TCS hands out 8% average salary hike; top performers to get 10%

India's largest software firm Tata Consultancy Services (TCS) has handed out average salary hikes of about 8% for employees in India, after the Mumbai-based company posted a marginal decline in sequential revenue for the fourth quarter and just managed to meet Nasscom's growth forecast for the financial year.

TCS also faced higher levels of attrition in the March quarter and the company attributed the increased attrition to higher level of opportunities across the industry during the quarter. Attrition for the March quarter stood at 14.9%.

"Q4 is a slow quarter and the number of opportunities across the industry was higher. Just like we are hiring, others are also hiring," said TCS's global human resources head Ajoyendra Mukherjee in a post-earnings conference call with analysts.

Mukherjee conceded that the attrition was high and the company would take steps to bring it down.

"We have to bring it down," said Mukherjee. "However, this is not the highest ever attrition in TCS's history. If you look at the 2011-12 financial year, our attrition was higher than 14% all through."

"Attrition is either when markets are hiring, natural attrition or when people reach obsolete. As long as attrition is not at high levels , it is ok. Junior and middle level is at times healthy and nothing to be worried about. There is more buoyancy in the IT markets and will go up further because technology as a sector has picked up," said K Sudarshan , regional managing partner , EMA Partner.

"Traditionally TCS is not the highest salary payer but for seniors have generous stocks and in this case generous bonus for those who have served for long period. This is great gesture in terms of rewarding," he added.

TCS also said it would give its employees a one-time bonus, at a total cost to the company of Rs 2,628 crores, to mark ten years of its listing on the stock exchanges.

However, only about 250,000 of TCS's employees will be eligible for this one-time special bonus — those who have completed at least one year with the company will be eligible for the payout.

This is one of the largest bonuses ever handed out by a listed firm — TCS is not the best paymaster in the sector and therefore this is one way of ensuring they show their appreciation for their employees, said a senior search consultant, who declined to be named.