TCS To Review Salary Hikes By Month-End

NEW DELHI: The country's largest software vendor Tata Consultancy Services (TCS) on Tuesday said it will review salary increment plans by this

month-end as signs of revival of demand in the sector get stronger by the day.

"There has been no hike in the current fiscal. The demand-supply situation, however, has improved over last year. We review it (wage hikes) along with the business plan for the year, which will be happening somewhere by end of February or in March," TCS Chief Financial Officer S Mahalingam told reporters on the sidelines of a CSI event here.

Indian IT sector was hit last year by the economic slowdown with companies world wide cutting their technology spends. This in turn, had led to many companies cutting jobs, freezing fresh hiring and no wage hikes.

Earlier this month, TCS announced that it would hire 30,000 people next fiscal, signalling that buoyancy was back.

Talking about expectations from the upcoming budget, Mahalingam said the industry, as a whole, wanted the extension of the tax holidays that are provided to IT firms under Sec 10A/10B of the Software Technology Parks (STP) Act.

He also asked the government to clear the ambiguities in various policies related to direct tax code and SEZs.

Happy Times are Here Again – Indian Companies Set to Announce Pay Hikes

by sweta

After more than a year of money crunch, job loss and pay cuts; employees all over India have something to cheer about. As the corporates start recovering after the dreadful economy slowdown, the companies are gearing to reward their employees with bonus and pay hikes.

According to the latest report by Economic Times, employees across corporate India can expect a salary hike anywhere between 9 to 18 percent this year.

As per current trends, employees across sectors may get moderate to fat increments and salary hikes in the 9-18 percent range this year around. Pay-cuts, layoffs and heightened austerity measures are becoming a thing of the past, as it gets replaced with a buzz of promising bonuses.

The salary hike is expected in most companies belonging to telecom, retail, FMCG, automobiles and consumer durables sector. Last year a majority of companies had to bring down their head count. While many had resorted to a pay cut across the organisation, some had fired people in bulk.

Sandeep Chaudhary from Hewitt Associates was quoted as

“If we take a realistic look on expected salary hikes this year, it is surely going to be around 9-9.5 percent across sectors.”

He added, “Companies will focus on a more realistic approach towards salaries, as well as hiring.”

Where auto and mobile sector have been profitable and quite generous with their employees. While Maruti Suzuki is looking at a hike of 10-15 percent and an average bonus of about 100 percent this year, mobile giant Airtel is had offred an average bonus of 140-150 for junior level employees and 125 percent for senior level last year.

IT companies who have always been the highest paying sector have also decided on a good hike for its employees this year. Cognizant,SAP, VMware, Mahindra Satyam, TCS, Wipro, Infosys and Genpact are said to offer an increment of 7-15 percent at the operational level and 12-18 percent to the seniors. Wipro was among the first one to announce a hike of about 8-12 percent. At Stayam, employees can expect a hike anywhere between 8 to 20 percent and Infosys is looking at a salary hike in april even after a hike of 8% last year in October.

The job market which has been very slow for some time now has also started showing good signs lately. How do I know?

Haven’t you noticed the Naukri.com ad back on Television?

Wipro To Give Salary Hike

NEW DELHI: India's third largest software exporter Wipro said it would hike salaries across the board this quarter, but did not indicate quantum.

According to Pratik Kumar, corporate vice president, human resources, the salary hike will be given out in February. He added, “The hike will be according to the industry standards.”

Wipro beat estimates with a 19 percent rise in December quarter profit and projected growth as a global economic recovery boosts demand for outsourcing services and eases pressure on fees.

New York-listed Wipro expects its IT services revenue to rise 3.6-5.4 percent in January-March from the preceding quarter to $1.16-$1.18 billion, after it posted a 4.9 percent sequential rise in the latest quarter.

The company also announced that it will hire people from campuses. Some 7,500 people hired previously are expected to join in Q4 and early next quarter.

Last week Tata Consultancy Services also announced that it expects to increase wages in the 2011 financial year.

TCS global head of HR Ajoy Mukherjee said the company has decided to give salary increments during financial year ending March 2011, although the exact quantum of hike is yet to be decided.

