The Hindu Business Line : Salary cut: HR fraternity unperturbed

Bangalore, Feb. 6 Even while a 1.5 per cent salary cut for TCS employees is giving the country’s tech workforce sleepless nights, the IT-HR fraternity here is reassuring that “it is not unduly worried over the IT giant’s announcement last week.”

“Employees understand that there are upsides and downsides to business and there is no unnecessary anxiety over it,” says Mr Pratik Kumar, Executive Vice-President, HR, Wipro Ltd.

The company has been a pioneer in introducing the variable pay concept in 1997 and it has worked well for the company, he says.

Maturity level

Mr Gautam Sinha, CEO, TVA Infotech (an IT recruitment firm,) terms it “a reaction in an extreme fashion” to the sub-prime crisis and the expected US recession.

He attributes the TCS pay cut or a slow rate in wage hikes to the industry reaching a higher level of maturity.

An industry that saw “unbridled salary hike rates” needs some tempering, he reasons out and this is a sure sign of that happening.

But definitely not a dead end because for the companies, the order books are still active and for employees, opportunities are still knocking, both in terms of type of work and the geographies covered.

It’s not so much the salary cut that has disturbed the industry as much as the manner in which it was done, says Mr Puneet Jetli, Vice-President and Head, People Function, MindTree Consulting.

Perhaps variable pay till now was just an academic concept in large companies and employees there had not seen how variable pay could be impacted by performance, Mr Jetli explains.

“At MindTree, we are reasonably comfortable for the next 3-4 months and there are no predictions of gloom and doom,” he says.

Ms Ivy Mukherjee, Regional Head, South, Human Capital Group at Watson Wyatt, an HR consulting firm, says that she does not see any panic in the industry right now and companies that do not have a robust compensation structure will now look at setting up systems that can take the troughs and the peaks of the economy.

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