Rising rupee sinks dollar dreams of staff
The sharp rise of the rupee against the dollar (over 9% in the last 4-5 months) is now causing concern to a section of employees of these companies, the coveted and much-envied bunch of expats and Indian employees paid in dollars, who are drawing ...
By Sushmita Mohapatra & Thanuja BM, TNN |
BANGALORE: It’s not just the Indian exporters, especially IT firms, who are worried about the rising rupee. The sharp rise of the rupee against the dollar (over 9% in the last 4-5 months) is now causing concern to a section of employees of these companies, the coveted and much-envied bunch of expats and Indian employees paid in dollars, who are drawing a shrinking package.
For example, an American who recently joined at a CXO level position with one of the mid-sized IT firms in Bangalore says, "I joined the company about six months ago when the dollar was worth about Rs 46. Its now Rs 40, so my total salary package has shrinked if you convert it locally." Experts say that this phenomenon significantly reduces the spending capability of such expats.
Says Priya Chetty-Rajgopal of executive search firm Stanton Chase International, "Few months ago, when we were making searches for CEOs in the US for India based companies, we were giving offers of between $200,000 to $300,000. Now, we find it very difficult to offer similar packages to attract talent because of the rising rupee. We would rather negotiate in rupees now, it just makes it easier."
It’s not just expats but onsite employees of IT firms who are also slightly worried. Though they do say that it is still early, some opine that the rupee rise could put pressure on their allowances and savings.
Bhanu, who is working for one of the Indian IT biggies in Boston said, "Some companies are reportedly cutting down on allowances. For instance, employees are being provided with service apartments. Earlier, we got a housing allowance along with the liberty to choose our accommodation. This way, we ended up saving a considerable amount on these trips.”
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Most HR heads of companies are not willing to comment on the issue. Wipro’s HR head Pratik Kumar only said, “People continue to be very observant of what’s happening around.’’Yehasvini Ramaswamy, director-people practices, e2e business solutions said, "For corporates the focus now is on making employees more employable and enhancing global skillset. While there has been an impact on dollar salaries drawn by employees, playing the salary game is not the route corporates intend to take. Corporates are looking at development of their employees and providing them with skills for cross-geographical assignments."
Adecco India COO Sudhakar Balakrishnan, however said, "Most onsite employees have dual compensation, i.e., salary which is paid in rupees plus costs met there (allowances paid in dollars) which the companies bill to the customer. So there might not be any dip. But if the employee is being paid completely in dollar terms, his package will shrink in rupee terms."
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