India’s largest IT services firm, Tata Consultancy Services (TCS) clarified that it has not delayed payments of variable pay to its employees for Q1.
The company further clarified that it is normal to give it in the first or second month and said, “All our compensation and bonus cycles are as per plan.”
The email sent by TCS to employees read, “The performance bonus for Q1FY23 is yet to be finalized for C3A, C3B, C4, and equivalent grades. This will be paid along with August 2022 payroll to eligible associates.”
In a statement, TCS said, “We have come across completely incorrect reports on our compensation. Variable pay is either paid in month one or month 2 as per the normal process and there is no delay in this process. 100% VA is being paid for Q1.”
According to earlier reports, referring to an internal email by the company, “The compensation which was supposed to be paid in July is now likely to be paid by August 2022 end.”
India’s second-largest IT services company Infosys has scaled back the average variable payout of employees to about 70 percent for the June quarter amid margin squeeze and high employee costs.
Last month, Infosys reported a lower-than-estimated 3.2 per cent rise in June’s quarterly net profit amid escalating costs. However, the company raised its full-year revenue growth outlook to 14-16 per cent citing strong demand and a robust deal pipeline.
The company maintained the margin guidance at 21-23 per cent but made it clear that with the increase in cost environment, it will be at the lower end of the margin outlook. Infosys’ operating margins were at about 20 per cent in Q1 FY23.
Higher employee benefit expenses, sub-contracting costs, and travel expenses had pushed up overall costs for the Bengaluru-headquartered firm in the June quarter.
Recently, Bengaluru-based, Wipro also held back the variable pay of some employees while trimming the percentage of the compensation for freshers.
Wipro will not be giving variable pay to those in Band C and above (people at the mid-manager level and above), while junior employees will receive 70 percent of their variable payout.
While Wipro did not comment on the quantum of variable payout, the company said in a statement that as per its plan, salary hikes will be rolled out from September 1 and it has completed the first cycle of its quarterly promotional cycle from July.
TCS has added 14,136 employees in the April to June quarter with a total workforce of 6,06,331 employees globally and women account for 35.5 percent of the TCS workforce, the company said in a statement.
Software giant kicking off the corporate earnings season — said its attrition rate further rose to 19.7 percent in the April to June quarter of the 2022-2023 financial year. In the previous quarter, TCS saw an attrition rate of 17.4 percent.
Milind Lakkad, Chief HR Officer, said, following the annual compensation review, TCS employees received salary increases of 5 to 8 percent with top performers getting even bigger hikes.
“Our empowering, performance-driven work culture is helping us attract local talent across all our key markets. Continued hiring momentum resulted in a milestone quarter, with the employee strength crossing the 600,000 mark,” he added.
