Tata Consultancy Services' (TCS) decision to link employees' variable pay to attendance is aimed at fostering a return-to-office culture rather than punishing staff, according to Chief HR Officer Milind Lakkad.
Lakkad said that the move is aimed at instilling 'the TCS way of doing things,' and the company has been putting out positive messaging to ensure that.
TCS has been in the eye of the storm recently for linking its quarterly variable pay with attendance. Anyone with less than 60 percent attendance won’t be eligible for the quarterly bonus. And consistent non-compliance of this could lead to disciplinary actions being taken.
During the company’s Q1 earnings conference on July 11, Lakkad said that nearly 70 percent of the employees are already working from offices.
“It is about understanding what it means to be with the teams. It is about what it means to be learning from each other, having fun at work, and building relationships at work,” he told Moneycontrol in an interview.
Lakkad said that this step was taken as the last measure for employees who have “not yet understood the value of coming to work.” TCS had earlier shared that nearly 40 percent of its current workforce had joined during the Covid pandemic years, and have not been to the company’s offices before.
This could, however, be a temporary measure. Lakkad said, “We have come to a point where with just 70% plus number I'm very happy. The point of whether we continue for one quarter, two quarters, three quarters or for the year is something we'll decide. This is not something that we want to do to punish people. This is the last measure we have taken now. The last measure we have taken to basically make sure that people who do not understand or have not yet understood the value of coming to work, they do understand.”
“Whatever variable pay is taken out is fed back to the people who are coming in. It is not that the company is using that money in any other way, but it is going back to the people,” he added.
Lakkad believes the company is close to achieving its target numbers for return-to-office after taking into consideration that many people have to travel all the time and a lot of them opt for leave without pay as well for various reasons.
No on-boarding backlog left
TCS onboarded around 11,000 trainees in the first quarter ending June 30, 2024, and plans to add a total of 40,000 freshers in FY25.
Last year, TCS faced criticism for delaying the onboarding of both laterals and fresh hires by hundreds.
Providing an update on this, Lakkad said the company has cleared all the backlog from previous years.
“We obviously make sure that the backlog is cleared first. Then there will be certain digital skills coming in where we might want to on-board early, but primarily, backlog first. So, we do not have any backlog of passing 2023. We have cleared it now. And going forward, basically, it's all coming through the pipeline,” he said.
“When a trainee joins, it takes a good 12 to 15 weeks for them to work. So, that pipeline is going on right now. And we have to plan well in advance to be able to provide people who are productive for the business... It's not a quarterly thing; it's a yearly thing. And campus hiring is definitely something that is planned yearly. Hiring from the market is something that happens tactically based on the business needs,” Lakkad added.
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