India's largest IT services giant, Tata Consultancy Services (TCS), is set to roll out its annual salary hikes, and it seems its over 6 lakh employees will be getting a low single-digit raise.
In line with the industry trend post-Covid-19, TCS will provide a 4% to 8% average hike for the financial year 2024-25 (FY25) at the end of March, reported The Economic Times (ET). Earlier reports had said that the firm gave a 7-8% raise in FY24.
The annual salary increment at IT services has sharply come down in recent years as firms face global spending headwinds. The decline in discretionary spending by businesses has hit earnings of giants like TCS and Infosys. During Covid, these firms reportedly offered double-digit raises.
Infosys, during its Q3 earnings call, said that they would offer a 6-8% raise to their employees. Moneycontrol last week reported that they would roll out the increment later, by the end of February.
TCS Expects a Better 2025
"There are some early signs of discretionary spend. So that is what is giving us that confidence also to say CY'25 could be better than 2024," TCS CEO K Krithivasan said.
The IT giant logged a high attrition rate of 13%. During the third quarter, TCS hired 5,370 employees.
Accrdoing to a Moneycontrol report, TCS attributed the increase in attrition to its decision to "let attrition run its course" and optimise workforce utilisation.
"We hired more in Q1 and Q2, expecting a faster revival. We also knew Q3 would be seasonally weak, so we tried to optimise by not hiring at the same rate and letting attrition run its course," TCS CEO and MD K Krithivasan said.
During the third-quarter earnings call, TCS Chief HR Officer Milind Lakkad informed that they awarded over 25,000 employees promotions between October and December 2024 and expect to promote over 110,000 employees in total in FY25.
TCS reportedly released its quarterly variable pay (QVP) in February for the October-December period. Senior-level employees received lower payouts ranging from 20% to 40%. Meanwhile, around 70% of TCS employees, mostly those in junior-level posts, received 100% of their variable pay.
