The Indian IT professionals are better paid but when it comes to salary hikes, BPO employees in India are more privileged. While IT professionals got an average salary increase of 16%, BPO professionals received an 18% hike in 2005. In terms of wage bills, IT companies spent more on Total Cost-to-Company (TCC) in contrast to BPO companies in 2005, according to the Nasscom-Hewitt Total Rewards Study.

The IT sector witnessed a 10% movement in compensation across levels on TCC. BPO companies witnessed less increase in wage bills at seven percent in terms of TCC. Both IT and BPO sectors are seeing a movement toward a higher cash-to-benefit ratio. The IT firms in 2005 revealed a 78: 22 cash orientation, as compared to the BPO firms at 76: 24.

The study also reports a growing trend toward differentiated total rewards practices based on specialized skill and complexity.

Out of the 91 IT organizations surveyed, 27% reported a differentiation based on hot skills, while 41% said that they did not differentiate between skills in specific job families. Among the BPO firms, the number was higher with 66% of the organizations reporting a formal policy of differentiating compensation based on process complexity.