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<ul><li>Tata Consultancy Services (TCS) has announced a second salary hike for its employees within a span of six months.</li><li>Last year in October, the IT major increased salaries by 6% to 8%.</li><li>This time around the company plant to hike wages by the same amount resulting in a cumulative boost of 12% to 14%.</li></ul>India’s biggest information technology (IT) services company, Tata Consultancy Services (TCS), is set to dole out a second round of increments for its employees within a span of six months. The last salary hike was announced by the IT major in October last year, where the increase in wages was between 6% to 8%. Sources told Business Insider, on the condition of anonymity, that the salary increments will be around the same this time around as well. This means employees will have received a cumulative boost of around 12% to 14%. “We can confirm that we are on track to give increments to all associates across our geographies effective April 2021, in line with our benchmarks,” a TCS spokesperson told Business Insider. This comes after TCS’ attrition rate dropped to a record low of 7.6%, as of 31 December 2020. The company currently has 4,69,261 employees under its wing after adding 15,000 more to its roster between the months of September to December. According to Milind Lakkad, head of human resources at TCS, over 96% of the company’s employees were still working from home before the New Year with only 3.4% in office. Despite the challenges caused by the COVID-19 pandemic, TCS reported its strongest Q3 growth in nine years in 2020. SEE ALSO: <a href="https://www.businessinsider.in/policy/news/indias-supreme-court-looks-into-allegations-of-nearly-four-crore-ration-cards-being-cancelled-because-they-were-not-aadhaar-linked/articleshow/81570339.cms">A Dalit mother lost her ration card and then her child to starvation — her fight for justice has now become a national cause at the Supreme Court</a> <a href="https://www.businessinsider.in/international/news/japan-is-the-only-country-that-does-not-allow-same-sex-marriage-within-the-g7/articleshow/81563467.cms">Japan’s same-sex marriage ban ruled ‘unconstitutional’ as India’s LGBTQ community waits in hope</a> <a href="https://www.businessinsider.in/science/space/news/finnish-photographer-jp-metsavainio-took-over-a-decade-and-1000-hours-of-photography-to-create-this-picture-of-the-milky-way-and-20-million-stars/slidelist/81563516.cms">It took over a decade and 1,000 hours of photography to create this picture of the Milky Way</a>