“There definitely will be a wage hike but the quantum is not finalised. We are considering three options,” Mukherjee said. While giving the hikes, the company will maintain the salary structure it moved to in FY10, which consists of a quarterly variable component and an annual variable component.

However, the company so far has no plans to increase the salaries of junior recruits.

Cognizant staff to get promotions, higher bonus

Measures based on company performance, client plans, talent needs.

K. Bharat Kumar

Chennai, Jan. 18

Employees of Cognizant Technology Solutions have a lot to cheer for now.

An e-mail from the company's Chief Financial Officer, Mr Gordon Coburn, and the Chief People Officer, Mr Shankar Srinivasan, has assured them, this year, of ‘significantly higher levels of bonus,' ‘accelerated promotion and pay-revision cycles' and, the taking care of ‘2006 and prior campus batches' currently with the company.

The e-mail, a copy of which is with Business Line, says it has arrived at these measures “based on a careful assessment of the performance of Cognizant, input from our clients in terms of their plans and our review of the talent market in various geographies around the globe.” Typically for large industry players, if confidence stems from “clients' plans”, then a better year ahead is expected. Given Infosys' and TCS' upbeat performance for the December 2009 quarter, with the former saying that the ‘worst is behind us', Cognizant too could be seeing greener pastures ahead.

The e-mail touches upon the company's ‘associate reward and recognition plans for 2010' across four fronts.

Bonus

The bonus payouts for the year 2009 are planned for distribution in March this year at levels ‘significantly above recent years'.

While details are not available as to how much was paid out last year, industry watchers say that across the industry, bonus payouts could, in good times, exceed 100 per cent. (For instance, if your salary is Rs 100 and the variable component of your salary is Rs 30, then your variable pay could be anywhere between Rs 0 in a bad year to Rs 30 in a good year. In boom time, variable pay has exceeded 150 per cent in some companies in the industry.)

Promotion

This year, Cognizant aims to give promotions effective across May and July.

Typically this used to be effective July. For employees currently at designation below Manager, Cognizant would announce promotions in late April, effective May 1. It would also conduct an additional promotion round for this group in late 2010. For Managers and above, it would announce promotions in June, effective July 1. Interestingly, the e-mail says, “We expect to promote a substantially larger number of people than last year.”

Compensation

The company has also committed to an accelerated company-wide pay revision cycle that would become effective at the same time as promotion cycles in May and July.

For now, no further details are available and the e-mail only says, “We will conduct market analyses to determine the scale of the revisions, taking into account overall market conditions, our revenue plans, and our clients' spending patterns.”

The company also has a word for those who joined it in 2006 and prior batches, currently at Programmer (P) and Programmer Analyst (PA) levels.

For programmers

It recognises that, “given the global economic turmoil and our slower growth over the past few years… many in this group were disproportionally impacted.”

Hence Cognizant is planning a separate, off-cycle salary increment process for the India-based portion of this population with an effective date of January 1, 2010. This initiative will occur in February once the 2009 performance ratings are finalised, it says. “In addition, a substantial number of P and PA promotions will be announced in April and will be made effective May 1 {+t},” the e-mail says.

TCS, Wipro, Infosys, loosen purse strings to retain staff

BANGALORE: Nitin M, a techie in his 30s in IT capital Bangalore, still feels a chill run down his spine as he recalls the roller coaster ride his professional life took during the economic slowdown last year. In the pre-slowdown days, he belonged to the country’s most pampered workforce, when jobs were easy to come by and perks were splashed. The storm came soon enough. The smiles thinned out, and the number of colleagues he shared his expansive office space with too began to diminish. Sodexo coupons were cut, easy rides in private taxi cabs were replaced with journeys in crowded company buses. And salary hikes were a thing of the past. As a new decade unfolds, the wheel has come full circle. Nitin, who has recently landed a job with another IT company, said his previous employers had slashed increments during the recession. “Now, the company is giving a 40% hike to hire former employees back.”

