Salaries boom in Tier-2 cities amid work-from-anywhere flexibility: Randstad report
The work-from-anywhere flexibility, afforded by technology and prompted by Covid-19 pandemic, and new job opportunities are bumping up salaries in Tier-2 cities, as businesses learn to live with the virus and look to ramp up their operations.
According to the Randstad Salary Trends Report 2021 released today, Chandigarh tops in salaries paid at the junior and mid-levels. In fact, at the junior level, its average CTC of Rs 5.67 lakhs per annum surpasses the national average for the same level among Tier-1 cities (Rs 5.52 lakhs per annum), as per the report. Thiruvananthapuram comes a close second, with a variance of 3.5% and 1.9%, respectively.
At the senior level, Bhubaneshwar leads the table, averaging a healthy CTC of Rs 31.15 lakh per annum that is on par with the median level of Tier-1 cities. “A host of mining and steel manufacturing companies dot this city, and the IT/ITes sector is also gaining prominence with leaders in this industry setting up their presence here,” says the report.
Kochi ranks third in salaries in the junior-level, fourth in the mid-level, and second in the senior level – underscoring its importance in the years to come.
The top ten Tier-2 cities that featured as a first-time addition in the Randstad Salary Trends Report include Chandigarh, Thiruvananthapuram, Kochi, Jaipur, Nagpur, Lucknow, Bhubaneshwar, Indore, Coimbatore and Vadodara.
Vadodara shows an interesting trend in progressively increasing salaries as the job level increases. With the increasing push being given for its real estate, healthcare and educational infrastructure, we should see it moving up in the future.
In all the other cities – Jaipur, Nagpur, Lucknow, Indore and Coimbatore – as they move between different ranks at different levels - the variances are higher in the junior and senior levels. “This could be due to the predominance of non-IT industries in these cities, such as manufacturing, engineering and textiles, says the report.
Ahmedabad Fastest-Growing in Tier-1 Cities
India’s IT capital Bengaluru ranks high in the Tier-1 city category in salary pay-scales – topping in the junior (with an average variance of 17.8%) and mid-level hierarchies (with an average variance of 4.5%), but trails Mumbai when it comes to senior-levels jobs with a 3.4% gap.
“On an average, junior executives in Bengaluru draw 11.6% higher than the second Tier-1 city, Hyderabad, and an average of 17.8% higher than all its Tier-1 counterparts. Bengaluru’s undisputed position as India’s IT capital most probably explains this trend. These margins are, however, significantly reduced in the mid-level job levels – Bengaluru is just 2% higher than the next city Hyderabad, and an average of 4.5% higher than all the Tier-1,” says the report.
At the senior job levels, Mumbai stands at the top of the table, with its salaries an average of 8.8% higher than the Tier-1 cities in general. Mumbai, being a very sector-niche location for banks, investment companies, consulting firms and analytics operations, commands higher salaries for senior executives. Plus, its higher cost of living has pushed the salaries of analytics professionals in these niche sectors northward as compared to all the Tier-1 cities.
Ahmedabad has shown a strong surge upwards over 2020, especially in the mid-level and senior level job hierarchies with an average CTC at Rs 16.73 lakh per annum (against the national average of Rs 17.26 lakh per annum) in the former and Rs 31.94 lakh per annum (against the national average of Rs 32.54 lakh per annum) in the latter.
“One of the fastest-growing cities in the country, and among the best to live in, Ahmedabad has extended its economic base from its traditional textile, chemicals and pharmaceutical industries to IT and healthcare,” says the report.
IT major IBM has committed to setting up its fifth software lab in Ahmedabad for sophisticated technologies, state-of-the-art product engineering, design and development. “This move will usher in the next generation of global innovation centers for software portfolios and cloud services,” the report adds.
Kolkata occupies the bottom rung for salaries at all levels by a wide margin – 39.5% for junior levels, 26.3% for mid-levels, and 19.9% for senior levels. “The fact that Kolkata has far lesser sector-niche industries explains this trend, along with its additional attribute of having a significantly lower cost of living,” says the report.
Professional Services Emerge As Vital Industry post-COVID-19
The advancement of different industries to the top of the salary table at different levels - junior, mid and senior - tells a positive story of varied progress.
Professional services have emerged as a vital industry in the post-Covid business landscape. In salaries paid, it’s at the top in the mid-level (average CTC of Rs 20.47 lakhs per annum), and second in both the junior and senior levels (Rs 6.15 lakhs and Rs 37.76 lakhs per annum)
There is a high demand for and premium placed on ITES, professional services and advertising, marketing and PR industries. Average CTCs for senior professionals in these ‘Top 3’ industries (Rs 39.37, Rs 37.76 and Rs 35.83 lakhs per annum) exceed the top average CTC for the same job level in Tier-1 cities (Rs 35.68 lakhs per annum).
Advertising, marketing and public relations features as one of the ‘Top 6’ industries in the report. At the senior levels, it stands third in average CTC paid (Rs 35.83 lakh per annum). Digital marketing, especially, has come to occupy a critical role in the post-pandemic business recovery.
Healthcare functions at the junior levels command a high premium and an average of Rs 10.43 lakh per annum. It far exceeds the average junior level average by locations (Rs 6.71 lakh per annum) and industries (Rs 6.63 lakh per annum).
Operations tech professionals, who stand on the cutting edge of IT and Engineering, sit at the top in the mid-level (average CTC of Rs 18.24 lakhs per annum) and fairly high across other levels.
Senior professionals in finance and accounting and legal and compliance occupy the second and third spots, respectively, in salaries drawn – underscoring their impactful contribution to business growth
“Over the last decade, fresher salaries in the IT industry have stagnated, as companies find that a good part of the 10-15 lakh engineers who graduate each year are not employable. This could well be a wake-up call for academia and the IT industry for closer collaboration in improving the employability quotient of graduates,” says the report.
Hot Jobs In 2021
In the case of IT professionals with an experience of 6-10 years, Hadoop specialists (average CTC Rs 24.81 lakh per annum), testing practitioners, other than manual and automation testing (average CTC Rs 22.89 lakh per annum), and specialty doctors (average CTC Rs 22.50 lakh per annum) feature as the ‘Top 3’ hot skilled professionals.
Financial capabilities and compliance have emerged stronger in 2021 than they did in 2020, especially in the senior-level roles, where they occupy the second and third positions, with average CTCs of Rs 34.01 lakhs per annum for F&A professionals, and Rs 32.95 lakh per annum for legal and compliance professionals.
Salary Trends for Job role Hierarchies
A high premium is placed on seniority of job levels, with a significant jump in average salaries of the three job role hierarchies. Mid-level average CTCs jumped three-fold to Rs 17.26 lakh per annum from the junior-level average of Rs 5.52 lakh per annum. Senior-level average CTCs nearly double to Rs 32.54 lakh per annum from the mid-level average.
Despite the disruptions caused by the second wave of Covid-19 early last year, average salaries have registered a rise across all job levels. In the junior level, it has risen from Rs 5.79 to Rs 6.71 lakh per annum; in the mid-level from Rs 17.49 to 18.06 lakh per annum; and in the senior level from Rs 33.38 to Rs 35.68 lakh per annum.