TCS to dole out a second salary hike within a span six months

<ul><li>The second quarter has always been a historically strong quarter, but Q2 FY24 is expected to be soft.</li><li>The demand picture is still weak and for most sectors, the slowdown has not bottomed out.</li><li>Vendor consolidation has led to a few large deal wins by the Big 3, but conversion to revenues will be slow.</li><li>Margin expansion will also be tough with a stable Rupee and cost levers yet to kick in. </li></ul>Little has changed for the Indian <keyword id="46964" type="General" weightage="20" keywordseo="it-sector" source="Orion">IT sector</keyword> in the last three months. The second quarter earnings are expected to be as muted as the quarter before. IT sector clients are continuing with their budget squeezes, cuts in discretionary spending that’s bringing in less into the companies’ revenue kitty. Top-tier IT companies are expected to see a 0.8% fall in constant currency revenues to a tad over 1% growth on a quarter-on-quarter basis. At the highest end of the most optimistic expectations is a 1.3% growth. On a year-on-year basis too, most see lower single digit growth or a fall – showing that the fear of recession has taken over the market. Most analysts expect <keyword id="6354512" type="General" weightage="20" keywordseo="infosys" source="Orion" topicspecial.url="https://economictimes.indiatimes.com/infosys-ltd/stocks/companyid-10960.cms">Infosys</keyword> to retain its FY24 revenue growth, guidance of 1-3.5%. <keyword id="141968" type="General" weightage="20" keywordseo="hcl-tech" source="Orion" topicspecial.url="https://economictimes.indiatimes.com/hcl-technologies-ltd/stocks/companyid-4291.cms">HCL Tech</keyword> is widely expected to cut its 6-8% growth projections. Most others are expected to veer towards the lower end of the guidance as the first half remains muted. Where is the budget flush? The much awaited budget flush that could have changed the fortunes of the sector is still evasive. “The second quarter of FY24 is likely to be incrementally better than the first quarter. But nowhere close to what most players envisaged at year-beginning. Hopes of finding a bottom in the first half has not materialised, we believe, as project ramp downs/cancellations continue,” says a report by J M Financial. The second quarter has always been a historically strong quarter. And, this theory is all set to change. “Most of the demand indicators are trailing 10-15% below levels at the beginning of the year and only slightly better than the July lows,” said HDFC Securities. Across sectors, budget cuts have played out differently. For the key BFSI sector, spend cuts have bottomed out. The recovery however is gradual and may not be visible before FY25, says HSBC. Telecom sector which was one of the worst affected, along with high-tech and retail, could also bottom out in the second quarter. “We think the spending cuts have been unsustainably aggressive. Hi-tech demand has already started to improve from 2Q. Further, verticals like O&amp;G and manufacturing continue to do well,” says HSBC, which believes that Q2 will see a slight positive growth. It however does not see any major budget flush or V-shaped recovery. Expected change in Constant Currency Revenues (QoQ) <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">J M Financial </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IIFL Securities </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TechM </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.5% </td></tr></tbody><tbody></tbody><tbody></tbody></table>Source: Research reports Big deals, slow conversion Budget squeezes led to consolidation, with IT clients going in for mega deals. All the big three made top deal announcements in Q2. Infosys bagged a EUR1.5 billion deal from Liberty Global, in addition to a $454 million deal from Danske Bank. <keyword id="6357150" type="General" weightage="20" keywordseo="tcs" source="Orion" topicspecial.url="https://economictimes.indiatimes.com/tata-consultancy-services-ltd/stocks/companyid-8345.cms">TCS</keyword> bagged a £800 million deal from Jaguar Land Rover. It also won a NEST € 810 million deal from NEST. HCL Tech also won a $2.1 billion deal from Verizon. “We believe deal flow has steadied after the transition from discretionary spending-powered short-tenured programs to larger programs fueled by cost take-outs, which have longer sales cycles,” said Kotak Institutional Equities. These kinds of deal wins are expected to continue and grow through the financial year, as discretionary spending. “While most IT services firms saw a further moderation in year-on-year revenue growth in the June quarter, deal wins accelerated. Since then, the large and mega deal win momentum has quickened, giving us confidence in strong growth for FY25,” said BNP Paribas. Large deals, however, are spread across five years, and tend to convert slowly into revenues. “Barring re-badging deals, ramp-up and hence revenue conversion of mega deals tend to be long drawn,” says J M Financial. The most watched metric for the IT sector this season would be Total Contract Value-to-revenue conversion pace. The others would be the extent of compression in the existing book of business, and greater-than-normal furloughs, says a report by Nirmal Bang. Rupee, salaries &amp; margins One advantage of a soft macroeconomic environment is Rupee depreciation that adds to the margins of IT companies. Rupee depreciated only by 1% on a quarter-on-quarter basis, adding little to the sectoral margins. “This slowdown is different. Indian Rupee is relatively stable and Covid-19-led cost rationalisation is still unwinding like travel costs and onshore mix,” says HSBC Global Research. Margin management is also expected to be tough going forward as the operating environment has turned hard. Unplanned benching due to sudden ramp-downs, shift in revenue mix towards cost-takeout deals and lower growth will add to the pain on the profitability end. Kotak also expects a marginal decline in the EBIT margin on year-on-year comparison, except TechM where the decline will be sharp. Increase in costs such as travel and back-to-office expenses will hurt. “Cost levers are yet to fully kick in,” the research firm adds. On the other hand, net hiring has been all but flat for most IT sector companies. Moreso, Infosys, HCL Tech and <keyword id="10862" type="General" weightage="20" keywordseo="wipro" source="Orion" topicspecial.url="https://economictimes.indiatimes.com/wipro-ltd/stocks/companyid-12799.cms">Wipro</keyword> have all delayed wage hikes which can help, along with other cost rationalization programmes. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div>

Earnings preview: Q2 to be another washout quarter for IT sector, market to focus on execution

<keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword>, which is India's second-largest software exporter after Tata Consultancy Services, has found a way to make its employees even happier. It has started handing out special bonuses and incentives to top-performing employees and sales executives, on top of their regular salaries and incentives. 
 
The company also plans to hire about 20,000 engineering graduates from campuses in the next financial year, a number roughly similar to the campus offers that were made this year, as per a top company executive. 
 "What we are trying to experiment with is — we have a regular compensation structure which is base plus bonus. And bonus component depends on how the company and individual has performed. So, that structure will continue — in addition, every quarter based on what we think is imperative, we're experimenting (with something new) and this changes every quarter. So suppose, this quarter there is an important metric, we are announcing a (separate) incentive," said <keyword id="645752" type="UNKNOWN" weightage="100" keywordseo="UB-Pravin-Rao">UB Pravin Rao</keyword>, who is the Chief Operating Officer of Infosys. 
 
