http://www.hindu.com/2008/11/04/stories/2008110459350300.htm
Chennai IT is hitting rough weather for sure.
Today I got the news that my ex-employer is cutting down as well. Reason? Credit crises. It’s all a connected world, baby! This is precisely the reason why we IT coolies had more to write on that damn thing. We would not have bothered half as much had we been probationary officers in Dhanalakshmi Bank.
A lay off in US was on the cards for about a month now. It was featured and gossiped in the area portals.
So the announcement as such was not shocking. But what was indeed shocking was that some of the folks I had personally interacted with and who are the best have been asked to go.
It’s all fine to calculate like 1 resource in US = X resources in India. But there are some good resources who are invaluable. They can hire ten resources like me in India and yet we cannot compensate for that one critical guy who knows the product in and out for the past 5 years. I do not understand this logic of 1 guy with normal vision = 5 blind guys. Forget sentiments, this does not make business sense.
I cannot talk about this to the folks here since these are sensitive topics and NOT to be discussed. I cannot talk to the victims since they think they got fired because of us.
All this is done ostensibly to reduce costs. But some of the folks have been given benefits which are two years their annual salary ON HAND. So how does this reduce costs? My hunch is, and I may be wrong, its a mere accounting gimmick. A one time settlement, even if its a huge one will be written off from the company’s reserves, a Balance sheet item, while salaries which is a recurring item will be charged to P/L books periodically. These guys are going to show the analysts that we are reducing the salaries, and hence will increase profits in the P/L books in future while doling out two years pay from the balance sheet. They should have huge reserves in the balance sheet so it should not matter.
I think we are taking the adage, ‘Numbers don’t lie’ a bit too far. While numbers don’t lie, they only speak half the truth.
They weave a story of cost cutting which is stupid in the first place, and then spend a lot at one go as a result of such cost cutting! If the last sentence do not make sense, you are not alone.
I’ve been reading about stuff on H1b every so often in rediff and other portals. Recent one being this
Let me try to put some stuff for the dummies.
The whole campaign can be classified into two lobbies - pro H1 and anti - H1.
Pro H1:
- Companies like Microsoft, Google, Cisco and the innovation challenged bloke called Bill Gates
- Companies like Wipro, TCS, Infy (they are the cause of major controversy and to some extent justifiably so)
Anti H1:
- A body called CIS and some professors who analyze endless reams of data.
- Some senators who feel that H1 visa holders are next only to biological warfare and so should be stopped from entering US.
At the center of the storm is the candidate who is having a garland in his neck, not sure if it’s the one before wedding or sacrifice for a village God (Bali Aadu).
The candidate can be of two types – one is the typical grad school passout in US. He had already gone through hurdles like GRE, TOEFL, probable student loan,writing SoPs, getting the offer of Admission - IR20 err I20 (Sorry got confused with a commodity which is getting increasingly precious). And last but not the least, the mood of the Visa Officer in US consulate.
The other situation is a typical bachelor’s degree holder, with some experience looking for that elusive break which would help him close his home mortgage dues faster before his mortgage turns sub-prime. Though I reckon joining a start-up in Bangalore is a not a bad option than taking a job in recession prone US.
The Pro H1 party says there is a huge gap in the availability of skilled labor for techie jobs in US and that they are outsourcing because of that. The Anti H1 party argues that all this brouhaha of ’skilled worker’ is all just an eye wash to bring in low cost workers into the great America and pollute the land with infidels, or something to that effect.
They are basically like DMK and ADMK. Each have their own political reasons and business reasons for fighting it out. In the end, the powerful lobby wins.
If I were to decide on this issue, I would say those who completed their masters in US should be completely exempted from this quota. It is not fair on the ones who took the pain of going through all the hassle a student goes through, only to find its all driven by a number and lottery game.
Pitting them against the 2nd category folks for basically the same number of quotas (okay, maybe 20,000 more but hardly any difference) only creates unnecessary animosity between the two without solving the problem of the US corporate or the American economy at large or the US senators.
