TCS has rolled out 100% variable pay for 70% of the employee base for the third quarter ended on December 31.
Payout despite tough environment
It will give full variable pay to all junior-level employees.
This is despite a challenging business environment, where TCS had fewer deal wins.
However, it still managed to exceed expectations on the revenue front.
Variable pay for junior level employees
CHRO Milind Lakkad, in an email to employees wrote, “A decision has been taken to pay 100% of the quarterly variable pay (QVA) to all employees up to C2 or equivalent grades covered under this plan. “
These include trainees and IT analysts.
Variable pay for mid and senior employees
For mid and senior-level employees, the individual variable payout is based on business unit performance and the amount could even exceed 100 per cent.
“The individual payout for C3A or equivalent grades and above may vary depending on the business unit performance,” the mail read.
Designations C3 and above are senior employees at TCS, with positions ranging from assistant consultants to associate consultants.
QVA is based on company performance and in the case of mid and senior employees the performance of the business unit is also a factor, said Samir Seksaria, CFO.
Loss of 2000+ employees
During Q3 post earnings briefing, he had stated that the company expects to close the financial year at 25% operating margin (up 50 basis points from Q3). “.
During the third quarter, the company reported a loss of 2,197 employees on a sequential basis due to macroeconomic challenges the IT sector is facing.
The headcount stood at 613,974 for the quarter-ended December.
Lowest net new addition
Notably in the second quarter, the employee addition came in at 9,840 in July—September period.
This is its lowest net new addition in the last nine quarters.
Lakkad said that the firm “made a significant hiring of fresh talent last year as well as the first half of this year”.
HR Officer weighs in
It made significant investment in talent development to make them productive which is now paying off.
“All of this resulted in negative headcount but it does not indicate anything about the demand. Demand is high and we are just operating it efficiently,” he said in response to the question on headcount fall.
CEO’s words
When asked about the headcount reduction, CEO Rajesh Gopinathan said that the company invested in capacity building in 2021 to “bypass the industry’s hire-from-each-other attrition cycle.”
He said that the company “focused on hiring at the entry level and invested in training and cross-training our resources.”
“Overall, we are very comfortable with where we are with our net headcount,” he added..
