employee for his own or his familys medical treatment, pay a fixed allowance for routine check-ups, or undertake a group medical insurance policy.

Other allowances may cover a variety of costs, including:

Transportation 
Furniture
Appliances 
Travel 
Childrens Education
Utilities

Pay packets may also include a dearness allowance, or as it is known in the US, a cost of living adjustment. Other examples of allowances include work clothing allowances, professional education allowances, commuting allowances, holiday allowances, and the like.

For expatriates, allowances may include the entire familys airfare on home leave, and the fares of children studying abroad and visiting their parents in India. Because of poor road conditions and slow traffic, a car with a driver is generally necessary for expatriates who are unaccustomed to such driving conditions. Drivers and cars are necessary for senior level Indian managers as well.

Government mandated benefits

Though the benefits discussed above are generally at the discretion of the employer, some benefits for employees below the managerial level are government controlled. Specifically, labor laws outline mandatory retirement and long service benefits, death and disability benefits, medical care benefits, etc. For example, companies with ten or more employees must enroll employees earning below Rps 6,500 ($140) per month in an employee insurance plan. Employees contribute 1.75% of their earnings to the fund; employers contribute 4.75% of eligible employees payroll. All companies with ten or more employees must provide paid maternity leave to all female employees who have completed 80 days of continuous service in the twelve months preceding her expected delivery date. These and other laws are regularly amended; employers should make sure to keep aware of the latest changes.

Retirement benefits

The normal retirement age is between 55 and 60, with 58 being the official retirement age as defined by the government. With regard to retirement benefits, both employers and employees are required by law to contribute a minimum of 12 percent per month to a state or approved private Provident Fund (certain industries are subject to a 10% minimum). Contributions are payable only on the first Rps 5,000 (about $110) earned per month. 8.33% of the employee contribution is diverted to the Employees Pension Scheme and is kept on deposit in a public interest earning government account. The accumulation is paid out on retirement and is tax-free.

In addition to retirement benefits under the Provident Fund, the Payment of Gratuity Act of 1972 mandates additional retirement benefits. At a minimum, the Act requires payment of 15 days salary (based on the last salary drawn) for every completed year of service (or part year greater than 6 months), up to a maximum of Rps 15,000 (about $320).

As should be obvious, legally required contributions to a provident fund alone will do little to attract the best and the brightest. Instead, they should be viewed as a minimum. Better employers will also offer some form of pension scheme to their employees, keeping in mind that payments from these type of private, discressionary pension programs are taxable. According to Watson Wyatt Worldwide, most such schemes are defined contribution plans, but a number of more established companies have previously provided defined benefit type plans. Retirement benefits also usually include the encashment of unused leave accumulated by retirement.

Leave

Leave in India is usually fairly generous by western standards; thirty days annual leave is standard. In addition, there are several public holidays.

Other benefits and perquisites

Other benefits that might help to attract or retain professionals include gymnasium facilities, child-care facilities, periodical subscriptions, club memberships, insurance and loan facilities.

Companies should also keep in mind that less tangible benefits, such as the overall work environment, satisfaction of a job well done, a feeling that the employee is part of the team, and careful consideration of the employees suggestions can also contribute to workplace satisfaction. An objective appraisal system, documented personnel policies, and periodic salary comparison, as well as training and development programs are also considered important. Posting and/or training in overseas jobs is also highly desirable.

Retention

Because Indias job market is still not mature, top employees have many options. Accordingly, turnover rates are high and retaining top employees in certain industries is not easy.

As opportunities abound for the best of the best, paying employees what they are worth should be viewed as a prerequisite, not a whole strategy. The best employers are the ones who not only offer good pay and attractive allowances, but also an enjoyable and challenging work environment.