The second category of workers should be allowed visa based on their education/experience/skill sets, the offer of employment they hold and the demand for such professionals in US. Admittedly, this is trickier than the first but no less important.
For e.g My friend Madhu, may not be a Master’s Grad in US, but having known him well, I think it would be unfair to him and his potential employer to lose out on Madhu just because of the H1 issue if he chooses to apply for one. Classic lose-lose situation.
I think the USCIS and the other stake holders should take a long, hard look into this and come out with a better design for the whole H1B process so that their country gets the candidates they need and those who abuse the system are deprived of their advantages. One step in the right direction was rejecting multiple filings. But more needs to be done.
The whole fixed numbers game (be it 65,000 or 79,999 or whatever) is simplistic while trying to be simple. I agree that every system will have its own shortcomings, but having a numerical cap on such a sensitive issue betrays a laziness to think and analyze more than anything else. Topping it off with a random selection process is beyond words. I am sure our planning commission can come out with a better system than that.
It’s another matter that most of the desi bloggers in US who may have a much better view don’t talk about such mess by the US government in their blogs. They are happy with their status reports on how many street lights were not glowing in Pazhavandhaangal when they last visited. I am scared to write about NRI’s nowadays so let me not get there.
Some folks classify it under emotional quotient. But let’s just stick to GQ for now. I need to do some value add, see!!
Unlike my IQ, my GQ is pretty decent. Last week I commented on a fellow blogger’s post which turned out to be as much as her post and felt guilty. Maybe I should’ve written about it in my blog and given a link.
But some days, rather most of the days, I tend to do some stuff and think about it later. Like the way I thought I should’ve taken the day off, after reaching office at a leisurely 4 PM. I thought I will be delayed but not to THAT extent. Eventually I met with some QA folks, had Kozhukattai and Veg. spring rolls (thought of avoiding it, but someone said vegetables are good for health :p) from the cafeteria enterprise owned by Radhika Sarathkumar and came back at 6.30 PM sharp. Thanks to flexi timings and some such funda, I will get paid in full for the day, but I did feel guilty for a moment.
My feeling bad quotient even extends to Wall Street firms. It’s bizarre to see events which used to happen in public sector companies in India in the seventies, eighties are happening to Wall Street firms now. These firms are almost on the verge of begging the Fed to give them some pocket money for the day. Bear Sterns was thrown $2 USD per share by JP Morgan and they gratefully accepted it. The Fed is funding the whole transaction (a body called BIFR used to do such similiar activities in India).
In another sense, this is socialism of the highest order as one great investor had pointed out. Carlyle capital is voting unanimously to wind up operations and Lehman Brothers is shedding jobs. I was one of the beneficiaries of Lehman’s offshoring of IT application and development services way back in 2003. BFSI segment is one of the major outsourcers of IT services. They still remain so for the most part I guess.
I used to tell my friends that my first home was part funded by HDFC and Lehman Brothers. I have moved out of that segment in the recent past. But I know several of my friends’ homes are still indirectly funded by the IT budgets of Citigroup, JP Morgan, Merryll Lynch etcetera. The trouble is, a lot of high end work for these firms involve working on complex financial products which one Mr. Warren Buffet calls ‘Financial WMD’. Whatever.
I think it’s good to feel bad or guilty occasionally.
For one, it shows how sensitive you are. Nobody likes an insensitive sob. But equally important is to remember the lessons and move on. Nobody likes a loser who harps on his past mistakes forever as well. Given a choice between a sob and a loser, I think young women might prefer the former :p.
Now, why did I write a post like this, spending my useless time and also forcing my readers to spend their valuable time??
What happens when a 24 year old, 3 years experienced software pro gets a CTC of 8 lakhs plus?
She has no precedent in her family who can guide her on how to handle all the new money. Nor is she taught about the importance of financial prudence in school or college. While a fat pay cheque is a good thing, it does come with its own perils.
