“TCS to Award 100% Variable Pay to Junior Employees for Q2FY24”

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Tata Consultancy Services (TCS), India’s leading IT services company, has announced that it will grant a 100 percent variable pay to its junior employees for the second quarter of the financial year 2023-24. This decision was disclosed following the release of the company’s quarterly results.

In a significant move, TCS will provide full variable payouts to 70 percent of its workforce whose earnings are linked to the company’s overall performance. The remaining 30 percent of employees will have their variable payouts determined based on the performance of their respective business units. The company had similarly granted 100 percent variable pay in the previous quarter (Q1FY24).

TCS’s industry counterparts, Infosys and Wipro, had issued 80 percent variable pay during the first quarter. Additionally, TCS had successfully implemented its wage hikes in the first quarter, whereas other major IT firms such as Infosys, Wipro, and HCL Technologies had experienced delays in their wage hikes.

During the second quarter of FY24, TCS observed a decrease in its headcount by over 6,000 employees. This reduction in headcount was attributed to TCS’s prior investments in talent development. Now, the company is focused on enhancing workforce utilization and productivity.

TCS’s Chief Human Resources Officer, Milind Lakkad, emphasized that the company’s approach to recruitment and training of young talent has resulted in a reduction in attrition and improved hiring outcomes. The company’s strategy of hiring and training bright newcomers with the right skills has proven successful. This, coupled with reduced attrition, allowed TCS to recalibrate its gross additions, ensuring that the number of new hires remained below the departures during the quarter. This strategic adjustment has boosted productivity and positively impacted project outcomes.

Lakkad noted that attrition had been steadily declining, with the last twelve months showing a rate of 14.9 percent, down from the previous quarter’s 17.8 percent. This decline in attrition, along with the successful integration of fresh talent and a focus on workforce optimization, positions TCS as a strong player in the evolving IT industry.

TCS’s decision to provide full variable payouts for the majority of its workforce underscores its commitment to reward and motivate its employees, in addition to its efforts to manage attrition and enhance operational efficiency. As the IT sector continues to evolve, TCS’s strategic moves in talent management and compensation pave the way for a resilient and competitive workforce.

Sources By Agencies