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High executive salaries does not bode well for India

Executive salaries in India are rising fast among the Asian countries, closely followed by China.

The increase, which was about 26 per cent during 1996, has now come down by one per cent with the increase in China being put at 16.1 per cent. Indonesia (15 per cent), the Philippines (14.5), and Vietnam (13) per cent were among the other Asian countries where the rate is on the increase.

This was revealed in the Asia Human Resources Atlas, released by the Corporate Resources Group. Company Director for Asia Richard Payne and Country Director Mervyn Periera said that there was increasing demand from a number of foreign companies who want to start their operations in India about pay compensation and human skills.

Payne said such a huge increase in the salary level did not augur well for the country whose growth rate was ranging between four and five per cent only. However, the growth rate in China was about 10 per cent, he pointed out.

Payne said the sharp increase in salaries add to high fixed costs besides leaving a wide disparity in salaries of different groups. India stood fourth in Asia in the disparity level with a manager earning 4.7 times more than a fresh graduate who was entering the job. The disparity was highest in Indonesia where it was 8.8 per cent, followed by China 6.6, and Thailand 6.4. The disparity was the lowest (2.4 times) in Australia and in Japan (2.9) he added.

The data was based on surveys and reports compiled and published by the group and its associates. The salary data was as on April 1 this year and covered 13 Asia-Pacific countries. The group, which set up its operations in India four months ago, has offices in over 40 countries.

Payne said the foreign companies were looking for manpower in the areas of high-tech industries (which included electronics and software also), chemicals, and pharmaceuticals. While the demand for skilled manpower was greater in India, it was not so in China where there was greater rank and file staff (such as machine operators).

He said attraction, motivation, and retention of executives remain the important concerns for most companies in the increasingly competitive and changing environment.

According to its cost of living reports, Bombay topped with an index of 64 (Singapore base:100) as compared to Tokyo which stood at 143. Among the 13 cities mentioned. Shanghai and Seoul stood at 103 followed by Hong Kong 106. The index was 76 for Manila, 80 for Kuala Lumpur, and 91 for Bangkok. In the quality of living comparison, Bombay stood third from the bottom with an index of 68 (base city Singapore: 100) with the lowest being that of Ho Chi Minh city 63.

UNI