As the economy sees GDP growth rates of 8% for the nth consecutive year,and with the industry facing acute shortage of manpower, more and more young people are earning a lot more per annum than their fathers and forefathers ever did in a decade. Where does this lead to? As is always the case with most youngsters, they end up learning things the hard way.
Almost always, the jobs that most of these MNCs dish out just plain sucks or is too demanding. This is not to say that work with lesser pay packets are revolutionary. What I am stressing here is, a crappy work can make you more cynical, and more frustrated in the long run, and a fat salary can just make more people enter into quirksmode. Typically, people would respond by trying to compensate their dull day life with exciting things in life that money can buy - fun nights or weekends, lavish lifestyle etc. just to went out their frustration.
Soon this 8 lakhs per annum CTC leads to parties, buying expensive clothes, a car on EMI scheme, new mobile phone every few months, LCD television, monthly mobile bills big enough to can get a mobile phone, move to ridiculously expensive apartments - purchase or for rent. The term ‘compensation’ is more in line with the compensation for loss of happiness than for the time spent and knowledge gained.
Let’s see the less glamorous facts.
First, 25% of that CTC is what i call ‘God money’. You know it’s there but you can never see it - e.g., Variable Pay, PF etc.
Second, 33% of the balance will go to the tax man (or to the Home loan lender - essentially the money will go out of your hand and will be taxed again if and when it returns to you).
Third, your job was secure only till your last payslip, in other words, not any more. You never know when USD will go below 35 rupees, how much loss can your investment banking employer/client can absorb on sub-prime crises before axing you, and when your boss can get so cranky that you cannot stand.
Fourth and very importantly, the opportunity cost incurred is enormous. For one, not many can move to less paying but more potentially rewarding vocations in future (higher studies) because of societal and financial/lifestyle pressures.
If X wants to pursue a full time MBA in a good B school, he knows that he cannot because he absolutely needs the paycheck NOW to pay his home loans, car dues, credit card bills, mobile bills etc. This leads to even more frustration and consequently he requires more exciting things to keep him happy. All these are classic illustrations of ’salary trap’. Unfortunately, i find more and more fellow MNC folks falling into this trap. And it looks like there is no way out.
Frankly, i bet almost all of the salaried class would’ve, at some point or the other, felt trapped by their monthly pay checks. At least I’ve felt the same now and then. And this is true indeed, only the degree of entrapment varies.
So what’s the way out? Well, the way out will depend to a large extent on the degree of entrapment. And that can be deduced by a simple method. If you think you’ve been trapped as well, imagine a doomsday scenario. Just think you will be out of your job by EOD today. How long do you think you can survive with your own resources? An honest answer to this question will show you the dire straits or financial paradise you are in. If you are financial paradise material, then you do not belong to salaried class.
Once you know where you stand, just accept that as a fact. Realize that it’s gonna take sometime for you to come out of the mess - a year or two. Remember you did not get into the mess overnight.
Here are some common TO DO items which i sincerely think that you can do to help yourself:
Make sure you close at least 10% of your outstanding credit card dues every month. I know many jithan’s who dodge with balance transfers, but hey, a debt is a debt. Just because it’s interest free does not mean you will ever be worry free. The sooner you make it to zero, the better off you are. Credit card interest rates in India can be as high as 36% per annum - legal kandhu vatti.
Make sure you save at least 10% of your salary per month.
No matter what the tax benefits on your home loans are, target to close at least 10% of your outstanding principal every year.
Develop interests or hobbies which are engrossing but which does not cost a bomb. There are tons of hobbies and pursuits satisfying this criteria.
Never, never trade in stocks using margin funding. Avoid day trading in stocks per se. Day trading in stocks is not investing.
Get a decent health insurance cover for your family members.
All the above gyaan is not to prevent you from enjoying your hard earned income. My only concern is, know what you are getting into. Balance and moderation works well in most of the situations in life, but it works best in these aspects.
It’s great to live king size today, but make sure you and your family do not end up living pauper size tomorrow.