Tag Archives: product manager salary

Product Manager Recruitment in India is in Trouble

Some issues which I came across, and have posted about before:

  • Candidates barely get to speak to hiring managers during the recruitment process. A colleague mentioned how he was interviewed by a solution architect and the HR manager for a PM role in an IT services firm.
  • You are likely to find a “young inexperienced star” running the product function in many startups today, who then looks for senior, experienced folks to report to him.
  • Hiring managers in most startups are unable to understand the job needs and make generic job specification (very common across e-commerce websites).
  • Resumes are so filled with jargon that they give no sign of a candidates skills, capabilities or achievements.
  • 90-95% of applications on job portals may not be viewed by a human.
  • PM training is reduced to a few certifications or some short term courses.
  • Promoting from within (along with limited PM training) is reducing the firm’s ability to actually deliver great products.
  • Recruitment teams are not able to filter good candidates, which is why candidates should start networking with anyone at the firm who can promote their application.
  • Many business analysts or solution architects are positioning themselves as product managers, without having the necessary skills to do a good job.

More to follow

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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.

True Story: Compensation Negotiation at an MNC R&D Center

negotiations

The Candidate

My friend has a strong technical background. He complete his B.Tech. from an NIT, worked for 7 years in different IT services firms, spent 3 years in the US, and then returned to do his MBA at an IIM. Being a savvy person, he opted for the 1 year PGP program for senior executives, where he got in because of his engineering undergrad, his overseas experience and good GMAT scores. Post MBA, he joined a firm in Hyderabad as a product manager.

The Interview and Subsequent Discussion

In 2008, he was working in an offshore enterprise product management role in a large R&D center focusing on enterprise IT. Around 2008, he was approached by another enterprise software firm, that was looking to hire senior product managers for their center in Bangalore. [They are big on telecom, and he has a strong background in that domain.] He went through multiple rounds of interviews (one of them was an overseas phone interview) and the HR indicated that they were ready to roll out an offer.

The HR manager asked about his current compensation and breakup. At that time, he used to get 18 fixed + 2.5 variable + 1.5 signing bonus + 1.5 worth of stock every year for a total package of Rs. 23.5 lakhs per annum. They asked about his salary expectation, he indicated that he was expecting a cash package of Rs. 30 lakhs and other benefits on top.

Obviously, the HR team did not wish to give a 30% increment to him, so they offered 25 cash + 2 lakhs signing bonus. Now, this happened during the last IT boom in Bangalore, and a sign-on bonus was commonplace. He refused to budge from his demand. After 2 conversations, they finally offered him 27 lakhs and a 2 lakhs signing bonus (apparently, stocks were only offered on performance after joining). He refused and continued with his current firm.

In early 2009, he was again approached by the same firm for another product management role. By this time, he had completed a year in his current firm, and gotten a 15% salary increment due to his strong performance. He went through 2 rounds of interviews and was then offered a salary of 35 lakhs but no signing bonus. He accepted the offer and happily joined the firm.

What this means for PM candidates

Several things become very obvious after learning about this. First, if you are a strong candidate, have a good background and a stable job, it is easy to demand your own salary. Second, if you are not fully satisfied with the compensation offered, then you can always say no without any risk. Third, he never told his existing firm about the first offer he got, thereby ensuring that he was not sidelined during performance evaluation. So the complete discussion could be held again without putting his existing job at risk.

One last thing to note, the new firm had asked for a reference from his earlier managers. He offered a fellow manager as a contact and not his direct supervisor to avoid any problems in the reference check after he had resigned and before the offer was finalized.

Note: salary figures are accurate, as are the technology domains

The Startup PM Recruitment Scam in India

So you are a Product Manager looking for an opportunity to work in a small team, and you see a job ad for a startup. It says that they need a product manager and the job description is really exciting. You immediately customize your CV and shoot it over to the recruiter and start preparing for the interview call. Unfortunately, in the vast majority of cases in India, it is a scam.

An employment scam in the simplest form is a recruitment event where there is no intent to hire a candidate. It can be related to a general recruitment drive, where the intent is to obtain payments from candidates. This practice is illegal and widely covered in Indian media, here are one, two and three stories from the past month alone.

The Startup PM Recruitment Scam

A related scam that has come up now is in the field of Product Manager recruitment by startups in India. The way it works is this:

  1. The startup release an ad seeking resumes for PM roles
  2. It keep the job requirements vague to attract widest variety of resumes
  3. Candidates are shortlisted if:
    1. They are working for or have recently worked for a competitor
    2. They have useful domain knowledge or are from a top college (IIT/IIM/ISB)
    3. The hiring manager is curious about them, their salary etc
  4. After getting shortlisted, the candidates are called for an interview

The interview is actually an opportunity for the hiring manager to learn about the competitor, to get ideas for implementation in his firm and to research how other firms are solving problems in a specific domain (e.g. web analytics experiment design in e-commerce).

How to identify a fake interview?

A huge red flag in such interviews is the focus on questions such as “identify 3 issues with our current website/product and how you would solve them”, or “work with us as a paid consultant for 2-3 days to identify a new market opportunity in the VAS space” or “write-up a detailed proposal on how you would introduce a service into the Indian market” or “find 2 ways to improve our product/feature”. The idea behind these questions is not to test the candidate, but to actually get new ideas for product development.

After the interview, the candidate gets a polite rejection letter and the cycle restarts with the next candidate. This is completely unethical, and a startup e-commerce firm in Bangalore, a matrimony portal and some product development startups are known to indulge in this practice. A quick scan at the company reviews on glassdoor.com will reveal which firms use candidate interviews for ideation only.

Also, in case your compensation comes up in the shortlisting process, and you know that you are highly paid (you can check this on glassdoor.com, payscale.com etc) as compared to the hiring company then it is very likely that you are going to have a fake interview, which will not proceed beyond a phone call.

How do you avoid this?

It is pretty simple actually, if called for an interview you must:

  1. Review the feedback of other candidates called for interviews
  2. Decline all questions related to the live product, or analysis of a new opportunity in the same domain
  3. Explain that you cannot reveal confidential details about their competitor (your former employer), and they should focus on your skills and expertise
  4. Insist that they focus on case studies or other methods of interview (competency based interview etc) at this time
  5. If they want to work with you for a short while to check the “fit”, then ask for a 3-month, consulting assignment at a reasonable pay. This will give you time to search other jobs, and keep you working in the same domain

The pressure to agree

In this slowing economy, when interviews are hard to come by, it is very hard to not agree to almost anything asked by the recruiter. Just remain confident that the people who are actually hiring, will hire you in a professional, ethical manner, and if you are seeing these red flags, then you are extremely unlikely to be hired anyways. Maintain your poise and calm and this will actually help you in the long run.

In a future post, I will explain why this scam is less prevalent in established firms.