Why do companies like TCS, Infosys and Wipro pay less? They are big players in the IT game, shouldn't they take care of their employees?

Updated on : December 8, 2021 by Gunner Key



Why do companies like TCS, Infosys and Wipro pay less? They are big players in the IT game, shouldn't they take care of their employees?

Service companies have only one source of income and they are their customers. These companies like TCS, Infosys, Wipro, etc. depend on other companies for payment through which they pay their own employees in return. Before I explain the payment model of service-based companies, let me explain the income model of companies that pay handsomely. The companies that pay a lot are mostly product-based companies where the product is king. It is not dependent on any client you work for. So ...

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Help me understand why they should pay you more.

Your job is nothing more than filling in the data in an excel sheet that your manager / client would have provided (in simple terms, data entry) and let's say after 2-3 years you become "senior" then your job will be write "codes" which, however, you will be copying from the / google project already implemented without any shame.

Now even if you do menial or repetitive work, that doesn't mean you can't get a good salary, but then there must be some degree of "risk" in that, don't we pay taxi drivers a lot when we go? in the hills because we are

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Help me understand why they should pay you more.

Your job is nothing more than filling in the data in an excel sheet that your manager / client would have provided (in simple terms, data entry) and let's say after 2-3 years you become "senior" then your job will be write "codes" which, however, you will be copying from the / google project already implemented without any shame.

Now even if you do menial or repetitive work, that doesn't mean you can't get a good salary, but then there must be some degree of "risk" in that, don't we pay taxi drivers a lot when we go? in the hills because we are worried about our lives. That guy does the same job driving the same wheels, but every day we know how much responsibility he has. Please help me understand what kind of responsibility you share, you guys write code that is full of bugs without giving a damn. There are so many layers of testing, that project that could be implemented in a month, takes 6 months to "go live".

And last but not least, you are typical examples of "sheep", you know that IT is saturated, engineering is saturated, but you will still play it safe. Go down the same path that your next door neighbor's son / daughter took just to get some work. Now, do you really think that person really deserves a great salary? I mean, look at so many people, so many, who are so much smarter than you, so much braver than you, why don't they get more than you? At the end of the day, money circulation is a zero-sum game, right! So dear friend, stop worrying and thank God that at least he provided you with so much.

Personally, I would not agree with the fact that you have a large number of employees, so you pay less.
Amazon has 132,600 employees. Cisco has 71,883 employees, 57,100 employees work at google. 235,678 employees work for JP Morgan Chase, 34,800 work at Goldman Sachs.

There are many companies that pay well even if they have many employees on the belt.

Now, 335,620 work at TCS, 197,050 work at Infosys and 173,863 work at Wipro. These numbers are almost double those of Cisco, Google. But when TCS and Infosys had $ 50,000, they paid on par with those companies. The answer is no.

Salary Depends

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Personally, I would not agree with the fact that you have a large number of employees, so you pay less.
Amazon has 132,600 employees. Cisco has 71,883 employees, 57,100 employees work at google. 235,678 employees work for JP Morgan Chase, 34,800 work at Goldman Sachs.

There are many companies that pay well even if they have many employees on the belt.

Now, 335,620 work at TCS, 197,050 work at Infosys and 173,863 work at Wipro. These numbers are almost double those of Cisco, Google. But when TCS and Infosys had $ 50,000, they paid on par with those companies. The answer is no.

Salary depends on what your company thinks could contribute to the company's income. Amazon doesn't hire people and keep them on the bench. Every day in these companies is a challenge and you must be alert to take on multiple responsibilities. But in low-wage companies, most of the time the work is monotonous. The company does not expect much from you hence the low salary and benefits. But even there, when you grow up and become a senior associate and take on responsibilities, you start getting paid pretty decent.

Therefore, the number of employees is not a factor, the quality of work the company expects and their role in the profit of the company determines their salary. No matter how many Google, Cisco, Microsoft employees they have, their salary will be much higher than average.

It is true for all companies that pay well, the contribution you make is important. That's why growing companies like Ola, Zomato, Makemytrip, and other similar startups pay their employees well. They know they have a small group of employees who have expertise in a particular domain and their combined effort is driving the company forward. In a startup, you have a greater contribution to the products. That is why you get various other benefits like stock options and other allowances and redemptions that are not even part of your CTC.

