India’s largest IT services company, Tata Consultancy Services (TCS), is set to roll out annual salary increases for the fiscal year 2025 (FY25) in March, with payouts starting in April.
The hikes are expected to average between 4-8%, according to sources familiar with the matter.
The average hike was 7-9% in FY24 and 10.5% in FY22.
The company’s former CEO, N Chandrasekaran, who was at the helm from 2009 to 2017, oversaw some of the key growth years for the outsourcing sector.
Rajesh Gopinathan took over from him until the end of May 2023, and K Krithivasan has been in charge since then.
TCS Salary Hike Details: Variable Pay and Performance
The average hike for FY24 was 7-9%, and 10.5% in FY22.
The recent slowdown in the IT industry has led to a gradual decline in annual increments.
During COVID-19, increments were in double digits, but over the past couple of years, they have reduced to single digits.
The hikes will be linked to employees’ compliance with TCS’s recent return-to-office (RTO) mandate announced early in 2024.
The latest hikes follow the quarterly variable pay (QVP) released in February for the October-December period.
Senior-level employees continue to receive lower payouts, ranging from 20% to 40%.
Around 70% of employees at TCS received 100% of the variable pay. This primarily included those belonging to the C3 and below bands.
Employee Reactions, Business Verticals and Performance
Employees have expressed mixed feelings about the hikes.
While some appreciate the increase, others feel that the hikes have been meager over the past few years.
One employee mentioned, “The hikes have been meager each year for the past at least three-five years. It has been on the decline since the exit of former CEO N Chandrasekaran.”
The business verticals that have performed well typically receive higher hikes, but overall increments have not been too good.
The grade structure at TCS starts at Y, which is for trainees, and moves up to C1 for systems engineers. From there, it progresses to C2, C3 – A&B, C4, C5, and finally, CXOs.
Employees in the C3B and above band likely fall in the senior category.
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