HCL hikes CTC for freshers

HCL Technologies has increased the compensation package for freshers to ₹ 4.25 lakh per year from ₹3.5 lakh and implemented comprehensive increment plans for the entry-level. This was informed by the company's chief human resources officer VV Apparao.

He added that this was done in order to attract more talent and combat an acute attrition problem. According to India's third-largest software services provider by revenue, it will take a few more quarters for the attrition rate to drop below 20%. Simultaneously, the company is expanding into smaller cities in India and abroad in order to expand its talent pool.

Due to higher employee costs and a seasonal dip in its products and platforms (P&P) business, HCL Tech reported an operating margin of 18 per cent for the quarter ended March 31 and 18.9 per cent for the full fiscal year, which were below expectations. In FY22, the entry-level compensation increase was added to an existing programme that allows freshers to obtain additional certifications in order to increase their annual compensation to Rs. 6 lakh.

"We're even talking to the educational institutions where we're selecting these kids and asking them to make it a part of the curriculum so that they finish and join at a salary of Rs. 6 lakh per year," Apparao said.

In FY22, the company hired 23,000 new employees, exceeding its target of 20,000-22,000 for the year. In FY23, it expects to hire around 34,000 new employees. Its newer hires account for about 11% of its total workforce of 208,877. Larger competitors like TCS and Infosys have far exceeded their initial guidance, reporting a fresher intake of 16 per cent and 27 per cent of their total employee base, respectively, in FY22.

According to Apparao, the company plans to implement wage increases in July, similar to the 7-8 per cent range offered in FY22. This is in contrast to TCS's indication of a slight upward bias in increments.

"We already implemented increments, defined newer compensation grids, and corrected the previous five batches last year. In addition, a couple of retention kitties had been deployed. These are substantial sums. As a result, I don't believe there is a need for anything more than the last year's increment, which was not a stand-alone increment. All of these factors have already contributed to the wage bill "Apparao explained.