Country’s third largest IT services major HCLTech is set to roll out salary increments to mid and senior management staff in the Janauary-March quarter, said Chief People Officer Ramachandran Sundararajan.
This comes after the company’s management entirely skipped compensation review for the mid and senior management staff in FY24. Salary hikes for senior level staff forms a significant chunk of the company’s wage bill.
Speaking at the company’s third quarter earnings conference on January 13, Sundararajan said, “We will have our mid-management and senior management staff see the wage hikes in the current quarter, the JFM (January-February-March) quarter. We already projected the impact for that around 50 to 60 bps (on the margins).”
Sundararajan said about 85 percent of the company’s employees will go through the wage hike in the current cycle.
As of Q3, the company had recently started wage hike cycle for the junior level staff in the E0-E2 band which includes employees with up to 10 years of experience. Multiple sources told Moneycontrol earlier that most of them got around 1-4 percent hikes with 1-2 percent being the average, while top performers got 3-4 percent hikes.
This had an 80 bps impact on the Q3 margins of the company, the management said.
HCLTech, however, maintained that the company was giving 7 percent salary hikes on average and 12-15 percent increments to the top performers.
At least two sources had said that the senior level employees didn’t receive any pay hikes for the past two fiscal years, amidst challenging business environment for the IT sector.
Meanwhile, HCLTech has revised its fresher hiring target for financial year 2024-25 to 7,000 from an earlier guidance of 10,000, citing lower attrition rates and improved productivity.
The company said that the initial figure of 10,000 was a directional plan outlined at the start of the fiscal and that hiring numbers are reviewed quarterly.
Sundararajan added that moderated fresher hiring is a reflection of increased efficiency and productivity measures, such as Project Ascend, which delivered a 100-basis-point improvement in margins.
Project Ascend was introduced by the IT major in Q3 to further the company’s operational efficiencies.
HCLTech reported 5.5 percent on-year rise in net profit at Rs 4,591 crore for the quarter ended December 31, 2024, in line with the Street expectations. The IT firm declared interim dividend of Rs 18 per equity share of Rs 2 face value, which includes special dividend of Rs 6 per share to celebrate 25 years of HCLTech’s public listing.
HCL Tech's revenue from operations rose 5 percent to Rs 29,890 crore in Q3 FY25 as against Rs 28,446 crore in Q3FY24.
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