Tata Consultancy Services (TCS) is set to grant 1.1 lakh promotions in fiscal year 2025 (FY25), despite deferring its usual annual salary increments. This marks an unprecedented departure from the company’s traditional April cycle for salary hikes, reflecting a strategic decision to reward employee performance through promotions without accompanying pay rises.
Milind Lakkad, Executive Vice President and Chief Human Resources Officer (CHRO) at TCS, confirmed that the company will proceed with these promotions as part of its ongoing commitment to employee growth. Although pay increases will not be issued this year, the focus will be on merit-based advancements, ensuring that top performers are recognised and retained. This decision forms part of TCS’s broader effort to maintain organisational stability and employee morale during uncertain times.
While this move has generated attention, TCS executives have defended the decision, emphasising that it is part of a larger strategy to retain talent and prepare for future business needs. Samir Seksaria, Chief Financial Officer (CFO) at TCS, explained that the company’s tactical interventions for FY25 had an impact of approximately 100 basis points, primarily attributed to promotions and merit-based advancements. However, some analysts have questioned whether the current market conditions justify such employee interventions outside the typical pay review cycle.
Looking ahead, TCS is also focusing on expanding its talent pool. The company plans to hire 42,000 trainees in fiscal year 2026 (FY26), following a similar number of new hires in FY25. This hiring initiative is part of TCS’s strategy to meet growing demand, back-fill positions left vacant due to attrition, and strengthen its workforce with digital expertise. These strategic hiring initiatives are crucial to ensure that TCS remains competitive and agile in an increasingly digital-first world.
Lakkad highlighted that TCS’s focus on digital talent continues to be a priority. Last year, 40% of new hires were for digital roles, a significant increase from 17% in the previous year. This digital-first approach is vital for TCS as it adapts to the evolving IT services landscape and responds to growing client demands for digital transformation. The company is also addressing attrition, which stood at 13% in the past year, ensuring that it has enough talent to meet its business objectives.
As part of its recruitment process, TCS employs its National Qualifier Test (NQT), an integrated test that assesses candidates for entry-level roles across three categories: Prime, Digital, and Ninja. This robust hiring process ensures that TCS attracts the best talent, capable of driving the company’s growth in the digital era.
TCS’s hiring strategy for FY26 aims to strengthen its talent pool, focusing on fresh recruits who will play a critical role in the company’s long-term objectives. With digital transformation at the core of its strategy, these new hires are expected to contribute significantly to TCS’s future growth.
In conclusion, while TCS’s decision to defer pay hikes has sparked debate, the company’s focus on promoting employees and expanding its workforce through targeted hiring underscores its commitment to long-term growth. As TCS continues to navigate the changing business landscape, it is making strategic moves to ensure its continued leadership in the IT services industry.