What HCLTech CEO C Vijayakumar said on linking variable pay to office attendance
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Tata Consultancy Services (TCS) recently reported a close to 70% of employees returning to office after the company linked variable pay to attendance. IT major HCLTech, however, has no plans to do the same. In an interview with Money Control, chief executive officer C Vijayakumar said that the company has “no such plans to link variable compensation with bringing people to office”.
“Return to office continues to increase, and it varies from business line to business line.Some business lines, we’re able to comfortably work remotely. And for some business lines, we think getting people back to work is the right strategy. We don’t have any such plans to link variable compensation with bringing people to office,” Vijayakumar said.
The report also quotes HCLTech chief people officer Ramachandran Sundararajan who said during the company’s Q1 earnings conference on July 12 that variable pay is not a big cost for the IT company. “The quarterly variable pay is only applicable for the junior level employees and not the mid and senior levels. And there is no significant shift in that decision, it’s the same quarter on quarter,” Sundararajan then said.
HCL Tech CEO dismisses fears of technology insourcing eating into the share of Indian software exporter
Stating that such insourcing is limited to mostly large captive players and few conglomerates, Vijayakumar told Economic Times, “I don’t think it’s across the board. There are continued opportunities to build India centres for global clients. It’s only some very large institutions, especially very large banks, who can build a big scale in India, are those who are likely to insource a little bit more.”
He stated that the company’s dip in growth in engineering, research and development (ER&D) and in financial services will bounce back from the third quarter. “..although the next three quarters of the fiscal year ending March 2025 are likely to remain subdued as in FY24,” he added.
Vijayakumar also highlighted that investments in generative artificial intelligence (AI) will bring the next discretionary spend growth. The Noida-based IT major is working on around 200 proofs of concept in GenAI which are already contributing to its revenue.
“It will continue to scale. I think the next discretionary spend growth will come from GenAI-related investments, I would think. I think the efficiency aspects are generally getting built into contracts but GenAI is much more than efficiency kind of a lever,” Vijayakumar told ET in the video interview.
“Return to office continues to increase, and it varies from business line to business line.Some business lines, we’re able to comfortably work remotely. And for some business lines, we think getting people back to work is the right strategy. We don’t have any such plans to link variable compensation with bringing people to office,” Vijayakumar said.
The report also quotes HCLTech chief people officer Ramachandran Sundararajan who said during the company’s Q1 earnings conference on July 12 that variable pay is not a big cost for the IT company. “The quarterly variable pay is only applicable for the junior level employees and not the mid and senior levels. And there is no significant shift in that decision, it’s the same quarter on quarter,” Sundararajan then said.
HCL Tech CEO dismisses fears of technology insourcing eating into the share of Indian software exporter
Stating that such insourcing is limited to mostly large captive players and few conglomerates, Vijayakumar told Economic Times, “I don’t think it’s across the board. There are continued opportunities to build India centres for global clients. It’s only some very large institutions, especially very large banks, who can build a big scale in India, are those who are likely to insource a little bit more.”
He stated that the company’s dip in growth in engineering, research and development (ER&D) and in financial services will bounce back from the third quarter. “..although the next three quarters of the fiscal year ending March 2025 are likely to remain subdued as in FY24,” he added.
Vijayakumar also highlighted that investments in generative artificial intelligence (AI) will bring the next discretionary spend growth. The Noida-based IT major is working on around 200 proofs of concept in GenAI which are already contributing to its revenue.
“It will continue to scale. I think the next discretionary spend growth will come from GenAI-related investments, I would think. I think the efficiency aspects are generally getting built into contracts but GenAI is much more than efficiency kind of a lever,” Vijayakumar told ET in the video interview.
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