Tag Archives: compensation

Product Management Merry Go Round!

Musical ChairsSeveral years ago, when engineering hiring in dot-coms was peaking, you could see the same resumes making the rounds in top firms (Microsoft, Google, Ebay, Amazon and others) in India’s Silicon Valley.

Some years back, there was a great article in Forbes India that mentioned how the Top Honchos of Tech. MNCs in India keep rotating between the same firms, which led to limited value addition to these firms.

Now it seems product managers resumes are making the rounds in the same way. Many recruiters with such firms are pinging folks on LinkedIn with product manager designations, to fill vacancies in their organizations.

Here’s a true story of what happened with me.

A few months ago, I got a mail from a recruiter at a well-funded startup, offering a product management role. The profile was interesting, with a mix of product design and analytics for a cloud based offering, but it was an entry-level role so I replied back declining the offer to interview with them.

The next day, I got another email, which had the email ids of about 20 product managers from Amazon, Myntra, Ebay, Infoedge, Intuit, Microsoft, Walmart Labs, Flipkart etc. (My guess is that the recruiter wanted to bcc all of us, but messed up).

It said that the recruiter was happy to have made contact with us, and wanted us to refer folks from our companies if we were not directly interested in working in that product management role. Being curious, I looked at the profile for these folks copied on the mail with me. It became clear that most of these folks had:

1) B. Tech. or MBA from a Top College (IIT/NIT/ISB/IIM)

2) Worked in at least 2-3 different product management roles before their current one

3) Rotated between an MNC and a startup in their career, or between different MNCs

4) done at least one stint in a client facing role (marketing/sales/business development) or worked in the US

My guess is that many offshore MNC with a product manager opening will ping these same folks for the PM role (unless internal candidates are available). This may also indicate why many folks are unable to get a PM role in India, if they have not done it before. Finally, my guess is that these firms are also compensating PMs at similar levels which makes hiring easier.

The merits of this hiring strategy are debatable, but let’s leave that for another post.

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Does The Hiring Growth Impact Software Product Managers?

Looks like hiring in the Indian economy is growing again. E-commerce biggies such as Flipkart and Amazon are also making big bets on India. And with intense competition for top quality engineering talent, salaries in a few marquee firms are again shooting up. [ Note: the last is mainly based on anecdotal evidence] Lastly, there is a consensus that salaries in the IT industry will rise this year for most employees.

So does the software product manager also win by changing jobs or asking for a big hike in his firm?

If you are working in this field, you may already know the answer. There are multiple factors at play here which may prevent you from the list of people getting double-digit pay-hikes. These include

  • The company’s performance
  • The salary levels and job levels at the company you are targeting
  • The internal salary grade you are at
  • Your compa-ratio
  • The annual performance review
  • Performance of your business unit/group

Based on the factors listed above, you can peg your expected compensation growth as a product manager, even if the market for technical talent is heating up.

At the high end, I have heard of product managers earning 40 lakhs (total compensation), who got no pay hike for 4+ years, after changing multiple jobs to reach this level. I also know of product managers who have seen a compensation growth from 16 lakhs to 42 lakhs in 6 years in the same firm.

It is not difficult to then make a case for either staying in your current firm, or for moving to another job, based on a 3-4 year income projection from the current job or the target job in a new firm. Of course, such a skilled person also has international mobility, and can always move to an economy where he would earn more, but that is a different story.

What’s your Compa-Ratio?

A product manager’s CTC (cost to company) can have many components, which are mainly broken down into the following:

  • base salary
  • variable pay
  • retirals
  • stock (ESPP, RSU, Stock Grant etc.)
  • bonus (joining, annual, shipping bonus etc)

Knowing that there are so many CTC components makes it difficult to evaluate competing job offers or even “quote a salary”, as is commonly demanded by recruiters these days.

