India’s largest IT services exporter, Tata Consultancy Services (TCS), has rolled out 100 per cent variable pay for employees
TCS Variable Pay: India’s largest IT services exporter, Tata Consultancy Services (TCS), has rolled out 100 per cent variable pay for employees up to C2 grade, while employees above the grade would be awarded variable pay as per business performance, for the third quarter of FY 2022-23. “A decision has been taken to pay 100 per cent of the quarterly variable pay (QVA) to all employees up to C2 or equivalent grades covered under this plan”, read an email sent from the office of the Chief Human Resource Officer of the company, Milind Lakkad.
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Furthermore, the email detailed the variable pay of employees who fall in grades above the C2 level. “The individual payout for C3A or equivalent grades and above may vary depending on the business unit performance”, it added.
An employee of the company explained that C3A grade and above at TCS houses mid to senior-level employees. He explained, “C2 grade has employees with a minimum 4 years’ experience, so relatively they are not very senior. Above that is a C3A grade. The positions start with Assistant Consultant. C3A is sort of entry into mid-level and above that is mid to senior level positions.”
In Q2 FY 2022-23, the company had released variable pay to 70 per cent of employees, while others had been awarded variable pay as per business unit performance.
TCS’ headcount during the December 2022 quarter fell by 2,197, according to its regulatory filing on Monday. Its workforce strength as of December 31, 2022, stood at 6,13,974. However, the attrition rate of its IT services segment stood at 21.3 per cent during the December 2022 quarter, which is marginally better than 21.5 per cent in the previous quarter.
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TCS headcount has declined for the first time in 10 quarters. A contraction in the company’s net employee addition was last seen in the June 2020 quarter, which was the first full quarter after the pandemic was declared in March 2020.
Milind Lakkad, chief HR Officer, said, “Our focus over the last few quarters on bringing in fresh talent at scale, training them on new technologies and making them productive is paying off. We are particularly proud of having 125,000 TCSers at middle and senior levels who have been with the company for more than 10 years on average.
He said they have been central to the successful cultural integration of all the fresh talent TCS has onboarded in the last couple of years, and their contextual knowledge and customer-centricity have been key to the high level of customer satisfaction that TCS is known for.
During July-September 2022, TCS had reported a net addition of 9,840 employees. With this, the company’s workforce as of September 30, 2022, had stood at 6,16,171.
For the December 2022 quarter, TCS has reported a consolidated net profit of Rs 10,846 crore, a jump of 11 per cent on a year-on-year basis. During October-December 2022, TCS’ revenue rose 19.1 per cent year-on-year to Rs 58,229 crore.
The company’s operating margin during October-December 2022 stood at 24.5 per cent, which a contraction of 50 basis points (100 bps is equal to 1 percentage point) as compared to last year. Its net margin during the quarter stood at 18.6 per cent.
