Before accepting offer letters: Some tips

[mayurpathak]

I see that lot of CEans are in their final year or are freshers who are looking for a job. I wrote a post on my blog recently and I thought it might be good for the fresher CEans to read to. Copy pasting it below

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Okay I must admit that I totally suck when it comes to negotiating salary. Twice before I have been tricked into a low salary and complex salary structure. As a normal job hungry guy, I would quote a CTC and I was almost always fooled. (PS: For the sake of my self esteem, I must tell you that till date 14 companies have offered me a job at various positions. I’m in my fourth job right now…anyway). I never knew that HR guys are smart enough to add Employers contribution of PF to the salary. Whoa! Good thinking, which actually ends up reducing my salary. There are many such things, and you actually end up earning almost 25-30% lesser salary than what you anticipate.

So since I have enough experience of handling (read tumbling into) such situations, let me give you some tips.

1. Read the document first. Check the components, there must be a basic salary, HR, Medical and other allowances such as telephone, vehicle, etc. Ask the HR which are all reimbursable and how do you do that (its normally by submitting bills).
2. Most of the companies allow you to decide the break up, so ask for this. In case you are confident of producing bills, ask them to keep your basic salary to the minimum for your post and increase the billable allowances (Mobile, HR, Vehicle etc.). Do the vice versa if you can’t produce bills.
3. Opt for food coupons. They are good.
4. Most of us are not aware that taking PF is not compulsory. You can opt out of it is you have other better investment instruments (ELSS funds, Fixed deposits, PPF, Interest on home+education loans etc.)
5. LTA is not compulsory too, but as most of us travel to a distant location at least once a year, leave it as it is.
6. Make sure you keep the variable component to minimum. Also ask a procedure for disbursement of such amount, cross check with some one you know in the company.
7. DO NOT fall prey to assured bonuses and service agreements (bond). I would say a firm no. By the way these bonds are one sided. They can only take you to the arbitrator. You can not be sued or jailed. No one can even force you to pay the money too.
8. Most important: If you think you are worth X, quote X+3 and negotiate hard so that you get at least X+1. Always look for 50% rise, so that even if it comes down by half, you have a good bet.

I have fallen prey to every thing above. So now a days I have started asking the net take home component of the salary. Sadly, people think I ask too much

[The_Big_K]

Hey, thanks for the tips Mayur. I just got an idea of a new discussion thread!

I'm sure we'll get more tips in this thread!

[mayurpathak]

Oh thanks. I got an idea to post this from the interview experience thread you have posted.

Sure we can explore more. Can you not add your views and experience if any?

[mahul]

Great info Mayur ! Thanks for all of it.

[mayurpathak]

Thanks Mahul. There is more to it than just few points. I would like people to put specific questions here so that we can answer them. I'm sure there are many other seniors (read kidakaka, The Big K, prady) who would know more than me.

[mahul]

Since you said, here I go.

The recent software slump has created quite a few problems for us final year students. Many companies take lots of time to convert job offers into call letters and to provide projects to freshers.

I recently tried to glean info about these policies from an interviewer of a company new to the campus but the guy merely sidetracked. Could you give me some tips on how to get this info straight out of the guy?

[mayurpathak]

Well, I will tell you whatever information I have got. Actually the recent slowdown in the US market is the reason why most of the small to medium IT companies are not hiring too much. I know a company who short listed 180 students from my college (from where I did my engineering) but most of them have not been called to join.

Be assured, there is no slump in software market, but the industry software companies have traditionally been dependent upon. The reason is, most of the Indian IT companies serve the American market, mainly in the BFSI domain. Due to subprime crisis, the financial industry has gone on a back pedal right now. Adding fuel to fire, the dollar too became weak. This led to stretched bottom lines of most of Indian IT companies. Hence they are apprehensive in letting new people in unless they are sure of closure of new business in the coming financial year.

But its a temporary phase and I'm sure the job market will bloom soon.