Tata Consultancy Services (TCS) has taken a step by giving its employees a rise in pay, even though it will hurt the operating margin of the company.
The CFO of TCS, Samir Seksaria, said that the annual pay rise, which will start on April 1, will cause the operating margin, which is currently 23.2%, to drop by 200 basis points.
Still, India’s largest exporter of software services is sure that increased efficiency will help make up for this.
In addition to the salary increase, TCS has started the promotion cycle and given raises of between 12% and 15% to the best performers during the most recent annual compensation review.
The company is happy to see that its attrition rate keeps going down, and it expects to get back to its long-term range that leads the industry in the second half of the year.