Holding onto IT talent

In a country where thousands of villages are without electricity or telephones, Indias technology parks stand out as bastions of unexpected affluence. The famed International Technology Park in Bangalore, which boasts self-contained power facilities, modern gymnasiums, food courts and other amenities, is not only symbolic of Indias middle class aspirations but is also indicative of what it takes to retain IT professionals.

Indias IT professionals may be well compensated when compared to professionals in other industries. But for IT companies, India is an inexpensive place to get things done. Major foreign IT companies, such as Hewlett Packard and Intel have opened up shop to take advantage of Indias globally competitive costs, as well as its large number of English speaking professionals with varied and extensive technology skills. Homegrown concerns such as Infosys and Wipro have added to the demand for IT talent.

Demand for Indias IT professionals is not confined to India itself. It is all too common for India-based operations to lose talent to better paying overseas competitors. In fact, this years United Nations Development Program's (UNDP) Human Development Report estimated that India loses $2 billion annually in resources because of the emigration of IT professionals to the United States alone. And while the US is by far the most favored destination for Indias outbound professionals, a large number of European countries, as well as Japan, Canada and Australia are also aggressively courting Indian talent.

The end result is that IT suffers from a larger divide between supply and demand than any other industry. The figures are startling; NASSCOM estimates that India will need 2.2 million IT professionals by 2008. The Ministry of Information Technology predicts similar numbers (2,070,000). If current educational trends hold, India will only have 680,000 professionals by 2008. Although the government appears determined to avoid this scenario, investing $1 billion aimed at tripling the number of IT professionals, shortfalls seem likely for the foreseeable future, even with sluggish world markets.

Source: NASSCOM

For Human Resources managers, this means that convincing talented IT staff to remain with the company and to remain in India requires a special effort. As IT professionals are generally well aware of their market value, adequate compensation, perquisites and allowances are vital. Infosys, for example, increased salaries by 30 percent in 1999 and by 16 percent in 2000.

The most favored employers will make a significant investment in training the employee. Although some might contend that training might simply make the employee more saleable, it is equally likely to breed employee loyalty. This is especially true in the IT sector, where skills quickly become dated and employees need constant retraining in order to remain current. Indeed, a Business Today / Hewitt Associates study rated Infosys, a company that puts all of its junior employees through a three-month training program, the most favored employer in India. All good companies provide other facets of employee development, including skills upgrade training and personal development programs on a regular, on-going basis.

In addition, maintaining job satisfaction through variation of duties is important to ensure that employees dont simply leave out of boredom. New Delhi-based Hughes software, for example, has initiated an internal placement program that helps employees to move between departments and projects within the company. Although this has caused some logistical problems, as some projects lose valued personnel, the cost to the company may well be lower than losing the employee to a competitor.

Layoffs and Termination

Before Indian companies felt the effects of the economic reforms, lifetime employment was often standard practice. Job seekers would get their foot in the door at their favorite companies with the aim of settling down permanently within the organization. Perhaps the main reason for this reluctance to hand out pink slips was cultural there simply was no knowledge of the concept of downsizing.

Indias integration into the global marketplace has changed the rules of the game significantly. As the economy and the technology industry have slowed to sustainable growth levels, various companies have been forced to downsize in order to remain competitive.

Although corporate downsizing in India increasingly resembles downsizing in Western countries, there is residual reluctance to laying people off. A broad selection of companies operating in India, from shabby state-run enterprises to lean and efficient high-tech multinationals, prefer to use of voluntary retirement schemes to trim their numbers in tough times.

Some larger companies also elect to downsize through other methods, including deferred recruitments, benching people, and using employees for internal or community service projects.

This institutional squeamishness toward layoffs, while understandable from a social perspective, has had some negative effects. State-owned enterprises as well as some private companies are still overstaffed as a result of an unwillingness to lay off employees.

Possibly because of continuing turbulence in IT and related industries, it is the new economy companies that most closely resemble their counterparts in the West. Downsizing in IT, telecommunications, and other new economy companies is more likely to be involuntary. Instead of early retirement, IT employees are more often laid off with severance payments.

