Tata Consultancy Services (TCS) is poised to implement 1.1 lakh promotions in fiscal year 2025 (FY25), despite postponing its customary annual salary increments. This decision marks a significant shift from the company’s traditional April salary hike cycle, reflecting a strategic choice to reward employee performance through promotions without accompanying pay raises.

Milind Lakkad, Executive Vice President and Chief Human Resources Officer (CHRO) at TCS, confirmed that the company will move forward with these promotions as part of its ongoing commitment to employee development. While salary increases will not be provided this year, the emphasis will be on merit-based advancements to ensure that top performers are recognized and retained. This approach is part of TCS’s broader strategy to maintain organizational stability and employee morale during uncertain times.

Although this decision has garnered attention, TCS executives have defended it, stating that it is part of a larger strategy to retain talent and prepare for future business needs. Samir Seksaria, Chief Financial Officer (CFO) at TCS, noted that the company’s tactical interventions for FY25 had an impact of approximately 100 basis points, primarily due to promotions and merit-based advancements. However, some analysts have raised concerns about whether the current market conditions warrant such employee interventions outside the usual pay review cycle.

Looking ahead, TCS is also focused on expanding its talent pool. The company plans to hire 42,000 trainees in fiscal year 2026 (FY26), following a similar number of new hires in FY25. This hiring initiative is part of TCS’s strategy to meet increasing demand, fill positions left vacant due to attrition, and enhance its workforce with digital expertise. These strategic hiring efforts are essential for TCS to remain competitive and agile in an increasingly digital-first environment.

Lakkad emphasized that TCS’s focus on digital talent remains a priority. Last year, 40% of new hires were for digital roles, a significant increase from 17% the previous year. This digital-first approach is crucial for TCS as it adapts to the evolving IT services landscape and responds to growing client demands for digital transformation. The company is also addressing attrition, which stood at 13% in the past year, ensuring it has sufficient talent to meet its business objectives.

As part of its recruitment process, TCS utilizes its National Qualifier Test (NQT ), an integrated assessment for entry-level roles across three categories: Prime, Digital, and Ninja. This comprehensive hiring process ensures that TCS attracts top talent capable of driving the company’s growth in the digital era.

TCS’s hiring strategy for FY26 aims to bolster its talent pool, focusing on fresh recruits who will play a vital role in the company’s long-term goals. With digital transformation at the heart of its strategy, these new hires are expected to significantly contribute to TCS’s future growth.