Now coming to non-financial benefits, when you work for TCS, Wipro, Infosys, etc., you don't get facilities like Work from Home in most cases, there may be exceptions, but this is not a company-wide policy. They don't believe in employees who work from home. There they are very particular about your times.

When I left Engineering 12 years ago, IT companies were offering roughly Rs. 3.0 Lakh Pa as the package they continue to do now as well. Ever wonder why the Freshers are currently being paid nearly the same amount of salaries compared to a decade ago.

Herein lies the culprit: the business model.

India's information technology sector operates on a pyramid model.

At the bottom of the pyramid you have Freshers with people experienced in the previous levels. At the top, you have the Customer Face / Delivery Manager team that interacts with the customer on a business level and takes responsibility for the success of the project.

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When I left Engineering 12 years ago, IT companies were offering roughly Rs. 3.0 Lakh Pa as the package they continue to do now as well. Ever wonder why the Freshers are currently being paid nearly the same amount of salaries compared to a decade ago.

Herein lies the culprit: the business model.

India's information technology sector operates on a pyramid model.

At the bottom of the pyramid you have Freshers with people experienced in the previous levels. At the top, you have the Customer Face / Delivery Manager team that interacts with the customer on a business level and takes responsibility for the success or failure of the project.

Therefore, to make the business model work, IT companies hire as many newbies as possible and train them to perform basic coding, testing, and other related activities. At level 2, you have experienced staff who will code key modules or oversee code development on a regular basis. At higher levels, you have experienced people whose salary is higher than the lower levels and are in charge of system-level design / test design, etc. At the top you have the delivery manager and superior who are responsible for the profit and loss of their department / team.

Therefore, the business model works as long as the pyramid cost structure is not altered. This is the same reason that companies pay very low wages for those at the bottom of the pyramid and the same increases as they move to higher levels.

What happens when there are more experienced people?

The pyramid becomes bulky in the middle, leading to a reduction in profit margin or making the business model unviable.


The result is layoffs in middle management. In most cases, rookies won't be fired, but higher-level staff will face the worst of it. Some examples last year:

A typical answer to this question is that service-based businesses pay less while product-based businesses pay more. In my answer, I will explain how and why this affects your salary.

Understand the business model of these IT companies. Regardless of what these companies claim on their websites, they are essentially outsourcing companies, which means that their business model is based on cost advantage and not product differentiation. This affects the salary of employees in the following ways:

First, they make a profit based on wage arbitrage. So the bigger the difference between the cost of someone in the US doing IT work

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A typical answer to this question is that service-based businesses pay less while product-based businesses pay more. In my answer, I will explain how and why this affects your salary.

Understand the business model of these IT companies. Regardless of what these companies claim on their websites, they are essentially outsourcing companies, which means that their business model is based on cost advantage and not product differentiation. This affects the salary of employees in the following ways:

First, they make a profit based on wage arbitrage. So the bigger the difference between the cost of getting an IT job done by someone in the US and someone doing the same job in India, the bigger the profit for the company. Therefore, there is an incentive for the company to pay you less. But how can they pay you less?

This comes to my second point. Because these companies are outsourcing companies, the work they do is quite mundane, so you don't need employees with very high educational qualifications with high intelligence to get the job done. So, you may think that with your engineering degree and the effort and money you invest to obtain that degree, you should be paid more, but the truth is that your degree is not a requirement for these jobs. Also, since India produces millions of graduates, there is no shortage of talent for these companies.

Third point: intense competition. The IT services business does not require any significant investment in human capital. That is why these companies were able to achieve growth of more than 20% until a few years ago. But because of this there are many IT companies with very little differentiation between them and as a result they have no bargaining power with the client so they cut employee salaries to protect their margins.

They will pay a ROBOT to run it, maintain it, etc., (with all the RPA around to pay you).

Ohhh my friend, you are very wrong .. Very small companies do that .. or pretend ..

They like to take care of the people they benefit from, in this case CLIENTS

  • Employees rank 100th on the list ... (or on "if possible list")
  • All IT companies depend on one thing: with a saying

"There is a reason to win and there is a reason to spend"

The part of that sentence we're in matters ... and they work well on the basics of each case ...

When you're in your appraisal cycle, even if you deserve a 4/5 rating.

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They will pay a ROBOT to run it, maintain it, etc., (with all the RPA around to pay you).

