How TCS got 70% employees back to office by linking variable pay to attendance; others penalised monetarily – Times of India

Tata Consultancy Services (TCS), India’s largest IT services company, has said that 70% of its employees are back in office and the number is increasing every week. Interestingly, the development comes within months of TCS changing its policy to link variable pay to work from the office.
At a press conference post declaration of TCS’ Q1 FY25 results, Milind Lakkad, chief HR officer said that confirmed that employees who did not adhere to the policy of working from the office five days a week were penalized monetarily, although he did not provide specific numbers.
“There are implications for people not coming to office. We do not give out the amounts of what that impact would be. It is something we are doing more from basically bringing in the discipline standpoint and not for any other reasons,” he was quoted as saying.
Lakkad expressed confidence in the situation, stating, “I’m also not worried about that. In fact, people have realised the value of coming to office, some of them have come to office for the first time because they joined TCS during the pandemic. All of that is basically creating positive energy in the system.”
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In April, TCS made changed its variable pay policy. The updated policy considers work from office as a key determinant in calculating variable pay for employees. The policy has been divided into four attendance slabs, each corresponding to a specific percentage of variable pay.
According to an earlier TOI report, employees who spend less than 60% of their time working from the office will not be entitled to any variable pay for that quarter. Those who attend office between 60-75% of the time will receive half of their variable pay. Employees with an office attendance of 75-85% will be eligible for three-quarters of their variable pay. Full variable pay for the quarter will only be given to those who maintain an office compliance level exceeding 85%.
Meanwhile, TCS saw an increase in its net employee count by 5,452 during the first quarter of the fiscal year 2025, following three consecutive quarters of decline. The total headcount reached 606,998 as of June end, up from 601,546 employees at the end of March, according to TCS’s filing on the stock exchanges.
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In the previous fiscal year, FY24, TCS reported an annual drop in its employee base for the first time in 19 years, with a reduction of 13,249 employees compared to the previous year. The company also saw a decline of 1,759 employees in the fourth quarter of FY24, marking the third consecutive quarterly decline in its headcount.
Milind Lakkad expressed his satisfaction with the completion of the annual increment process and the net headcount addition. He attributed the industry-leading retention and strong business performance to the company’s focus on employee engagement and development. The attrition rate further improved to 12.1% from 12.5% in the previous quarter ending March, and Lakkad stated that it is expected to remain in the vicinity in the coming quarter.