Rao also said that this special incentive structure has been put in place so that the company can meet its short-term quarterly targets in an even effective manner. For example, in this quarter, Infosys is incentivising its sales organisation on how well they manage to sell the company's newly-launched Aikido line of services. 
 
"We're saying, if you meet X million of revenue, then we'll clear this kitty and over and above the net, we'll give them this much. So those are incremental bonuses or incentive schemes that we've come up with, just to make sure that there is more alignment to some of the short-term things we're trying to do, in addition to regular bonuses which is based on overall performance," Rao told ET. 
 
"This half, the focus is more on selling our new Aikido services. So, we're trying to incentivise people on that. So whoever does X million of revenue, over the next 6 months, there is a separate kitty that is given out to them," he added. 
 
In other news, Infosys is in early internal discussions so that it can potentially revamp its current startup incubator program and launch an accelerator-like program within the company. This program would be exclusively for startups, as confirmed by two people with direct knowledge of the matter, on conditions of anonymity. 
 
Rao, however, insisted that these talks were at a "very early stage" and the company is yet to take a final call on the shape and form that it will finally resume. 
 
<a href="http://poetsandquants.com/wp-content/uploads/2014/02/10379313-54b8-4448-b3fa-367be8ac368bInfosys.jpg">Image source</a>

Infosys readying Diwali gift for its employees and it's
special this time!

Citing poor increments and slow career growth, <keyword id="403932" type="UNKNOWN" weightage="20" keywordseo="Indian-IT-professionals">Indian IT professionals</keyword> want the government to ease the resignation process, which as of now demands a notice period of three months. 
 Over 28,000 professionals have signed an <keyword id="744065" type="UNKNOWN" weightage="20" keywordseo="online-petition">online petition</keyword>, in which they have asked the labour ministry to reconsider this clause. 
 
Also read: <a href="http://www.businessinsider.in/EY-PwC-KPMG-and-Deloitte-are-making-exit-tough-for-employees/articleshow/48066226.cms">EY, PwC, KPMG and Deloitte are making exit tough for employees</a> 
 
"It is unrealistic for anyone to plan that far ahead for their future actions and resign in advance not knowing state of the issue in next three months," says the petition. 
 
Major Indian IT companies like <a href="http://www.businessinsider.in/TCSto-increase-notice-period-to-three-months-from-March/articleshow/51068032.cms">TCS</a>, <a href="http://www.businessinsider.in/for-the-first-time-in-history-hiring-drops-in-infosys/articleshow/57131244.cms">Infosys</a>, Tech <keyword id="45224" type="CITY" weightage="20" keywordseo="Mahindra">Mahindra</keyword>, <keyword id="30331" type="CITY" weightage="20" keywordseo="HCL-Technologies">HCL Technologies</keyword>, Capgemini, Accenture and IBM have a non-negotiable three-month notice period clause. 
 
Also read: <a href="http://www.businessinsider.in/Eight-Things-To-Do-During-Your-Notice-Period/articleshow/35950613.cms">Eight Things To Do During Your Notice Period</a> 
 
"The IT companies try to stop employees for three months, but the next company is not ready to wait for three months. So mostly people go jobless for a couple of months and then look for a new post," an IT professional told <a href="http://economictimes.indiatimes.com/industry/tech/ites/angry-with-poor-pay-hike-and-lack-of-growth-indian-techies-push-government-to-make-resigning-easier/articleshow/57419754.cms">ET</a>, requesting anonymity. 
 
The reasons these professionals cite re believable, given that they are expected to receive low single-digit increments for the next financial year. 
 
Tech Mahindra, for example, has <a href="http://www.businessinsider.in/tech-mahindra-is-not-giving-appraisals-to-its-senior-employees-heres-why/articleshow/56998339.cms">suspended the salary revision</a> process for employees who hold more than six years of experience unless management approves so. 
 
Experts from the Human Resource sector feel that the IT companies use these three-month notice periods to tackle high attrition rates, avoiding employees to switch owing to marginal hikes offered by other companies. 
 
Other than this, they also make use of these notice periods to find replacements, particularly to replace highly skilled employees. 
 
(Image source The Huffington Post)

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TCS to dole out a second salary hike within a span six months

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Poor pay hikes and slow career growth force Indian techies to demand easier resignation

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