While CEOS take home multi-crore pay checks, most freshers still earn Rs 3-4 lakh a year — highlighting a widening pay gap between the top and bottom rungs of the sector.
In 2015, a cup of coffee at a standard joint in Bangalore used to cost Rs 10. Today, it would set you back by Rs 20-25 at least. The humble cuppa is just an example of what’s been brewing: in the 10 years or so, India’s GDP has grown from $2.1 trillion to $4.2 trillion, IT exports have risen from $82 billion to over $210 billion, and C-suite salaries have gone off the charts, with million-dollar payouts for IT CEOs now the norm.
For several categories of entry-level IT jobs, especially for freshers from ‘Tier 2’ campuses, however, nothing has changed. For them, salaries in the range of Rs 3 lakh to Rs 4 lakh per annum (roughly Rs 25,000to Rs 34,000 a month) are still the norm. At the very bottom of the pyramid, it’s almost as if time has stood still.
SALARIES FROZEN IN TIME:
When Rohit P started out as a software engineer in Noida about 10 years ago as a junior firmware developer in Frog Cellsat, his yearly salary was Rs 2,75000 ( a shade less than Rs 23,000 a month). It was difficult to cover all the expenses and he also had a student loan to take care of. But made do somehow, sharing accommodation with his sister to split the Rs 12,000 rent and stretching to meet other costs.
Shruti R had a similar experience as a trainee in Tata Consultancy Services (TCS), Bangalore 10 years back. It was difficult to manage even a Rs 6,000 rent, not to mention other living expenses, with a yearly salary of Rs 3 lakh.
Cut to 2025, and it’s a case of copy-pasted CTCs. When Ashish S was offered a job as a project engineer straight out of college, it was at a compensation of Rs 3.5 lakh per year. Similarly, Akanksha S was offered the role of a systems engineer by another big IT company at a salary of Rs 25,000 per month for six months training, and the promise of Rs 30,000 after completion of training. And many of them have to work out of metro cities, where costs have surged.
Late last year, former Infosys CFO Mohandas Pai criticized IT services companies for the massive disparity in trends between the top and bottom ends. He said fresher salaries had risen by barely 15% between 2011 and 2024, from Rs 3.2 lakh per annum to Rs 3.5-3.7 lakh, but median pay of top IT CEOs had surged by 160% in just the previous five years.
LOTS OF ENGINEERS, FEW JOBS:
A surfeit of engineering graduates, combined with a slowdown in the IT industry, has translated into lower bargaining power for freshers, which helps organizations find and manage IT talent. “One way of improving freshers” salaries may be through bridging the skills gap, and promoting high-value IT services.”
A senior HR (human resource) professional at a marquee IT services firm had another take; a huge drop in the rates that IT services companies charge their foreign clients. He said the average billing rate from foreign clients had halved to $20 to $25 per hour, from around $ 40 a decade back. That’s because of intense competition, automation, and the commoditization of a lot of IT services. “The only reason we were able to still retain our profit margins is because the rupee has also fallen in the past decade from about Rs 62-63 to a dollar to the current Rs 85 or so, and because we are able to hire from the bottom at lower salaries.”
Today, billing rates for entry-level hires from premium colleges range from $20 to $22 an hour and can rise to $35 to $40 for skills in newer technologies like cloud, data, and for roles such as full-stack engineer.
Some expect that the increased adoption of AI in the workflow will further reduce the billing, rates of traditional IT services, such as application maintenance and development and infrastructure management services, to $15 and $18 an hour.
Offer letters in recent years are evidence of the stagnation in salaries, particularly for those graduating from Tier-2 colleges. Infosys offer letter indicates a Rs 25,000 monthly gross salary for trainee system engineers, with Rs 23,328 take-home pay, at a total of Rs 3 lakh annually. This offer letter stipulated an 18-month probation, with a Rs 1 lakh penalty for early departure.
Cognizant recently offered Rs 2,75,000 annually to non-engineering graduates, whilst a 2021 graduate programmer analyst trainee received Rs 4 lakh, including Rs 22,500 annual incentive and Rs 19,500 as insurance.
A 2022 TCS offer letter shows Rs 3,36,000 annual salary for assistant system engineer trainees in Hyderabad, with a potential Rs 60,000 first-year performance bonus.
Ques IT staffing CEO Kapil Joshi says large IT services firms typically pay freshers Rs 2.5 lakh-Rs 4 lakh annually, with mid-level professionals earning Rs 5 lakh to Rs 10 lakh, and senior professionals in excess of 10 lakh.
There are a couple of caveats to this story of salary stagnation. While most freshers receive salaries as low as t his, some are more accomplished or have specialized skills receive substantially more. Salary differentiation based on skill became a strong trend some years ago.
TCS, in an email to Times of India, said it had varied compensation levels, based on the nature of work and quality of talent. There are categories labelled “Ninja, “Digital”, and “Prime” for candidates that showcase higher skills. The company said it rewards talent “through a robust, performance-driven, and skill-based model.”
Some also note that the effective compensation for freshers is actually “more” given that companies invest in training after hiring. Nasscom (National Association of Software and Services Companies) president Rajesh Nambiar says large companies recruiting from campuses invest in intensive training programs to ensure that students develop relevant and in-demand tech skills.
“This focus on skilling is a key reason why the tech industry in India is one of the most preferred sectors to work in India is one of the most preferred sectors to work in. Today, India is a hotbed of skilled digital talent. And as technologies evolve, hiring trends will continue to shift, with increasing demand for niche and specialized skills.”
Krishna Viji, Team lease Digital’s business head for IT staffing, also notes that IT firms invest heavily in upskilling freshers, covering everything from technical training to soft skills and project-readiness before they can be deployed. “This training phase, along with substantial bench costs (those waiting for projects), forms a significant component of operational overheads, directly impacting salary structures.”
THE WAY FORWARD:
India’s engineering colleges produce about 15 lakh graduates each year and 10% to 15% of them get jobs through campus placements, according to Team lease Digital. As a general trend, even those specializing in other core sectors, such as chemical engineering and civil engineering, sit for IT job roles during campus placements because those jobs are seen to be more promising. Lately, with the advent of generative AI, the gap between demand and supply is widening, as firms want ready or at least more specialized talent, even at the campus-level, Wipro, for instance, has moved to a train-and-hire model instead of training after hiring.
The surge in global capability centers (GCCs) — the tech and operations arms of MNCs — is also beginning to change the scene. They have become the biggest hirers in tech, and, while they have tended to hire skilled talent from IT services companies, they too are now beginning to go to campuses for recruitment. That is improving the fresher demand environment. They also tend to pay more.
The salary goes up to $10,000 and more for specialized skills. This, in rupee terms, is Rs 5.9 lakh to Rs 8.5 lakh. The lower end is for roles such as software developer while the higher ones are for machine learning experts and threat-detection engineers.
As for those who still get Rs 3.5 lakh, many see it as a career launch pad in industry that’s at the forefront of growth and innovation globally.
