TCS explains why fresher salaries have remained in ₹3-4 lakh range for years

Despite the weak sentiment at the moment, the IT services sector continues to be one of the top choices for students looking to start their careers. However, a key concern has been low salaries for freshers for many years.

Following the December quarter earnings, in which top tech services giants TCS and Infosys saw their headcount decline, CNBC-TV18 asked the former the reason why fresher salaries have hovered around the ₹3-4 lakh per annum range for years.

TCS’ chief human resources officer (CHRO) Milind Lakkad said, “We are paying based on the talent and we encourage people to come at different cadres.”

He said if freshers or existing employees are willing to upskill, then they can earn double and for some skills salaries go up to ₹10 lakh. “We offer close to ₹10 lakh for innovators. We are hiring people from NITs and IITs where we pay a lot more,” Lakkad said.

When specifically asked what the starting salary is for freshers now, Lakkad said it’s the same as it has been for the past many years. He believes the point is, that once they join, they must understand the path to take. “You take this path, your salary will double.”

TCS CHRO’s comments come a day after the firm’s quarterly results revealed that its headcount has reduced for the second consecutive quarter by 5,680 employees in the October to December 2023 period, taking the total strength to 603,305. The attrition level, meanwhile, has come down to 13.3%.

“When you look at headcount, you should look at the long term. Longer term means we hired a whole bunch of people…very large numbers in FY22 and FY23. And we were leveraging all of this workforce over the past three quarters, and we continue to leverage that,” he said.

He added, “If coupled with disciplined execution if you bring these things together, you will end up with a negative headcount. If you look at our gross hiring in this quarter, it is still a big number.”

Lakkad, however, said he won’t be surprised if the headcount moderates further.

When asked about campus hiring, he said the company is hiring for FY25 and that campuses are buzzing. The company always decides based on the quarterly demand and tunes it based on what is needed at a time. “Campus hiring is a strong element of our business and that continues. Every quarter we are hiring in big numbers.”

He also said that the firm retains the 40,000 fresher hiring target, adding that the firm has onboarded everybody it gave offers to or will onboard this quarter.