Salary hikes in the offing IT employees and HR experts expect many companies such as Target, Cognizant, SAP, VMware, Mahindra Satyam, TCS, Wipro, Infosys, Genpact, Oracle, MindTree and Accenture to offer a pay hike of 7-15% at the operational level and 12-18% at senior levels. Abhinav Krishnan, an employee at VMware, the largest maker of software that lets computers run different operating systems, recently received a salary hike. This came as a big relief to him as he is his family’s sole breadwinner. “The company I worked with previously did not give me any hike. So I moved out, and my salary has now doubled,” says this 26-year-old employee, who was earlier with one of the world’s largest technology companies. Similarly smiles are back on the face of the 27-year-old techie working at advisory services firm Ernst & Young. He had planned to buy a car and a bigger house last year, but these dreams wilted away in the economic slowdown. “This year, I am planning to buy both. The company has announced a salary hike and a bonus of 7-10%. I am now in a better position to get a loan,” he said.

Attrition levels up
The improving market sentiments have also resulted in a rise in attrition levels, as companies have started to pay premium packages to hire skilled hands from other companies. An Infosys employee said attrition levels have gone up and most employees were going to rival firms like Tata Consultancy Services and Wipro, which are offering a 40% hike in salaries. “We are expecting a salary hike of 8% this April,” he said. He said that during the tough times, they had to put in six hours of work, which was considered a full day. “Now, spending 3.5 hours is considered to be a full day,” he said. Due to the economic meltdown, issues related to the work environment, employee benefits and innovative programmes were put on the backburner. Companies were not too transparent in informing their employees about key decisions taken in the organisation. Many employees said that some companies are exploiting the situation in the name of recession. Ajit Sivaraman, a 26-year-old techie, shifted to Tesco — one of Britain’s largest retail groups — to do the IT-related work there. The company offered him a 60-70% pay hike. He is now planning to buy his own home with an investment of around Rs 20-25 lakh. “I used to earn between Rs 1 lakh and Rs 3 lakh. Now I get Rs 3-5 lakh in the new job,” he said. He said his previous organisation even changed the cab facility to bus service for morning shift employees and offered staffers Rs 75 per day, if anyone wanted to come on their own. “It costs me Rs 200 per day to commute. They even cut our Sodexo meal card,” he said.

Talent reward programme
A Satyam professional said salary hikes were based on a model called ‘Smart’, with employees coming under the so-called ‘S-band’ receiving a salary hike of 20%, while those under the T-band received an 8% salary hike. He was expecting hike of 15% in April and plans to buy some property. “kI was earlier looking to move out as there was a lot of uncertainty and attrition levels were high. I don’t have plans to move out now,” he said. C Mahalingam, executive vice-president and chief people officer at offshore product firm Symphony Services, said his company was giving a salary hike of 7-8% to their employees and 8-9% hike to its top talent. “Companies are now hosting lunches and dinners at five-star hotels for their top talent. But the fun-and-frolic approach to keep employees happy may not come back in the near future,” he said. Mid-sized software and R&D services firm MindTree said it is focusing on a good communication network and is keeping employees informed about every development. “Employees do not expect free lunches and gifts. But they want to be treated as professionals, and their seniors to be more approachable,” says MindTree chief HR Puneet Jetli. IT services firm MphasiS has announced a recompense bonus for its staff which the company feels is possibly an innovative compensation model as it is based on the company’s performance and employee’s individual performance. “We have given a recompense bonus of 25% for the highest performer. For good performers, the bonus can be 15-25% higher than the average pay hike,” MphasiS chief human resources officer Elango R said.

According to Ajit Isaac, MD & CEO of IKYA Human Capital Solutions, many companies are planning a 12-18% fixed salary hike for senior employees and 5-15% salary hike for employees at the operations level. But captive centres, which were earlier paying lucrative salaries, won’t be able to keep the pace. “This is because outsourcing margins and billing rates are under pressure as a major chunk of outsourcing contracts are going to third party vendors,” he said. An IT employee at Keane, a technology services company, said she has received a salary hike of 10-12%. “Last year, there were lot of structural changes to combat the recession,” she said. The New Year has certainly brought some smiles back.

TCS to step up hiring as info-tech spending takes off

As demand picks up, pricing power will return. TCS has been winning deals.

