Job seekers may have to settle for lower pay

A few weeks back, when six top executives of a troubled American bank’s Indian arm started negotiating for jobs with a domestic financial services firm, it appeared life had come full circle for them. The much sought-after talent were suddenly hard pressed to justify their current salaries, let alone seek a hike. The domestic firm offered 50-70 % lower paychecks and the executives accepted.

Corporates—who were used to paying whatever was being asked for by top talent and stay ahead of the attrition curve in a boom economyare now taking control of the job market. As growth slows down, it’s a buyers’ market out there and employers are calling the shots once again.

Settling for lower salaries in new jobs is not limited to the beleaguered financial services sector alone. Even as airlines mull salary cuts and layoffs, there are several high-fliers in other sectors who are settling in new jobs at much lower salaries after having been eased out of their previous position. “Employers are increasingly becoming reluctant to continue offering huge salaries to executives . Talent is required but at a suitable price. Not only that, companies across sectors are rationalising their manpower strengths,” says Head Hunters India CEO Kris Lakshmikanth.

A 40-something executive director, who earned around Rs 1.2 crore per annum at a leading FMCG firm, recently faced a similar dilemma. When the company asked him to put in his papers, he was forced to take a 30% salary cut in his new job with a pharma company.

In another instance, a Delhi-based real estate firm, conscious of increasing costs, recently cut short the dream run of another high-flier . The executive, in his early 30s, headed the sales team at the realty major and earned Rs 7 lakh per month. Having been shown the door, he went back to his employer and settled for an 80% salary cut. “The variable part of the salary has taken a huge hit. Companies are not guaranteeing any bonuses or other incentives in the coming year,” says Transearch International managing partner Uday Chawla.

What’s more, with the recession in key markets like the US and UK, global talent—both expat and diaspora—are now available to Indian companies at bargain basement prices. As a result, home-grown execs are finding the market more crowded than before. A senior vice-president , who recently quit a mid-sized IT firm, is struggling to get a decent offer. The best offer he has managed so far will get him 40% less than his previous salary.

Even those lower down the corporate ladder and still on the rolls are feeling the heat. A programme manager at a global IT firm, who received a hefty salary and 200% bonus last year, got a 20% pay cut this time. And there’s simply no assurance of a bonus.