HCL Tech employee bonus policy has been misrepresented, says CEO

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

On Thursday, BusinessToday.in reported that the company removed one contentious provision of its bonus repayment policy post, which was facing ire from the former employees. The IT firm asked the employees to pay back the bonuses on quitting the company, which is why they are mulling to take the legal course.

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

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

HCL Tech's attrition rate has gone up to 19.77 per cent for Q 3 FY 22 which, according to Apparao, will see some flattening in the next few quarters.

The company added 10,143 employees during the October-December quarter and is on course to add 40,000 employees in FY 22. In order to mitigate the challenges of talent retention, the company said 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 in order to maintain a stability in the workforce.

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

According to Prateek Aggarwal, the Chief Financial Officer of HCL Tech, the talent recruitment, retention, and high-attrition costs have a negative impact on the profit after tax, net income during the quarter.

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

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

The interim dividend of Rs 10 per equity share of Rs 2 is approved by the board for FY 22.

The IT major stated that it expects revenue to grow in double digits in constant currency CC for FY 22. The current fiscal year's EBIT margin is expected to be between 19 per cent and 21 per cent.