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Tata Consultancy Services (TCS), India’s largest IT services firm, is planning to increase salaries by an average of 7-8 per cent for its offsite employees and 2-4 per cent for its onsite staffers in 2024-25.
High performers can expect a raise of 12-15 per cent.
The company, which had a headcount of 603,305 as of December 31, 2023, will be closely looking at the promotions and the process may also get pushed to the first quarter of FY25, revealed a source on condition of anonymity, because he is not authorised to speak to the media.
These increments will be effective April 1, 2024.
“The salary increment process is nearing completion, but promotions, especially at the top level, are under strict scrutiny due to cost concerns,” said the source.
"In an email response, TCS spokesperson said: “As per policy, we cannot comment on speculation.”
In FY24, the firm announced salary hikes largely in the 6-9 per cent range, with high performers receiving increases of 12-15 per cent.
TCS is also concentrating on nurturing young talent and promoting reskilling and upskilling.
Top performers in the junior cadre received a raise of 10-11 per cent in FY24, a trend that is likely to continue into FY25.
“While the hiring numbers for FY25 are being worked on, the company is clearly focused on upskilling and reskilling the existing cadre of employees.
"This is true even at the senior level, and lateral hiring is being done only at positions which are highly specialised,” said a human resource firm that has a part mandate for lateral hiring.
Earlier, Milind Lakkad, chief human resource officer at TCS, stated at the media briefing for Q3FY24 results that the IT major had begun campus recruitment for freshers.
Although he did not disclose the number, he indicated it would be similar to FY24, when TCS extended offers to 40,000 campus freshers.
This is noteworthy as firms like Infosys and Wipro did not visit any campuses and were late in onboarding freshers.
On the timing and the hike ranges, HR experts said TCS is being consistent and sending assuring signals to its employee base.
“From the hike range perspective, it’s in the competitive sphere that you would see across the peer group this year.
"This hike also sends a signal that even as green shoots are yet to be visible, the company is making sure that it retains its current talent for the deals that it has won in recent times.
"It is also making sure that its digital talent is engaged until growth comes back,” said Kamal Karanth, co-founder Xpheno, a specialist staffing firm.
TCS’ attrition rate has been normalising, standing at 13.3 per cent for the third quarter of FY24, down from 14.9 per cent in the previous quarter.
K Krithivasan, chief executive officer and managing director of TCS, recently expressed cautious optimism about the demand environment in the medium to short term, predicting that “next year will be better than this year”.
“The reason being is that some of the large verticals will start seeing green shoots.
Hence the optimism,” he said, while speaking at the Nasscom Leadership Technology Forum.
Despite a slowdown in growth in FY24, TCS has consistently provided salary hikes to its employees.
In contrast, Infosys delayed its salary hikes in FY24, announcing them in December 2023, effective November 1, 2023.
Wipro also delayed its annual salary hike cycle by a few months and capped the variable pay for the first quarter of FY24.
Salary hikes in IT services firms are generally announced in the first quarter of a financial year.
