India’s largest IT services company Tata Consultancy Services will give 100 percent of the variable pay for Q2FY24 to employees whose payouts are linked to the company’s performance, it said on October 11 after announcing its results for the quarter. In effect, 70 percent of the company’s workforce will receive the full variable payout. The variable payout for the remaining employees is based on business unit performance.
“We are going to have 100% variable pay for 70% of our workforce. The rest of the workforce will get paid based on the business unit performance,” Chief Human Resources Officer Milind Lakkad said.
The company had paid out 100 percent of the variable pay in Q1FY24 as well. TCS’ peers Infosys and Wipro rolled out 80 percent variable pay in Q1. The company also completed its wage hike in Q1, while it has been delayed for companies such as Infosys, Wipro, and HCLTech.
TCS saw a decline in headcount of over 6,000 personnel in Q2FY24, which it attributed to the investments in talent it has made previously, and is now looking at improving utilisation and productivity.
Attrition on the wane
Lakkad told the press that there is reduced attrition and that the company has recalibrated its hiring numbers leading to the decline in headcount from the end of last quarter.
Attrition has been on a downward trajectory, coming in at 14.9 percent on the last-twelve-months basis, down from last quarter’s 17.8 percent.
“Our strategy of proactively hiring bright freshers and investing in training them with the right skills is paying off. With that talent coming on stream and with reduced attrition, we were able to recalibrate our gross additions, keeping it below the departures during the quarter, driving up productivity, and enhancing project outcomes,” Lakkad said.
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