Mumbai: Tata Consultancy Services Ltd (TCS), India’s largest IT firm, is set to offer 12-15% pay hike to its top performing employees to retain them on board. The company expects this move, combined with a slowdown in the job market, to bring down earnings from 20% to 13-14% in the second half of the fiscal.
The company is also considering a hike in the base salary of campus recruits, a decision that may prompt rivals such as Infosys, HCL Technologies and Wipro to follow suit.
“For high performers, we are looking [pay hikes in] 12-15% range. TCS chief human resources officer Milind Lakkad said, “Everyone, basically, we have 8%, 5% and 1.5% who are not performing.” Those in the senior cadre got one less. Additionally, in the first quarter of January-March, 100% bonus was given to junior officers.
Despite a shrinking job market in the IT sector, TCS hired 44,000 people from the campus last fiscal and plans to hire another 40,000 in the current fiscal. As a result, Lakkad expects growth in the March quarter to decline by 20.1% in H2FY24 over pre-pandemic levels.
“It will come down from 20%…pre-pandemic levels, it will go up to 13-14%,” Lakkar said.
TCS saw a decline of 21.3% in the December quarter as IT services companies poached employees to meet their growth needs as businesses reopen after the pandemic.
However, in the last two-three quarters, layoffs and hiring freeze at many global firms due to global recession and geopolitical constraints have brought an end to the frenzy.
Rival Infosys saw a decline of 20.9% in the March quarter, from 24.3% in the December quarter. Wipro and HCL Technologies will declare their results on April 27 and 20 respectively.
There has also been a decline in TCS’s counter offers and negotiations. “The instant gratification that has taken place in the last two years has, if not stopped, significantly reduced. It’s the right thing for everyone—for the people more than the organization. Lakkad said that if we manage appropriately what we have done in the last two years, the organization will manage. TCS had a net addition of 821 employees in the March quarter.
In a major change in the recruitment approach of IT services companies, TCS may increase its campus salary for freshers, setting a precedent for rivals like Infosys.
The CHRO said, “You know, we’re thinking about it.” On Large scale, salary swings 3-3.5 lakhs, while more skilled engineers may also get offers 7 lakhs.
IT companies have not increased their campus salaries in almost a decade due to ample availability of talent.
TCS may also introduce incentives to allow new recruits to upgrade their skill sets within a specified time frame. It added that the delay in US visas is harming its human resources and preventing its talent from gaining global exposure. “We were able to deal with [US visa delays] For the past two years, and we can deal with it. From a people perspective, I would like it to be relaxed further because I can see a much higher percentage of people moving quickly to other places and providing global work experience,” Lakkad said.
The waiting period for US B1 and B2 visas often exceeds a year, affecting IT services companies that need to send their employees off-site for projects.
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