Recruiting

Finding the right person for the job is never easy regardless of location. But with economic growth outpacing improvements in education and training, finding qualified candidates to fill a position in India can be more difficult than in many places. Because of the historical insularity of many Indian companies and management, it may not be easy to find candidates with the precise skill sets needed.

Because of this developmental reality, finding the best and the brightest might require a company to adopt a multi-faceted strategy and possibly even search overseas in order to satisfy its staffing needs.

On campus

Although India has generally poor social indicators, it nevertheless has a growing number of excellent universities that turn out top-quality graduates in a wide variety of disciplines. The Indian Institutes of Management (IIM) and the Indian Institutes of Technology (IIT) turn out graduates of such high caliber, that they often receive job offers from companies at home and abroad. Other top Indian universities include Anna University in Chennai, University of Roorkee, Jawaharlal Nehru University, and University of Mumbai. As Indias second tier universities are also becoming increasingly competitive, graduates from these schools should not be ruled out as potential candidates.

Graduates are vital for filling out the junior professional ranks of most companies. Although they can be recruited through a variety of methods, including media advertisements and internet recruitment (see below), there are more direct, and probably more effective ways of getting graduates.

Most notably, prominent institutes usually have organized placement programs for graduates. Companies are often invited to make presentations, hold interviews, and recruit on campus.

Press advertisement

Vacancies at all levels can be advertised regionally and nationally through business publications as well as major metropolitan dailies and industry publications.

Because these advertisements can generate huge numbers of applicants, a rigorous selection process normally follows. This process can include anything from walk-in interviews to multi-level interviews conducted at various locations throughout the country. For junior and entry-level employees, the process may also include written tests and a psychometric evaluation.

Headhunters

Headhunters are most often used when job requirements and skill sets are hard to find and specific. There are thousands of local recruiters of varying quality located throughout Indias major metropolitan areas and larger towns. Agencies often have a collection of resumes on file for junior and middle level candidates.

For more senior-level job prospects, agencies will generally approach candidates directly on behalf of the client. Although some local agencies conduct preliminary interviews, more often they simply forward the candidates resume to the client. More professional searches are also done, but only by a handful of local and foreign firms.

Job fairs

Job fairs are yet another way of recruiting talented employees. Job fairs are a relatively new phenomenon in India, but seem to be gaining popularity. Job fairs are held in several major metropolitan areas throughout India periodically for industry-specific recruitment. Mancer Consulting Services held 5 job fairs in India in 2000 and expects to hold a total of 24 in 2001.

Electronic recruitment

Several major companies, such as Hindustan Lever, Infosys and Hewlett Packard, accept job applications through their web sites. Smaller companies without as much name recognition may have a harder time generating qualified applicants using this approach.

Several major job portals, such as Jobsahead.com and Naukri.com have also sprung up over the past few years. At present, this method only accounts for a small fraction of total recruitment, but because the cost of accessing a resume online is significantly cheaper than advertising through regular media channels, there is increasing interest in this method of finding applicants.

Recruiting abroad

Large Indian expatriate communities in many Western countries can supply candidates for jobs at most levels of seniority Indian returnees. University students, suitable for junior positions, must often return to India because their student visas expire. More experienced professionals may return to India simply because they miss the Indian way of life, their families, or out of an earnest desire to take part in their countrys economic development.

Although it is possible to recruit through internet portals and traditional media sources, finding returnees, and particularly specialized ones, is likely to be a complicated process that may require the services of a recruiting consultant. A small number of foreign staffing companies specialize in finding returnees, and may have resumes on file.

As already discussed, pay in India is comparatively low, and as such, returnees almost never return for economic reasons. Besides the reasons given above, Indian returnees may also be tempted to return home by a more interesting job opportunity or a valuable career move.

