IT major Tata Consultancy Services will be paying out 100 percent of the variable pay to 70 percent of its employees for the second quarter of FY23.
Chief Human Resources Officer Milind Lakkad had announced this on the company’s call with analysts on Monday, October 10 after it declared its results for the second quarter.
"The remaining 30 percent of employees will be paid [the variable pay] based on the business unit performance,” Lakkad said.
For Q1, TCS had said it did not delay variable payout to employees, and that it was fully paid out to all employees. In a statement in August, the company had said that the variable pay is paid either in the first or second month as per the normal process.
TCS’ peers Wipro and Infosys had both slashed variable pay for the first quarter. Wipro had held back variable payouts to mid and senior level employees and paid out 70 percent of the variable pay to junior employees. Infosys, on the other hand, had slashed average variable payout to 70 percent.
TCS hired 20,000 freshers in the July-September quarter, and onboarded a little over 35,000 freshers during the first half of the fiscal year. While its previously announced fresher hiring target for FY23 was 40,000, TCS said it expects to hire 10-12,000 more freshers. Lakkad said the company will decide on its new targets for fresher hiring after the third quarter.
He said that TCS has honoured all the job offers the company made.
The firm's attrition during the quarter inched up to 21.5 percent on an LTM basis, up from 19.7 percent sequentially.
“The technology job market which had overheated in the last few quarters has begun to cool off, and compensation expectations of new hires are also becoming more realistic. With supply catching up across the industry, the pressure to poach experienced talent is easing so we should start seeing the churn settling in the coming months,” Lakkad said.
Attrition, the company’s leadership said, is expected to have peaked in Q2 and will taper down from here on.
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