Days after IT major Wipro paused variable pay for mid- and senior-level staff, India’s largest IT services company Tata Consultancy Services (TCS) is also following suit and has delayed performance bonus and variable compensation for some employees for the June 2022 quarter, by a month.
The bonus and variable compensation payout will now be paid by August-end, rather than the July deadline. These employees are classified as assistant consultants, associate consultants, and consultants.
According to an ET report, TCS stated that all compensation and bonus cycles are proceeding as planned. According to the report, the quarterly performance bonus is paid out in the payroll that follows the end of the quarter. The company had communicated a “delay” this time.
“The delay is not due to cost concerns. The performance evaluation process has not been completed due to the massive size of the workforce being covered. A minuscule share of the employee base is yet to receive their bonuses which, as communicated, will be rolled out by the next salary cycle,” according to the report quoting a company person.
Meanwhile, IT companies in India have experienced high attrition rates in recent quarters, with more employees leaving their jobs. To combat this issue, many IT firms, including Wipro, Infosys, Tata Consultancy Services, and HCL Technologies, have announced retention measures such as salary increases and bonuses. Wipro employees will see salary increases beginning in September.
The attrition rate at IT behemoth Infosys remains high. To address this, the company is raising salaries and may increase net hiring, which may have an impact on the firm’s near-term margins. The company believes it will reduce attrition, which increased to 28.4 percent in the June 2022 quarter from 27.7 percent the previous quarter.
Infosys chief financial officer Nilanjan Roy has said, “We are fueling the strong growth momentum with strategic investments in talent through hiring and competitive compensation revisions. While this will impact margins in the immediate term, it is expected to reduce attrition levels and position us well for future growth. We continue to optimize various cost levers to drive efficiency in operations.”
TCS intends to raise salaries by 5-8 percent for its employees, following a 19.7 percent attrition rate in the first quarter of the current fiscal year.
TCS salary has been increased by up to 8%, according to the company’s chief HR officer Milind Lakkad, who stated, “Following our annual compensation review, employees received salary increases of 5-8%, with top performers receiving even bigger hikes.” Our empowering, results-driven work culture is assisting us in attracting local talent in all of our key markets.”
Wipro has also stated that raises for its employees will begin on September 1, 2022. Since July 1, 2022, the company has completed the first cycle of quarterly progressions.