Ohhh my friend, you are very wrong .. Very small companies do that .. or pretend ..

They like to take care of the people they benefit from, in this case CLIENTS

  • Employees rank 100th on the list ... (or on "if possible list")
  • All IT companies depend on one thing: with a saying

"There is a reason to win and there is a reason to spend"

The part of that sentence we're in matters ... and they work well on the basics of each case ...

When you're on your review cycle, even if you deserve a 4/5 rating ... (even if your manager wants it), the pressure from above is so great to lower the rating so they can pay or go up less ...

The question they ask is "How is it that all team members can perform well?"

when you change jobs, some of them are also part of the BGV process.

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Everything you hear is just from a mindset .. Even if you ask a person who earns 10 lakhs per month, he is not satisfied ..

(because if the person had worked for 10 years and investing FD (in the worst case) he would get the interest and settled) and would do the things he likes ...

the worst part is that parents and newbies blindly spend on IT without consulting ... just because of the ads

It is good but as a side business.

Companies like TCS, Infosys, Wipro are known as service companies. They sell services to generate income.

What is the service? They do something (some service) for other companies and they get paid for it. How do you provide this service? They ask their employees to do it.

Suppose a company asks company XYZ to create a website for them and they agreed to pay Rs 1 lakh for it. Now let's say XYZ will assign only 1 employee to build this website and this will take 1 month to build the website.

If XYZ pays the employee a salary of 1 lakh per month, they will not get any benefit from this job, b

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Companies like TCS, Infosys, Wipro are known as service companies. They sell services to generate income.

What is the service? They do something (some service) for other companies and they get paid for it. How do you provide this service? They ask their employees to do it.

Suppose a company asks company XYZ to create a website for them and they agreed to pay Rs 1 lakh for it. Now let's say XYZ will assign only 1 employee to build this website and this will take 1 month to build the website.

If XYZ pays the employee a salary of 1 lakh per month, they will not get any benefit from this job, but if they pay Rs 50,000 per month, they will get 50k profit. Companies are always looking to increase their profits, one way to do it, in this case, is to pay employees as little as possible, as if they could get someone to take only 25k per month, they would make a profit of 75k.

In other words, they sell labor, which from an employee perspective, sells employee time. So they want you to work more, take less salary so they can make more profit. You see, if an employee's salary goes up, his income goes down. The salary of employees is inversely proportional to their income.

For other product-based companies like Flipkart, PayTM, OYO, Uber, etc., their source of income is their product, they sell other things, they don't sell people's time to other companies. If they pay less salary, that will not have any impact on their income. So they hire the best people who can further improve their product and pay the best salary in the industry.

Well, some of the answers above have given good answers. As a non-IT person who has been living in a community of 90% residents who work in the IT field, I can confidently say that the "academic background" you are talking about it's pathetic.

Aside from IITs, NITs, traditional government universities, and some old and established private universities, all the private universities that have multiplied in the last two decades are so deficient that they cannot be called professional universities at all.

A small example: my family members and I were shocked

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Well, some of the answers above have given good answers. As a non-IT person who has been living in a community of 90% residents who work in the IT field, I can confidently say that the "academic background" you are talking about it's pathetic.

Aside from IITs, NITs, traditional government universities, and some old and established private universities, all the private universities that have multiplied in the last two decades are so deficient that they cannot be called professional universities at all.

A small example: my family members and I were surprised when my neighbor (a "qualified engineer" and an IT professional) said very frankly that he had never heard of a current of science called Geology. This conversation took place during our introductions 10 years ago, when this person wanted to know what my father's profession had been. Every time he said Geologist, he repeated Zoologist. Every time he corrected it and said Geology, it kept repeating Zoology. Finally I asked him a direct question, which was if he had ever heard of a scientific stream called Geology and had it explained to him. He very innocently answered "no" wondering why we were making such a fuss.

The fact that he was not only a "qualified engineer" but also worked for a major information technology company shows the quality of "qualified engineers" these companies have to employ. Today he is in the US From A and has been there for the last 8 years. You have applied for your citizenship there. So do you think Americans are foolish enough not to have noticed what we notice?

I think this should explain the salaries paid by the companies mentioned. After all, the "Engineering" title you are talking about is just a paper and a complete eye wash, which Americans and customers in other EU countries are also very well aware of. Companies that have to employ these poor engineers, in fact, have to spend money on training these people.

