SaaS-y salaries are 30% more than traditional IT services — and they’re making it tougher for traditional IT service firms to find the right talent
- Salaries for software-as-a-service (SaaS) roles in comparison to traditional IT jobs are higher by at least 30% if not more.
- Demand for SaaS specific skills is on the rise after the ‘digital transformation’ wave of the pandemic.
- Moreover, small businesses and startups are willing to pay more than bigger MNCs in order to secure the right talent.
India’s software-as-a-service (SaaS) market is still young, but that’s where the real money is, if you’re an engineer. The demand is overflowing, especially after the COVID-19 pandemic’s ‘digital transformation’ wave.
“COVID-related trail winds have led to a massive leverage using technology and that in turn leading firms to look at incrementing their teams with high quality engineers,” Siddharth Sangwan, the director and head of talent strategy at venture capital company Lightspeed Venture Partners, told Business Insider.
AdvertisementRecruitment firm TeamLease told Business Insider that salaries in SaaS firms are at least 30% higher than traditional IT services, if not more.
“The potential for growth is better as a SaaS firm because product development on this platform is more robust and exposure to technology is higher. Whereas in traditional IT service companies, they tend to stick to one project for longer durations,” explained Siva Prasad Nanduri, the vice president and business head of IT Staffing at TeamLease Digital.
Five SaaS skills that have seen the biggest uptake in demand:
Source: Quess IT Staffing
|SaaS skills||Spike in demand from December 2020 to January 2021|
What were once considered to be niche skills before the pandemic are now mainstream, especially with the wave of ‘digital transformation’ as lockdown forced businesses to shut down their physical stores. “Organisations are looking to hire talent with bundled skill sets, rather than just one skill, driving up the salary expectations and offers in the market,” said Vijay Sivaram, the chief executive officer (CEO) of Quess IT Staffing.
Having at least two years of experience is all you need to capitalise on your skillset. It doesn’t matter which sector you were in, or what brand you were working on, your knowledge is what companies are looking for when hiring.
“If you get a reasonable 2-3 years of experience, salaries have virtually doubled in the last one year. The demand is coming from traditional companies, from startups, from IT, and from global companies,” said Haresh Chawla, a partner at True North, during a Business Insider Twitter Live.
Sirion Labs, a contract life-cycle management company that has clients like Vodafone, Unilever, Credit Suisse, and EY, agrees that experience is key. Just having the right set of skills is not enough. A potential employee must also know how to use those skills to get the job done.
“When it comes to technical hires specialising in AI/ analytics/data science, we look for top talent with practical experience in NLP, streaming applications (Kafka, Rabbitmq), and programming languages such as Python and R,” explained the co-founder and CEO of SirionLabs, Ajay Agrawal.
Startups are pulling talent away from the bigwig MNCs
It’s not that traditional IT companies aren’t hiring for the same skills. They’re even giving out pay hikes to junior employees to keep them around for longer. But startups and small businesses are willing to offer more money.
“I know for a fact that startups are paying more. They’re more discerning in terms of the kind of people they have. Their interviewing style is very different from an IT services company or even some of the MNCs that are out there,” said Lathika Pai, country head of venture capital (VC) and private equity (PE) partnerships at Microsoft.
According to her, the keyword is ‘passion’. Startups are looking for young employees who aren’t working for money, but from the heart — people who want to shoot for the stars, not just the Moon. "More than the skills, it’s the mindset that differentiates engineers who ship great products. The ability to solve a problem for a customer and then do it at scale is what excites most SaaS engineers," Praval Singh, the vice president of marketing at Zoho Corp, told Business Insider.
He estimates that there over 1000 SaaS companies in India. More than 150 have annual recurring revenue of more than $1 million. And, these companies are a hotbed for engineering talent. They have a healthy customer retention rate, which means they willing to shell out the big bucks because they know they will see higher revenue per employee as the business grows.
“As far as salaries go, there is a higher percentile of companies in the SaaS space who offer more salaries, but that is linked to the skills and competencies required based on the type of work or role the employee is expected to play,” said Atlassian, one of the biggest software companies in the world. It is currently planning to recruit 300 research and development engineers in India over the next year.
Every other company wants to build a mobile app so that they can reach customers on their smartphones. Cloud is the new mantra, and cybersecurity concerns are on the rise. And firms are on the hunt to secure the right talent, which also means paying out big bucks to keep others from poaching talent away.
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