Online retailers Flipkart and Amazon are hiring the best and brightest among engineering graduates by offering fancy salaries, making it tough for technology companies such as SAP Labs India, Google Inc. and Oracle India Pvt. Ltd to attract top talent.
With Flipkart basking in the aura of success after recent fund raising, and Amazon India eager to catch up with its local rivals in a key international market for the US online retailer, these two firms are paying salaries that are often as much as 50% higher than the market pay for engineers, three people familiar with the matter said on condition of anonymity.
Over the past six months, Flipkart has increased salary offers by more than 40% across levels—from freshers to senior executives. The salary offers also include lucrative joining bonuses and other add-ons, the people cited above said.
For instance, Flipkart is offering salaries that reach as high as Rs.16-18 Lakh for entry-level engineers, who comprise graduates and people with one-two years’ experience. Until six months ago, the salary range was Rs.9-12 Lakh for the junior most engineers.
The sought-after engineers, most of whom are fresh out of college or have worked only for a year or two, in earlier years would have joined software companies, which are being forced to settle for the next best to fill some of their vacancies.
Hiring skilled engineers is essential for e-commerce firms such as Flipkart and Amazon as technology drives every single aspect of their business—from supply chain to their websites, even marketing. Among other things, engineers help build new features on the site, devise ways of squeezing out efficiency in the supply chain and warehouses, and guide the marketing activities of e-commerce firms by analyzing the huge amounts of data on the shopping habits of customers.
“Engineering is core to Flipkart and Amazon, and they seem to be in a talent war as both of them have been very aggressive in recruiting top engineering talent,” said one of the persons cited above, who has direct knowledge of the matter. “Both of them are offering salaries that are more than 50% (of the market rates) in some cases to get the engineers that they want. This is happening increasingly at campus hiring and for junior-level lateral hires. And if anyone is jumping from Flipkart to Amazon or vice-versa, then the salary hikes are even more.”
These companies aren’t worrying about the money. Flipkart said on 29 July that it raised $1 billion in fresh capital, and a day later Amazon.com Inc.’s chief executive Jeff Bezos announced that the world’s largest online retailer would pump in as much as $2 billion into its India business.
Flipkart declined to comment for this story.
Amazon India’s human resources (HR) director Raj Raghavan declined to comment on salary details, but said that the company has had “considerable success in unearthing top talent from premier engineering colleges and business schools in India”.
“Candidates from India’s leading engineering institutes and business schools form a major part of the talent pool at Amazon in India. We have been hiring from IITs (Indian Institutes of Technology), IIMs (Indian Institutes of Management), ISB (Indian School of Business) and many other engineering colleges and B-schools for quite some time and Amazon is one of the preferred employers of choice in majority of them,” Raghavan said in an email.
Amazon didn’ give details on how many engineers it plans to hire. Flipkart’s human resources head Mekin Maheshwari said in a June interview that the company expects to employ roughly 1,200 engineers by December from 450 then.
“Over the past three-four months, SAP, Oracle and a couple of other software firms have suddenly had to deal with the increased aggression of Flipkart and Amazon, and since they don’t want to pay these kind of astronomical salaries, they have lost out, to an extent,” the first person cited above said.
Oracle did not respond to an email seeking comment. A Google spokesperson declined to comment on compensation details but said the company continued “to attract top talent”.
“In addition, technology graduates look for high-end, cutting-edge exposure and that is something which SAP has been providing by developing innovations that helps companies of all sizes and industries run better. SAP pays graduates as per the general trend in the market,” said Anil Warrier, head and director, talent acquisition, SAP Labs India.
The increasing popularity of e-commerce among engineers is in keeping with the interest the sector is generating in the larger corporate world. As confidence in India’s e-commerce story grows, several senior executives from sectors such as telecom, consumer goods and retail are showing interest in joining top e-commerce firms that offer higher salaries and promise lucrative payouts when they sell their shares on stock markets.
Flipkart is likely to hire outgoing Tata Communications Ltd finance chief Sanjay Baweja as its new chief financial officer, Mint reported on 5 September. Among others, Prasad Menon, former HR head at McAfee India, and Surinder Bhagat, ex-HR chief at the Indian unit of Freescale Semiconductor, have also joined Flipkart.
“There’s no doubt that e-commerce is the flavour of the day,” said Anil Valluri, president , India and Saarc (South Asian Association for Regional Cooperation), at NetApp India Marketing and Services Pvt. Ltd, a data storage provider. “Earlier, in technology, everyone wanted to work at companies like Google and Facebook. Now, it’s e-commerce companies like Amazon and Flipkart, though NetApp hasn’t lost out to them because we don’t hire much from campuses and we also generally look for a different kind of engineers.”
To be sure, only a fraction of India’s engineering graduates enjoy such patronage and a rich pool of options to choose from. The fight for India’s best-rated engineering talent is in stark contrast to what most engineers face after graduation. The yearly intake of students at engineering colleges more than doubled between 2008 and 2012. In 2008, the intake was a little over one million students; the number stood at nearly 2.5 million for 2012, according to All India Council for Technical Education figures. In the same period, the number of fresh engineers hired by information technology (IT) companies slumped to 235,000 in 2012 from 341,000 in 2008, according to data from Nasscom, an IT industry lobby group.
“Clearly, e-commerce firms are raising the salary bar for hiring from the top tier of engineering talent,” said Kunal Sen, senior vice-president at staffing and recruitment firm TeamLease Services Pvt. Ltd. “The disparity between the creamy layer of engineers and the rest is bound to increase because of this.”
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