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Why TCS Deferred FY25 Salary Hike: Better Hike Ahead?

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TCS had initially announced its annual salary hike during the Q3FY25 results, with increments ranging from 4% to 8%, effective March 2025 and payments starting in April.

Offsite employees were expected to receive hikes of 7-8%, while onsite employees were to see a more modest increase of 2-4%. High-performing employees were to be rewarded with salary increases ranging from 12-15%.

However, in a surprising move, TCS deferred the salary hikes during its Q4FY25 results announcement in April, prompting speculation and raising questions about the reasons for the delay.

TCS CHRO’s Statement

Responding to this during TCS Q4 earnings press conference in Mumbai, Chief Human Resource Officer, Milind Lakkad said that the company would monitor the uncertain business environment closely and decide on the timing of salary increments throughout the year.

While he did not specify the quantum of hikes, he emphasized that the company typically rolls out wage increases in the first half of the upcoming fiscal year, starting in April.

This marks the second time since COVID that such a decision has been made.

Lakkad clarified that he would not label the move as a delay or deferment, but rather a prudent approach in light of the current business challenges, stressing that TCS would assess the situation regularly before taking any action.

Salary Hike Trends in 3 years

SightsIn Plus previously raised concerns about TCS 4-8% salary hike for FY25, the lowest in the past four years. While it aligns with industry trends, it reflects a broader slowdown in salary growth across major IT firms.

This reduced hike is a response to the challenging economic environment and TCS’s cautious approach amidst uncertainty.

The decision mirrors a sector-wide trend of more restrained increments, highlighting the financial challenges within the IT industry and marking a shift from previous years’ higher hikes.

  • FY2021-22: 10.5% average hike (post-pandemic recovery and strong IT demand).
  • FY2022-23: 6-9% (moderation after the post-pandemic surge).
  • FY2023-24: 7-9% hike (IT sector slowdown and global economic concerns).
  • FY2024-25: 4-8% hike (lowest in the last four years).

Wrapping Up…

IT giant’s decision to announce a 4-8% salary hike for FY25 and defer it highlights the company’s cautious approach to compensation amid economic uncertainties.

Here are the key points:

  • TCS’s 4-8% salary hike for FY25 reflects cautiousness due to economic uncertainties.
  • The deferral indicates the company’s focus on assessing market conditions before finalizing increments.
  • There is potential for revising salary hikes upwards and meet employee expectations once the business environment stabilizes.

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SightsIn Plus is an India’s leading high-quality people-focused monthly HR Magazine and provides up-to-date HR News, Leadership Announcements, Best HR Practices and Insights by Global CHROs, CEOs, HR Advisors, Business Managers and HR Heads on topics of interest to HR professionals. To subscribe SightsIn Plus, HR Magazine please visit- https://sightsinplus.com/subscribe/