3.2 LPA vs 25 LPA – Why Such a Huge Salary Gap in IT? Land Your First High-Paying Software Job!

Summary

This video delves into the stark salary differences between engineers in service-based and product-based companies. The speaker explains that the compensation gap is not due to talent but rather the work culture, innovation, and company focus. Service companies often work on client-specific projects with limited innovation, while product companies focus on developing their own products, leading to higher pay. The speaker offers valuable advice on moving from low-paying service roles to high-paying product roles, emphasizing the importance of mastering DSA, building real-world projects, optimizing your resume, and targeting the right companies. With experience, the growth opportunities and compensation in product companies are substantial.

Takeaways

• 😀 Product-based companies pay higher salaries than service-based companies due to their focus on innovation and product development.
• 😀 Service-based companies are focused on delivering client requirements, leading to less room for innovation and lower compensation.
• 😀 Engineers working in service-based companies are typically hired for specific client projects, often working with legacy technologies.
• 😀 In product-based companies, engineers are expected to have strong problem-solving skills and contribute to product development and innovation.
• 😀 DSA (Data Structures and Algorithms) is a crucial skill to master for securing high-paying jobs in product-based companies.
• 😀 The salary progression in service-based companies is slower, with lower increments, while in product companies, salary hikes are based on performance and can be significantly higher.
• 😀 The compensation in product-based companies often includes stock options and other benefits in addition to base salary.
• 😀 Moving from a service company to a product company can result in a substantial increase in salary and job satisfaction.
• 😀 Product companies value engineers who bring innovation, while service companies primarily offer compensation based on billable hours and client needs.
• 😀 Continuous learning, building real-world projects, and optimizing your resume are key steps to transition to higher-paying roles in product-based companies.

Q & A

Why is there such a significant salary difference between two freshers with the same degree and in the same country, one earning Rs. 3.6 LPA and the other Rs. 25 LPA?

The salary difference is largely due to the type of company they work for—service-based versus product-based companies. Product-based companies tend to offer higher salaries due to greater revenue generation from their products, requiring strong problem-solving skills and innovation from employees, which is reflected in higher compensation.

What is the main difference between service-based companies and product-based companies?

Service-based companies work on client projects, providing services based on the client's needs, often with less focus on innovation. In contrast, product-based companies develop their own products, focusing on innovation, value creation, and long-term growth, offering better compensation to employees.

Why do product-based companies pay more compared to service-based companies?

Product-based companies generate revenue from the sale of their products and services, such as subscriptions and ads. This generates more profit, which can be shared with employees in the form of higher salaries. Additionally, employees are expected to contribute to product development, requiring strong problem-solving and innovation.

What is the compensation structure in service-based companies versus product-based companies?

In service-based companies, a fresher earns between Rs. 3-6 lakh, with salary increases based on experience. For product-based companies, a fresher can earn between Rs. 15-25 lakh, with compensation potentially increasing significantly as experience grows, including stock options and bonuses.

What is the key focus of work in a service-based company versus a product-based company?

In service-based companies, the focus is on delivering services according to client requirements, often involving legacy systems or repetitive tasks. In product-based companies, the focus is on creating innovative solutions, optimizing products, and continuously improving user experience, providing a more dynamic and creative work environment.

What skills are most important for securing a high-paying role in a product-based company?

Strong problem-solving skills and proficiency in Data Structures and Algorithms (DSA) are crucial. Additionally, familiarity with cutting-edge technologies such as AI, cloud services, full-stack development, and modern programming languages is essential. Practical experience through real-world projects is also highly valued.

How can a fresher transition from a service-based company to a product-based company?

A fresher can transition by mastering DSA, working on real-world projects, building a strong portfolio, and applying to product-based companies that focus on innovation. Optimizing your resume, networking, and targeting the right companies based on their technical focus can also increase the chances of success.

What is the typical work culture in a service-based company compared to a product-based company?

In a service-based company, work is structured around client needs with less room for innovation, and often requires working on legacy systems. In a product-based company, employees are encouraged to innovate, and there is more flexibility in work hours, along with opportunities for creative problem-solving and ownership of projects.

What role does ownership and impact play in a product-based company?

In a product-based company, employees are often given more responsibility, and their work directly impacts the product and its users. This sense of ownership leads to a more rewarding experience, with higher potential for career growth, innovation, and job satisfaction.

How can someone build a strong resume and portfolio to apply for high-paying product-based companies?

To build a strong resume, focus on showcasing your DSA skills, coding achievements on platforms like LeetCode and CodeChef, and your real-world projects. Creating a personal portfolio website that highlights your skills, resume, and completed projects can increase your visibility and credibility when applying for jobs in product-based companies.