Sounds like its about time the Indian tech giants go for the long-awaited salary hikes
Tata Consultancy Services (TCS), the largest IT company in India, is reportedly offering a 12-15% salary hike to its top-performing employees in an effort to retain them. This move, coupled with the slowdown in the job market, is expected to decrease the company’s attrition rate from 20% to 13-14% in the second half of the current fiscal year.
salary hikes -TCS has been grappling with high attrition rates, as IT services companies poached employees to meet their growth needs when businesses reopened post-pandemic. In the December quarter, TCS saw attrition of 21.3%, while rival Infosys saw attrition of 20.9% in the March quarter, down from 24.3% in the previous quarter. Wipro and HCL Technologies are expected to announce their results on 27 and 20 April, respectively. (salary hikes)
TCS is also considering increasing the base salaries of campus recruits, a decision that could prompt rival companies like Infosys, HCL Technologies, and Wipro to follow suit.
Image: Infosys office at Pune
According to Milind Lakkad, TCS’ Chief Human Resources Officer, high-performing employees can expect a salary increase of 12-15%, while those not performing well will receive 8%, 5%, or 1.5%. Junior cadres who performed well last year received an 11% bonus, while those in senior cadres received a lower one. Junior executives were also given a 100% bonus in the first quarter of January-March. Lakkad emphasized that these measures are being deployed to combat the issue of high attrition rates. (salary hikes)
Despite the shrinking job market in the IT sector, TCS hired around 44,000 employees from campuses last fiscal year and plans to hire another 40,000 in the current fiscal year. Consequently, Lakkad expects attrition to decrease from 20.1% in the March quarter to pre-pandemic levels in H2FY24.
TCS had an attrition rate of 21.3% in the December quarter as other IT service companies poached employees to meet their growth needs post-pandemic. However, layoffs and hiring freezes due to the global recession and geopolitical issues have led to a decrease in counter-offers and negotiations in the past few quarters. (salary hikes)
In a significant change in the hiring approach of IT service companies, TCS may increase the salaries of campus recruits, which could set a precedent for its competitors. Currently, the base salaries for campus recruits range from INR 3-3.5 lakh, while more skilled engineers can receive offers of up to INR 7 lakh. Salaries for campus recruits have not increased in nearly a decade due to the abundance of available talent.
In addition to offering salary hikes and considering base salary hikes for campus recruits, TCS may also offer incentives to new recruits to upgrade their skills within a specific timeframe. The company has cited US visa delays as a hindrance to its human resources and its talent’s ability to gain global exposure. Lakkad stated that he would like to see the visa process relaxed further to allow more employees to go to other locations and have global work exposure.
The waiting period for US B1 and B2 visas often exceeds a year, which impacts IT service companies that need to send their employees off-site for projects.
