Salary hikes to slow at TCS next year

Salary hikes to slow at TCS next year
Comment E-mail Print Share
First Published: Wed, Oct 17 2007. 01 56 AM IST

S. Padmanabhan, head of HR for TCS
S. Padmanabhan, head of HR for TCS
Updated: Wed, Oct 17 2007. 01 56 AM IST
Mumbai: India’s largest software and services exporter Tata Consultancy Services Ltd, or TCS, on Tuesday said its wage hikes next year would be lower than this year’s salary increase averaging between 12% and 15% for employees in India.
The firm, India’s largest private sector employer, has more than 100,000 employees as of 30 September.
S. Padmanabhan, head of HR for TCS
TCS declined to quantify next year’s wage increase. This decision to slow down wage increases will also impact the salary of fresh recruits from university campuses. Wage increases dented TCS’ Ebitda margins by 1.17 percentage points in the July-September quarter. Ebitda, short for earnings before interest, tax, depreciation and amortization, is a measure of the profitability of core operations of most businesses.
“Wage increase is linked with talent availability pool,” said S. Padmanabhan, executive director, human resources at TCS. “Every company has done different things to expand the pool.”
TCS has expanded the student pool it hires from in the last two years by recruiting science graduates in addition to the fresh engineers, who are traditionally recruited by information technology companies. There are 500 such science graduates already working on projects of TCS and 2,000 more are expected to join the company this fiscal year.
“The demand supply ratio is stabilising ,” he added. “Wages will definitely stabilise across the industry.”
TCS has a training centre for science graduates at Chennai, where it plans to increase capacity to be able to train 3,000 at a time. Besides, it plans to open four more centres at Assam, Chandigarh, Gandhinagar and Bhubaneswar to have an additional capacity of up to 5,000 at an investment of Rs400 crore.
“Scaling up to 30,000 at 10 centres is not a problem for us,” said S. Ramadorai, chief executive officer and managing director, TCS.
TCS, which reported Rs5,640 crore in revenues in the September quarter, spends 2% of its revenue on employee training.
It plans to recruit 9,000 employees in the current quarter and said it will meet its annual target of hiring 35,000 people this financial year. It has also made job offers to 22,000 students at 265 colleges and universities in India expected to graduate next year.
Comment E-mail Print Share
First Published: Wed, Oct 17 2007. 01 56 AM IST