Tata Consultancy Services (TCS) has embraced a unique strategy to allow its six lakh plus employees to not only upgrade themselves, internally, but also become eligible for better compensation on the basis of that skill upgradation.
A fair strategy
By offering its internal talent the opportunity to upskill themselves, TCS has identified a fair way to give hikes to the deserving and reduce internal disparity. The high-quality programmes offered inhouse give them employees a chance to enhance their skills and upgrade themselves, so that they become eligible for attractive hikes that may even result in doubling their salaries.
That the programmes are not really a cakewalk is clear from the fact that on evaluation of those who undergo these, only a measly 10 per cent of the candidates are able to clear the same in the very first attempt. So, only the really talent and serious employees are eventually able to make the cut for the extraordinary hikes.
Elevate, is a programme that has more than four lakh employees with 0-12 years of experience participating. Inclusive of soft-skills training, this programme is designed for those with less than three years of experience, and helps them become full-stack professionals. The candidates who are able to clear the programme get their salaries doubled immediately.
Why the strategy works
Amidst the high attrition scenario, giving attractive hikes to only those who really deserve them makes sense. Companies, however, have been trying to attract and retain talent with huge hikes in the range of 80 to 120 per cent. That does not really help to retain employees either, as they always manage to find other employers offering higher compensations or hikes. While this leads to employees switching jobs frequently, it also causes the existing employees to lose job satisfaction as they see newcomers earning better than them.
Therefore, TCS believes in upskilling internal talent, through its fair and high-quality inhouse programmes. By doing so, it manages to hit two birds with the same stone. It ensures that all employees are given an equal opportunity to get their salary or compensation upgraded, and also reduces internal disparity.
Not surprisingly, more and more employees who are keen to enroll in these programmes, across divisions and ranks and experience levels, are getting an opportunity to get their salaries doubled. Those who are unable to score well and clear the evaluation on the first try have the option to attempt again.
These programmes are welcomed at a time when salary disparities have become increasingly common in the IT sector.
Reports suggest that over the last one decade, there has been a surge in the medial annual pay of CEOs, of over about 800 per cent. That means, from just over Rs 3 crore, their salaries have managed to touch more than Rs 30 crores.
Initiatives for freshers and seniors
Freshers have experienced a hike in media salary too, though not as high a percentage — from over about Rs 2 lakh to more than Rs 3.5 lakh (45 per cent hike)
By ensuring 100 per cent quarterly variable pay to its junior employees, TCS has managed to raise the pay of its freshers too.
Annually, the company gives hike of about 12 to 15 per cent, eight per cent, five per cent and then about 1.5 per cent, basis the performance of the employees.
The IT major finds that these programmes are more effective than a uniform change across the lower ranks.
In the Ninja pay category, TCS freshers receive a salary of about Rs 3.36 lakh per annum (LPA), while in the Digital pay category, they receive Rs 7 lakh per annum. In FY2023, more than 44,000 freshers joined TCS.
The candidates with 4-12 years of experience emerge as specialists at the end of the programme, after specialising in technology, cybersecurity, IoT, analytics and artificial intelligence. Employees are even allowed to choose the industry they wish to focus on.
However, the pay hike for these candidates does not take place at one go. They receive a part of the hike at the beginning and the remaining post deployment to the role.
Employees with over 10-20 years of experience are significant to the company as they have made important connections during their long tenure. These are the employees who have made valuable contributions to the company but whose skills have become outdated. They lack relevant market skills. Such employees are given the chance to upskill themselves to become growth and transformational leaders for TCS. They are trained by international business schools through experiential learning.
Ensuring that these seniors are not deprived of market-relevant skills, TCS helps them master the latest technologies, including artificial intelligence (AI), cloud and cybersecurity so that they become more relevant.
About 40,000 employees registered for the programme in 2023 of which about 15 per cent have been certified and deployed in new roles, and the remaining will also be deployed over the next year or so.
That the programmes are a success is evident. Even when attrition has been a major concern for companies in the IT sector, TCS can proudly claim that about 1.25 lakh employees have been with the company for more than a decade old.
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