These are known as service-based businesses. And service companies need a lot of employees (because based on their workforce, they get new projects). That is why every year they hire employees from universities across India.

Now speaking of Salary, it depends on many conditions.

1. College-based: If you are from a reputable university like NIT and IIT, they will pay you more. Because a candidate from said institute has so much skill and knowledge to work on a project in real time since their curriculum is designed that way and they have the appropriate training for 4 years. So basically, they will need you

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These are known as service-based businesses. And service companies need a lot of employees (because based on their workforce, they get new projects). That is why every year they hire employees from universities across India.

Now speaking of Salary, it depends on many conditions.

1. College-based: If you are from a reputable university like NIT and IIT, they will pay you more. Because a candidate from said institute has so much skill and knowledge to work on a project in real time since their curriculum is designed that way and they have the appropriate training for 4 years. So basically, they will need less company resources and their productivity will be higher compared to a candidate selected from private or state universities.

2. Based on your course of study: If you are a BE student in Chemical or Mechanical Engineering and you join IT companies then they have to dedicate more resources and time for you to be eligible for the job.

3. And there used to be the days when there were 10 vacancies in an IT industry, then 15 candidates used to apply and they used to select 10 candidates and they assumed each candidate's salary was 100 INR. So the total spending for 10 employees was 1000 INR per month. But in the current scenario, the number of candidates is 100 or it can be 200 for 10 vacancies. So what they are doing is hiring 15 candidates and offering INR 100 or it may be less as salary. But there is a clear difference between the value of INR 100 10 years ago and INR 100 now.

I hope you have your answer. But the main concern is why does an electronic engineer or a mechanical engineer want to work for an IT company? Because I think we live in a country like that where we have enough talents and fewer opportunities to use those talents. And I hope that in the near future things will change.

JAI HIND.

These companies pay little because these companies get less and less in terms of turnover from their respective customers. Competition in this field is increasingly fierce. Cost is, sadly, the only differentiator.

Therefore, because they cannot increase their turnover year after year, as a result, the only way out for these companies is to reduce the cost internally. Employee wages are an important component of cost for these companies, and therefore minimizing wages is an option that all of these companies exercise.

In fact, most of the work you do

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These companies pay little because these companies get less and less in terms of turnover from their respective customers. Competition in this field is increasingly fierce. Cost is, sadly, the only differentiator.

Therefore, because they cannot increase their turnover year after year, as a result, the only way out for these companies is to reduce the cost internally. Employee wages are an important component of cost for these companies, and therefore minimizing wages is an option that all of these companies exercise.

In fact, most of the work these companies do anyway doesn't require extremely skilled employees. Consequently, even the least qualified people have the opportunity to work in these companies for very little money. Therefore, the whole environment further reduces the average salary of the employees.

I started my career in one of the companies mentioned and I owe a lot to that company.

1.) More people, more hiring and more jobs

By number, TCS, Infosys and Wipro, etc. they recruit thousands of newbies every year. When we can criticize them for mass hiring at the same time, the contribution these companies made to providing great employment cannot be ignored.

2.) Mainly service companies, less investigation, low risk of employee poaching

The PVU of any startup or product is domain or technology. But all the companies mentioned in the question are software service providers. Your investment in research

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I started my career in one of the companies mentioned and I owe a lot to that company.

1.) More people, more hiring and more jobs

By number, TCS, Infosys and Wipro, etc. they recruit thousands of newbies every year. When we can criticize them for mass hiring at the same time, the contribution these companies made to providing great employment cannot be ignored.

2.) Mainly service companies, less investigation, low risk of employee poaching

The PVU of any startup or product is domain or technology. But all the companies mentioned in the question are software service providers. Their investment in research is far less than that of other tech giants. In fact, TCS, Infosys, Wipro, etc. They expect some of the employees to leave each year and replace them with the hiring of new employees.

3.) DNA of the company

Most of India's old IT guards come from non-cs tech fathers. TCS example started by Tata Sons, Wipro by Wipro Enterprises, Tech Mahindra by Mahindra Group, Larsen & Toubro Infotech by L&T Group, etc. Your business model (I think company DNA is a better term) is different from the product or startups. Another thing at a much higher or decision-making level, the situation is different and they pay very high. (Example: Tata Administrative Services). They have a research department, but their miniature compares to other tech giants.

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