Cultural Issues

With over one billion people, accounting for roughly one-sixth of the worlds population, it should come as no surprise that India is an enormously complex country. India is not only the birthplace of many of the worlds religions (Hinduism, Sikhism, and Buddhism) but also home to over 100 million Muslims and millions of Jains, Christians, and Parsis.

India is also home to diverse array of ethnic groups, many with their own languages and traditions, and some that have spawned nationalist movements aimed at greater autonomy and, in some cases, independence. Indian society is also stratified by a caste system, which still persists despite being legally abolished. The caste system has minimal, if any influence in organized business in urban areas. Its effects are generally felt only in small towns and in social / religious circumstances. On the other hand, there are circumstances where regional biases influence recruitment. Because this social complexity can extend to the workplace, it is important for companies to take into account how cultural factors may affect the work environment.

Women in the Workplace

The fact that India is one of just a handful of countries to have had a female head of state within the last 30 years is not indicative of the overall progress that Indias women have made. Social indicators reveal massive divides between the sexes; males are almost twice as likely to be literate as females; boys likely to be better nourished than girls; and boys are less likely than girls to die during early childhood.

Within the professional world, which often reflects Indias small but growing middle class more than the country as a whole, these differences are perhaps more muted. There are many women in very senior management positions, especially in finance, HR, and marketing. Nevertheless, women rarely make it to the top (CEO level) of the corporate hierarchy, and those that do often arrive there through kinship ties to family businesses.

Indias laws are ahead of social realities in this respect. The Equal Remuneration act of 1976 requires equal payment for equal work, regardless of gender, and prohibits gender discrimination in hiring practices. A separate act also provides for maternity benefits. Despite these laws, the glass ceiling is still very prevalent within companies operating in India.

Foreign investment and economic growth have had some effect in this area. IBM India, for example, won the Friends of Women 2000 Award for its women-friendly HR policies, which include flexible scheduling and location, post-maternity benefits (including leave), child-care facilities and transport facilities for women employees working late. In addition, IBM India has committed itself to increasing the intake of women employees into the company and increasing their training and development in order to help them rise higher within the organization.

Conclusion

Because of Indias economic, social and cultural complexity, there are a large number of pitfalls that can plague unsuspecting companies. The problems are immense: Indias bureaucracy can be a nightmare, the loose job market means that finding talent and retaining it can be very difficult, and Indias poor infrastructure can cause any number of problems.

Still, for multinational corporations looking to remain cost-competitive, India represents a significant opportunity. Indians not only work for much smaller sums of money than do other nationals, they often match or exceed other places in terms of quality. Nevertheless, Indias job market is in constant flux, and companies considering doing business there should devote adequate resources to developing a sensible HR policy.

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Sources

• National Association of Software and Service Companies (NASSCOM) web site. http://www.nasscom.org/it_industry/it_industry_home.asp
• Handbook on Indian Economy 1999-2000, Indian Reserve Bank
• World Factbook 2001, Central Intelligence Agency
• Watson Wyatt Worldwide. The Multinational. May 2001 Issue.
• IIM graduates salaries go through the roof, by M D Riti, Rediff.com, March 9, 2001
• Salary information from Cerebus Consultants. http://www.cerebrus-consultants.com
• Senior staff salaries of many major corporations are available athttp://www.multex.com
  
• Employee Salaries in India Shoot Up Again This Year, January 10, 2001, Hewitt Associates Press Release
• Why Senior Management Salaries Have Gone Flat, Business Today, June 20, 2001
• Social Security Programs Throughout the World, 1999 India. Social Security Administration. and 2001 Compensation Report India. Watson Wyatt.
• Watson Wyatt Worldwide. The Multinational. May 2001 Issue.
• Human Development Report 2001,United Nations Development Program
• IT Workforce: India Feels the HR Crunch, Priya Sivakumaran, from CIOLJOBS, Lycos India
• IBMs Women Power, Face to Face, CIOLJOBS, Lycos India