Following TCS’s announcement of 100% variable payout for a specific group of employees in the last quarter, HCLTech has stated that it will award variable pay to 85% of its employees for Q4 FY 2022-23.
This is consistent with previous quarters, where the same percentage of HCLTech’s workforce has received variable pay.
Additional compensation
Variable pay refers to a form of compensation granted to employees who have exceeded their regular job duties through exceptional contributions.
It constitutes a component of employee remuneration that is influenced by both company performance and individual employee performance.
The intention of the pay is to elevate employee morale.
CPO addresses staff
According to Ram Sundarajan, the Chief People Officer (CPO), the discussion should begin with the topic of variable pay.
In my opinion, it is a pressing concern for everyone. However, we are not altering our variable pay policies, and this quarter 85% of our staff will be on a variable pay plan.
Furthermore, the CPO explained that variable pay accounts for only 5% of employee compensation, which is a relatively small proportion.
As far as the variable pay policy is concerned, there have been no changes made to the policy.
Net profit, Sales
During the March quarter, HCLTech’s net profit increased by 10.80% YoY to Rs. 3,983 crore, as compared to Rs. 3,593 crore in the corresponding period of the previous year.
HCLTech recorded a YoY net sales increase of 17.70% for the quarter, reaching Rs. 26,060 crore in comparison to the Rs. 22,597 crore sales reported in the corresponding period last year.
New metric
According to HCLTech’s Chief Financial Officer, Prateek Aggarwal, FY’23 concluded with a robust growth of 18.5% in INR and 13.7% in CC, with EBIT at 18.2%.
As of this quarter, we have introduced a new metric for our Software business – Annual Recurring Revenue (ARR).
It is noteworthy that our ARR has exceeded US$ 1 billion and has experienced YoY CC growth of 5.2% (excluding the divested business).
Salary hikes in TCS
Milind Lakkad, the Chief Human Resources Officer of TCS, stated that employees who excel in the company will receive hikes of 12-15% in FY24, while for others, the hike percentages will range from 1.5% to 8%.
He also added that the hikes this year will be comparable to those given in previous years.
TCS is targeting a hike of 12-15% for high performers, while the remaining employees will receive hikes ranging from 1.5% to 8%.
The executive highlighted that this is an improvement over TCS’s past practices.
