The hype called salary hike in Indian software companies

From 1969 until 2013, India Inflation Rate averaged 7.73 Percent. Which means today's 10Rs equals last year's 9.25 Rs, and next year's 10.75 Rs.

Unfortunately, this rate is approximately equal to the annual hike we get in software companies here in India.

So from the context of a single employee, the salary he gets every time is the same as the offer he got when he started his career a fresher out of college. Modest gratuities and once in 5 yr hikes apart, this is the standard across the industry. If he wishes any more improvement in compensation, he needs to jump from one company to another, which draws an average of 30% hike. But company jumping needs some 2-3 yrs between them otherwise he's considered a 'frog' - someone who jumps too much.

For an average Indian software engineer, if he jumps once in 3 yrs with a hike of 30%, the annual hike comes around 10%. Provided he jumps at the best time - just after receiving the annual hike letter from his company. Otherwise he'll miss the hike in the previous company which is going to affect the offer from the next company. If he jumps before getting the annual hike, he'll not be considered for the appraisal cycle in the next company too, because he won't be completing the required period in the new company to be considered for the appraisal cycle.

In short, if an engineer aims at 10% hike per year, he should switch companies at least once in every 3 year - with proper planning.

This is how the attrition rate is ever-rising in software industry here. This is why the so-called brain-drain happens here.