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— Mr N. Chandrasekaran, CEO of TCS

Adith Charlie

Mumbai, Dec. 30

In what could be a firm indicator of turnaround times for the IT industry, the CEO of India's largest IT services company said fiscal 2010-11 is likely to see his company step up the pace of hiring, give wage hikes, as well as increase capital expenditure.

“We are likely to hire more people next year ( vis-à-vis the current fiscal) and we have also increased the quantum of work done offshore. This means we have to create more facilities going forward,” Mr N Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services, said in an interview to Business Line.

Next year's capex for the $6-billion company is likely to be higher than the Rs 1,300 crore earmarked for the current year, a figure disclosed by the group chairman, Mr Ratan Tata, at the company's annual general meeting last year.

However, Mr Chandrasekaran would not provide concrete numbers as the company is still in the process of firming up its plans for the next fiscal, ahead of its third quarterly results that are to be announced on January 15.

This revival in IT spend is propelling TCS to firm up hiring plans for next year and it is being led by companies in the banking, financial services space across geographies.

Positive indicators

Though companies in sectors such as manufacturing, hi-tech, telecom and manufacturing are still ‘not out of the woods', there are enough indications of things revving up next year, said Mr. Chandrasekaran. “I believe that during the course of the year these sectors will turn positive and deliver growth. The good news is the decline (in these sectors) has stopped,” he said.

TCS expects 2010 to be a better year for the company and the IT industry as a whole. And the growth is largely going to be volume-driven.

“Short term, there may not be a pricing uptake; but I do not expect a (pricing) decline either. As demand picks up, pricing power will return,” said Mr Chandrasekaran.

The good news is that discretionary or optional technology spending among corporations also seems to be making a comeback, especially in the BFSI (banking, financial services and insurance) space. TCS Bancs (its financial products suite), which is “positioned against discretionary budgets”, has been winning deals across geographies, securing engagements even in geographies such as continental Europe that are yet to see an uptake, he said.

Better clarity

“Fundamentally, there is lot more clarity and there is a systematic way of approaching business from the customers' end vis-à-vis last year. We just hope that Europe as a geography also starts showing signs of recovery,” he said.

Starting January, TCS will approach campuses for recruitment for 2010-11. It may be noted that for the current fiscal the company has already given 24,888 offer letters for campus recruits, a good percentage of whom are expected to join, in a staggered manner through the fiscal.

Earlier, TCS had indicated that it had nearly frozen lateral hiring for the current fiscal. That too seems to be changing and the company has increased the pace of hiring laterals or experienced professionals.

TCS, which had clamped down on salary hikes this year, is likely to be more lenient next year. The company is internally huddled in discussions to see how much wage hikes can be implemented next year, said Mr Chandrasekaran.

For the quarter ended September 2009, TCS had reported a 29 per cent rise in net profit at Rs 1,642 crore against Rs 1,271 crore in the corresponding year ago period

250,000 IT jobs up for grabs soon: Infy director

With the global economy gradually bouncing back, the IT job market is also picking up and around 2-2.5-lakh jobs in the sector are likely to be up for grabs, a top Infosys [ Get Quote ] official said on Wednesday.

"The job scenario is improving...this year the market is likely to see around 2-2.5-lakh jobs," Infosys director-human resources Mohandas Pai told reporters.

The IT jobs market will, however, not be the same as it was two years ago but will also not be as bad as it was last year, Pai said, adding the fresher-lateral hiring ratio is likely to be around 65:35 per cent this year.

Two years ago there were around 3-4 lakh jobs available in the IT market, he pointed out. The industry has witnessed a lower growth rate in the last 18-months, Pai said, adding that the market is not so open now.

Infosys has plans to hire around 20,000, Pai said, adding that, however, campus recruitments will be lower this year as compared to the last.

"This year, Infosys will be hiring around 20,000 as against 16,000 that we recruited last year. Campus recruitments, however, will be less," Pai said. However, did not divulge the exact number that he is planning to hire through campus recruitments.

Pai said that Infosys has given a 7-8 per cent hike across the board whereas globally it was two per cent. Attrition stood at 10 per cent at Infosys, he said.