India’s largest information technology firm, Tata Consultancy Services (TCS), is set to revise its payments to staffing firms for the deployment of engineers, marking the first such adjustment in six years.
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New pricing structure and timeline
The new pricing structure will become effective in January, as per a report in Mint. Moreover, existing vendor contracts will remain valid until December 2023, with the new contracts taking effect in January 2024.
TCS’s pricing structure encompasses the full cost of candidate placement, which includes salaries, vendor expenses, and insurance. The intended outcome of this pricing adjustment is to enhance transparency, potentially benefiting both staffing firms and TCS by making the company more attractive to highly qualified candidates.
This change in rate cards applies specifically to contract staffing employees, not permanent staff. Contract employees constitute a significant portion of the workforce for IT companies.
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Why is TCS revamping its pricing structure for staffing agencies?
The adjustment in pricing policies coincides with recent developments in TCS’s hiring process. The company initiated an inquiry in February and March after discovering that some of its employees had allegedly favored certain staffing firms over others and accepted payments in exchange for job offers at TCS.
As a result, TCS terminated the employment of its former head of the resource management group, E S Chakravarthy, and eight other individuals involved in the hiring process. Furthermore, TCS blacklisted six staffing firms.
Bribes for Jobs at TCS
The “bribes-for-jobs” scandal at TCS involved allegations of senior officials accepting bribes to influence hiring decisions, following a whistle-blower complaint in late April or early May. TCS subsequently acknowledged that some employees and vendors had violated the company’s Code of Conduct.
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In response, TCS issued a statement emphasizing that the Resource Management Group (RMG) was not responsible for recruitment activities but rather for allocating available resources to projects and filling gaps through contractors when necessary. The complaint in question pertained to the hiring of contract resources employed by these contractors.
