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HCL Tech clarifies on bonus repayment policy for employees

HCL Tech clarifies on bonus repayment policy for employees

On Thursday, BusinessToday.in reported that the company has removed one contentious provision of its bonus repayment policy post facing ire from former employees.

HCL Tech's attrition rate has climbed to 19.77 per cent for Q3FY22 which, according to Apparao, will see some flattening in next few quarters. HCL Tech's attrition rate has climbed to 19.77 per cent for Q3FY22 which, according to Apparao, will see some flattening in next few quarters.

HCL Technologies Ltd's Chief Human Resources Officer (CHRO) Apparao VV on Friday clarified that the company's employee bonus policy has been in place for a decade and was grossly misrepresented recently due to which the IT major has decided to revoke various provisions. 

On Thursday, BusinessToday.in reported that the company has removed one contentious provision of its bonus repayment policy post facing ire from the former employees. These employees are mulling to take the legal course after the IT firm asked them to pay back the bonuses on quitting the company.

"This policy was adopted for larger employee wellbeing under which, we would hand over the bonuses to the employees in advance and ask for repayment if they quit the firm. However, during the pandemic, many employees who quit the company have urged not to recover bonuses during the full and final settlement when they leave the company. We then decided to revoke the provision of repayment of bonuses with the effect from December 22, 2021," Apparao told BusinessToday.in in response to a question.

He also added that the company has revoked another clause of the bonus policy on January 1 with respect to the repayment of the variable components if employee decides to leave the firm. 

Meanwhile, HCL Tech's attrition rate has climbed to 19.77 per cent for Q3FY22 which, according to Apparao, will see some flattening in next few quarters.

However, the company is on course to onboard 40,000 employees in FY22 and has added 10,143 employees during the October-December quarter. In order to mitigate the challenges posed by talent retention, the company said that it has invested 2.5 x more in employee engagement initiatives with incentives through Restricted stock units (RSUs) to the mid-and senior-level employees for maintaining a stability in the workforce.

HCL Tech is also keen on recruiting people from India's tier 2, 3 cities with the creation of New Vista locations across the country. In addition, the efforts are also afoot to strengthen the localised workforce in client geographies in countries like Sri Lanka, Costa Rica, Vietnam.

The talent recruitment, retention as well as high-attrition costs as per Prateek Aggarwal, the Chief Financial Officer of HCL Tech has caused supply side constraints and impacted the profit after tax, net income during the quarter. 

Earlier today, HCL Tech reported a 13.6 per cent year-on-year fall in consolidated net profit at Rs 3,442 crore for the quarter ending 31 December, 2021. The IT major had posted a net profit of Rs 3,969 crore in the year-ago period.

The company's revenue rose 15.7 per cent YoY to Rs 22,331 crore in the said quarter as against Rs 19,302 in the same quarter last fiscal.

The board also approves an interim dividend of Rs 10 per equity share of Rs 2 for FY22.

The IT major stated that it expects revenue to grow in double digits in constant currency (CC) for FY22. EBIT margin expected to be between 19 per cent and 21 per cent in current fiscal.

Also read: HCL Tech acquires Hungarian data engineering services firm Starschema for $42.5 mm

Also read: HCL Tech Q3: Net profit falls 13.6%; board approves interim dividend of Rs 10