'Freshers or existing employees should upskill to earn more': TCS HR head on stagnant salaries at entry level

The IT sector is currently experiencing a challenging period due to an industry slowdown. However, despite these challenges, the IT services sector remains a popular choice for students embarking on their careers. The IT sector provides some of the most lucrative employment opportunities. However, the sector has faced criticism for the lack of growth in entry-level salaries.

For quite some time, college graduates and entry-level employees have raised concerns about the stagnant starting salaries for newcomers in IT firms.

In a recent interview with CNBC TV18, when Tata Consultancy Services (TCS) chief human resources officer (CHRO) Milind Lakkad was asked about the stagnant salaries in the top tech services giants TCS and Infosys, he said freshers or existing employees should upskill to earn more. He admitted that fresher salaries have been around the Rs 3-4 lakh per annum range for years.

“We are paying based on the talent and we encourage people to come at different cadres... If freshers or existing employees are willing to upskill, then they can earn double and for some skills, salaries go up to Rs 10 lakh. 

He added: “We offer close to Rs 10 lakh for innovators. We are hiring people from NITs and IITs where we pay a lot more,” Lakkad said.

TCS in its Q3 FY24 results stated that its headcount has reduced for the second consecutive quarter by 5,680 employees in the October to December 2023 period, taking the total strength to 603,305.

“When you look at headcount, you should look at the long term. Longer term means we hired a whole bunch of people…very large numbers in FY22 and FY23. And we were leveraging all of this workforce over the past three quarters, and we continue to leverage that,” he said.

On January 11, TCS reported a net profit of Rs 11,058 crore in Q3, up 2 per cent from Rs 10,846 crore in the same quarter in FY23. Consolidated revenue rose 4 per cent YoY to Rs 60,583 crore in the three months to December 31 from Rs 58,229 crore a year earlier, TCS said in an exchange filing.

Last year, a National Institutional Ranking Framework (NIRF) report released by the Ministry of Education claimed that a fresh engineering graduate was taking an average annual starting salary of Rs 4.57 lakh in 2022, which has increased by 15 per cent to the academic year 2020-21. News reports said that the average annual salary of engineering freshers has increased by 43 per cent in the last five years as an engineering graduate after passing out from college was earning around Rs 3.19 lakh per annum in the academic year 2017-18.

An engineering graduate from one of the top 100 engineering colleges received an annual salary of Rs 11.06 lakh in 2022, representing a 60 per cent increase compared to the previous five years.

Of these, IIT Guwahati offered the most and the starting engineer's salary was about Rs 22.5 lakh per year followed by Rs 20.5 lakh at IIT Delhi. In comparison, IIT Madras had an average salary of Rs 17 lakh per annum for engineering freshers, it was Rs 18.8 lakh at IIT Bombay, and Rs 20 lakh at IIT Hyderabad, a  report in the Hindu Businessline said.

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