Sunday, September 06, 2009

Return to India (R2I) Salary Negotiation Tips


How do you know the best salary that you can get when you R2I? Does the R2I salary look like a dark black box to you? Yes! You need to do a lot of homework before you go to the negotiation table. The following information will give you enough ammunition to negotiate your R2I salary :

1) Check with your friends in India who have more or less the same experience like yours. Having worked in USA for sometime, you should've gained more experience and exposure. So, you should be definitely paid 10 - 20% more than your friend who has been working in India, all these days.

2) Your salary should be approximately 1/3rd of what you are earning today in US (include your total compensation such as stocks, bonus etc.,)

3) The salary range significantly varies across companies - service companies vs product companies, established companies vs startups, local companies vs multinationals. The formers pay less, while the latter pay more.

4) There is a significant difference in the salary based on the city/state in which you'll be working. For example, in Bangalore you may get 20 - 30% more than what you can get in Chennai.

5) The salary will also vary depending on whether you find your job from US or after landing in India. When you look for a job in India from US, you'll be among the very few who is trying to move back to India. But, when you look for a job in India after reaching India, you'll be among several thousands who are hunting for jobs. You may not get a special treatment, there.

6) Check for prevailing salaries in India from web sites such as www.glassdoor.com, www.payscale.com etc., However, these sources are less reliable when compared to the actual numbers you may hear from your friends/acquaintances.

7) Your salary is decided by how well you perform in the interviews & how much value you can bring-in to the company. You can negotiate your salary based on your performance during the interviews.

8) At times, companies will be very eager to fill a position with a specialist. If you are a specialist, then you have an upper hand in the salary negotiation.

9) If you are interviewing with companies who are based in US, your chances of getting a good pay is high. So, approach US companies who are trying to fill a position in their India office.

10) India's salary structure is slightly different that of US salary structure. In India, they'll call it as CTC (Cost to Company). It includes the pay, bonus + all the benefits that you receive from the company. You'll have a Basic Pay (which is completely taxable) and there are other allowances such as House Rent Allowance (HRA), Travel allowance (TA) etc., (the allowances are non-taxable, if you produce bills. There is a cap on the amount up to which you can produce bills). All Indian IT companies offer medical insurance these days (will be very useful if you have elderly persons or kids in your family). Some companies give you Sodexho passes (you can use them to buy groceries, to dine out, for shopping etc.,). All companies have a annual bonus component (typically, added to the salary. So, check with your employer before you sign the offer letter). Some companies will also take care of your relocation costs. That will be a sweet deal. There are very few companies that give stock options to employees.

Hopefully, these 10 tips give you enough data points to negotiate your salary. Wishing you good luck !

Related Posts:

Cost to Company (CTC) - Peeling the Onion
10 things to know if you are thinking of Returning to India (R2I)
Work environment in India - Then & Now

15 comments:

  1. Thanks for your useful tips. They are helpful.

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  2. Your quotes:
    "Your salary is decided by how well you perform in the interviews & how much value you can bring-in to the company. You can negotiate your salary based on your performance during the interviews."
    - How do they measure value by a R2I candidate.

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  3. The value that you can bring-in is very subjective. It is highly dependent on the burning needs as well as future goals of the company.

    Here are some examples

    - if you have good 'storage area networking' skills (including real world projects/products exposure) and if the company is trying to build a team for a new project/product in that area, you'll be a good value add

    - if the company has a project that requires frequent interaction with US folks & if you have good communication skill + US work experience, you'll be a value add to that company

    - if the company's products are suffering from poor quality and you've past experience in addressing product quality related issues, you'll be a value add

    There are certain things (such as technologies, skills, work culture, projects/product exposure) that can only be learned only in US (or a foreign country). If you can demonstrate such skills during your interview, it will be great. Companies in India definitely need such people - especially, when they're aggressively trying to fill their GAPs. Those are the value additions that an R2I candidate can bring-in. Hope this helps :)

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  4. Most recruiters/companies ask for current CTC. If I am based in USA, what should I tell them? If my base is 100K, salary.com computes my total compensation to be 150K. Is this my CTC in USA, or 100K, or something in between?

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  5. Technically, your CTC includes your salary + all the benefits that you receive from your company. Yes, 150K would be your CTC (if that includes salary, bonus, 401k etc.,)

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  6. The companies in India require service letters from previous employer. How do we back up $150K CTC if the employer does not give such a letter. Most of the US employers will mention base salary only.

    Do Indian companies give service letters that mention CTC?

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  7. Yes, it is tricky. You can show your W2 form from the employer which typically includes all the deposits from the company to you? Also, in some companies, the monthly pay checks include a column for "Year to date" as well as "Monthly" salary+benefits info. You may use that as well.

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  8. hi Saro , i m in US on Deputation by a Indian MNC . i m planning to return back and get settled in chennai . will I come under the same R2I category ?
    i m in US for the past 3 years and total IT experience is 5 years . my current wage is 60k USD , i recently cleared a interview and next stage is HR for a MNC in Chennai . could you please advice , how much i can demand as the CTC for the new offer ?

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  9. 3 years in US is short, but definitely valuable. Rule of thumb for salary negotiation is roughly 1/3rd of your US salary (& at least, 10 - 20% higher than your Indian counterparts). Hope that helps.

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  10. When you say 1/3rd of US salary, so if am getting 100k, my indian salary range would be 15 lacs + 10% higher for US experience = 16.5 lacs per annum..I somehow feel its very less. I know there is no rule of thumb for salary but just trying to get an idea..
    R2iindia

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  11. Also, what is a reasonable time to ask the employer to join, considering the only major hurdle is the apartment lease and selling of car? Don't want to shoo away the employers by asking too much time. I was thinking 4 weeks but is it too optimistic?? Pls advise.
    R2iindia

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  12. For the cost of having one resource in US, you can hire 3 resources in India. That is the rule of thumb used by many companies in US who have an office in India. That is the basis for "1/3rd of US salary criteria". Use that as a guideline and not as a "rule". If you think you have some special skills, definitely aim high.

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  13. Thanks saro..Kindly pls answer my other question also. It is not approved by you yet. I have just started my r2i job search and its giving me jitters.
    R2iindia

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  14. My Gmail tagged all the conversations under one email. So, missed your previous question. Regarding the date of joining ... normally folks in India give 2 months notice to the current employer before switching jobs. So, the companies in India are used to "2 months" notice period.

    However, if you like a specific offer and wanted to join them in 4 weeks - it is well and good. Employers will wait for 4 weeks. No issues there.

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  15. Thanks again saro.
    R2iindia

    ReplyDelete