For offshore product managers, one way to benchmark your salary is to find out your compa-ratio at your firm. The Wikipedia link has the basic explanation of what a compa-ratio is, and how it is applied during recruitments and performance appraisals. In a large firm, this is the direct way to find out if you’re paid above average, at par, or below average. And actually, this also has a good correlation to your past performance, your relationship with managers and the industry performance as well. So knowing or guessing your compa-ratio puts you in a good situation during the salary negotiation time both within the firm or when you have an offer in hand.

For startups, smaller firms or Indian technology firms, you might not find this information from your HR contacts. In this case, one alternate is to trawl the web with queries such as “salary for X role” in “City Y” [ I get some traffic on the blog from these queries too!]. And thankfully, there is quite a lot of reasonably accurate information on this available in 2013, compared to the situation five years ago. These give some pointers on the potential offer, given your current compensation, the industry standards and the salary at the company in question.

One final thought, given the limited risk-reward situation in high-tech product management, it would be wise to only compare base salary as a lump and all variable components as another lump. I have posted about this before.

A Word on Salary and CTC in India

I have seen many people having doubts on whether they are adequately paid for their role and work experience. They are often confused about comparable offers, and how their CTC (compensation on Cost-To-Company basis) compares with the CTC in another firm.

Well, there are ample resources on the web for research on current salaries, salaries for similar roles in comparable firms and salaries in product management roles within the corporate hierarchy. Some of the more useful ones for product managers include:

You should thoroughly investigate these to find out where you stand (in case you are interested in such data).

Additionally, you should also be aware of the different components of the compensation offered. For offshore R&D centers in India, the total compensation could include base salary, variable pay, performance bonus, RSU/Stock/ESOP, joining bonus, relocation allowance, retiral benefits and other smaller components. If you are joining a local market Indian firm, you can potentially expect even more components in your appointment letter to pad up your offered compensation on a CTC (Cost to company) basis.

More points to ponder

  • Some firms add non-cash component to CTC, which could include education/training reimbursement, payment for industry certifications etc. Exclude them when comparing CTC from different jobs.
  • Some firms include retirals (PF and gratuity) within their CTC, while others exclude it.
  • Some firms will consider the performance bonus mentioned in the offer letter as the upper limit. So you can only receive up to 100% of the bonus. Others use the mentioned bonus as a median, and you can receive more than that under favorable circumstances.
  • Product management roles should not have variable pay, I have written about it here. You can still see as a part of total compensation in some firms.
  • RSU/Stock Grant/ESOPS etc are usually offered only if negotiated for during the hiring process (to sweeten the deal), or at the annual performance appraisal. They are normally excluded from CTC calculations for a variety of reasons.
  • Signing bonus and relocation amount (if offered) are part of a standard deal in most firms. There is little room to negotiate on this.
  • Many firms are open to increasing their offer by up to 10% for the right candidate. But this only happens if there is a perfect fit between candidate, position and hiring manager.
  • Startups can offer stock or stock options or future stock options. In most cases, these are worthless, as there have been very few IPOs (a rare exception is Makemytrip.com) and this is likely to continue. So consider only the cash component when evaluating the CTC at startups.

Web Product Manager Recruitment Ad – 5

On Feb 8th, Ebay posted a recruitment ad for a Director, Product Management in Bangalore.

The complete JD is available on the link above. In December 2012, they had hired Ramkumar Narayanan, VP Product Management, Yahoo!, as the GM for their India center, so their focus is shifting to Bangalore. Should be an exciting time to join them.

Location: Bangalore
Desired Qualification: Long list of experience, capabilities and personality traits listed in the ad
Desired Experience: Not mentioned

Here are some points to consider about the role and the firm:

