Tata Consultancy Services gave its employees 120% of their quarterly variable pay for the fourth quarter on the back of improvement in its growth metrics. It also provided single-digit hikes for the current financial year.
Rajesh Gopinathan, CEO of TCS, stated in a post-earnings press conference, “We had a good quarter and we wanted to share the gains with our employees. We have 120% in quarterly variable pay in the fourth quarter, which we have not in while.”
The IT major reported a 4.50% rise in net profit at INR 6,904 crore, bolstered by strong demand for digital services and large contract wins.
The move to increase quarterly variable pay is following in the footsteps of contemporary Infosys which gave out more in variable pay than it had in the previous two years. Infosys also announced 100% variable payout to the employees, which is the highest in the past 10 quarters. It announced an INR 652 Million bonus payout for its employees last week.
Infosys further stated it would implement a salary hike for 85% of its employee base from April 1. Meanwhile, TCS kept its salary hikes similar to what it has in the past. The company’s head of human resources said the average payouts across different geographies ranged from 2%-6%. The salary hike is effective from April 1, 2018.
“We have given low single digit wage hikes in the developed markets and high single-digit hikes in developing markets, with high performers getting increases at the higher end of those bands,” added Gopinathan.
In FY18, TCS also made around 20,000 trainee job offers, which will be realized in the coming year.
Looking at the variable pay hikes made by IT majors so far, it looks to be a favorable earnings season for IT professionals.