TCS hopes that this move, along with the slowdown in the job market, will reduce attrition from the current 20 per cent to 13-14 per cent in the second half of the fiscal year.
New Delhi,UPDATED: Apr 18, 2023 17:09 IST
One of India's largest IT firm, Tata Consultancy Services (TCS), is planning to give a salary hike of 12-15 per cent this year to its top-performing employees in an effort to retain them. TCS hopes that this move, along with the slowdown in the job market, will reduce attrition from the current 20 per cent to 13-14 per cent in the second half of the fiscal year.
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Milind Lakkad, Chief Human Resources Officer of TCS, stated, "For high performers, we are looking into [pay hikes in] the 12-15 per cent range. Everybody else, basically, we have 8 per cent, 5 per cent, and 1.5 per cent for those who are not performing." Last year, top performers in junior cadres received an 11 per cent bonus, while those in senior cadres received a lower one. In the first quarter of January-March, junior executives were granted a 100 per cent bonus.
Despite the shrinking job market in the IT sector, TCS hired 44,000 employees from campuses in the last fiscal year and plans to hire another 40,000 in the current fiscal year. Lakkad expects attrition to decrease from 20.1 per cent in the March quarter to pre-pandemic levels in the second half of FY24.
"It will come down from 20 per cent...pre-pandemic level, it will go to 13-14 per cent," Lakkad said.
TCS witnessed an attrition rate of 21.3 per cent in the December quarter as IT services companies poached employees to meet their growth needs when businesses reopened after the pandemic. However, global recession and geopolitical hurdles have led to layoffs and hiring freezes in many global firms in the last two-three quarters, resulting in a decrease in counter-offers and negotiations.
In a significant change in the hiring approach of IT services companies, TCS is considering raising its campus salaries for freshers, setting a potential precedent for rivals like Infosys to follow.
"We may, you know, we are thinking about it," Lakkad said. The battle for talent plays out on campuses, where IT service firms recruit in large numbers. Currently, salaries for campus hires range around INR 3-3.5 lakhs, while more skilled engineers can receive offers of up to INR 7 lakhs.
IT companies have not raised their campus salaries in almost a decade due to the availability of ample talent. TCS may also introduce incentives to allow new recruits to upgrade their skill sets over a certain timeframe.
TCS also highlighted that delays in US visas were impacting its human resources and preventing its talent from gaining global exposure. "We were able to deal with [US visa delays] for the last two years, and we can deal with it. From a people's standpoint, I would like this to be relaxed a lot more because I can provide a lot more of the percentage of people to go quickly to other locations and have global work exposure," Lakkad said.
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The waiting period for US B1 and B2 visas has often exceeded a year, affecting IT service companies that need to send their employees off-site for projects.
TCS's move to give salary hikes to top-performing employees and potentially raise campus salaries for freshers is expected to have an impact on the IT job market in India, as it could prompt other companies in the sector to follow suit.
Published By:
sneha saha
Published On:
Apr 18, 2023
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