  • This looks like a new, senior level role in their eBay India Center of Excellence.
  • The ad mentions the job title as Director, Product Management 1 – Tech. so it is definitely for someone with a strong product engineering background.
  • Networking skills and industry reputation will be the key to getting an interview for this role.
  • Based on data available on glassdoor.com and other internet sources, the typical salary for this role should be more than 45 lpa CTC. This would exclude RSU/Stock Grant/ESOPS or other bonuses. The ceiling could be a total package of Rs. 65-70 lakhs all inclusive for a very, very good candidate.
  • Roadmapping is a key requirement for this role, and hence someone with an MBA and many years of product management experience should be an ideal fit.
  • The role will involve building and grooming a team of product managers. Given that such roles typically go to people with an MS/MBA from a top school in the US and significant US work experience, the product managers hired later would likely have a similar profile.
  • You can expect ads for junior level product managers once this position is filled out.
  • India engineering, US senior management and India leadership team will be the key stakeholders.
  • This role is unlikely to carry P&L responsibility for a product line, but would probably focus more on building the product management competency in India.
  • Growth after this role could be to another organization in the e-commerce space or an IT consultancy or strategy firm. Or you could join a startup as a CEO, CXO etc.

Disclaimer: I have a lot of respect for Ebay.com. This post is only provided to prospective PMs to help them to interpret job ads for product managers

If you have applied/joined somewhere for a web PM role similar to this, then drop me a comment, and we can discuss the same.

The “Big 5” of Offshore R&D Centers in India

Based on some basic internet searches, it seems that India has over 1000 offshore R&D centers of various MNCs. And while these are not restricted only to IT, it is the IT R&D centers that of interest to us. So which offshore R&D centers have the most Product Managers in India and which ones offer the highest compensation? Well, these are not easy questions to answer, mainly due to the wide variety of work done by these centers. And very few of them are offering product management in India. But here are my indicative lists.

Top 5 R&D Centers by compensation offered to PMs

Top 5 R&D Centers by Product/Program Manager headcount

Top 5 Enterprise Software R&D Centers

Now the fine print:

  1. The list is completely subjective and based on personal research. I make no guarantees about its accuracy.
  2. These lists cover all product management roles ranging from P&L owners with experience of 10-15 years to business analysts fresh out of engineering/business schools.
  3. Most of these are Bangalore based with a few based out of Pune/Hyderabad/Chennai/NCR
  4. A few organizations have some product management functions in India, focused on the Indian market. I have not included them here.
  5. Microsoft has program managers in India, who do similar work as inbound product managers.
  6. Quite a few IT services firms have product management roles, however, they offer less compensation and are not included here.

Will update this post, based on the feedback I receive

Offshore Product Manager Recruitment Ad – 5

Druva Software has a job posting for a product manager on LinkedIn. This was created today, and it looks like one of the least informative job ads you can come across. However, Druva is one of the rare technology product startups in India, which also has good traction in the market, so it makes sense to understand the job requirements.

Here is some more information:

Location: Pune, India

Designation: Product Manager

Job Description: Drive product development – from conception to launch – at the #1 Endpoint backup company

The ad vaguely describes the role and responsibilities and ends with a description of Druva. However, you can consider the following points while applying for the role.

  • This is an offshore enterprise product management role, with some exposure to the Indian market.
  • The total work experience expected is not more than 5 years. So the salary offered would not be more than Rs. 6-8 lakhs (considering that Pune is a Tier 2 city), and Rs. 10 lakhs at the high end.
  • Only 1-2 years of actual product management experience is expected from candidates. As the company operates in a niche segment, you can apply with any enterprise product management background. Domain expertise is probably not important.
  • This is a very junior role and the work will be equivalent to that done by IT Business Analysts. Use case development and visual design will be useful skills here.
  • Druva had their 2nd round of funding in the middle of 2011, and they have launched few products since then. Do not expect to lead any product launches there initially.
  • The work could be mainly about enhancements to existing products and might include competitive analysis and market research.
  • Fresh MBAs and Senior software engineers can consider this position favorably. A top college MBA will probably be overkill, someone from Tier 2 MBA colleges or an engineering degree and a background in storage technologies will fit better here.
  • Since it’s a startup do not expect much career growth unless the firm grows substantially or is acquired. You can leverage this to join a larger technology firm later. However, you will have to spend a minimum of 3 years in this firm to get a good salary and a track record in product management. Otherwise you could move to a client facing or a solution sales role within the firm.

Disclaimer: I have a lot of respect for druva.com. This post is only provided to prospective PMs to help them to interpret job ads for product managers