In the recent annual report for the year 2009-10, TCS CEO and managing director N Chandrasekaran remarked: Given the volatile economic environment at the beginning of 2009-10, there was no annual increment for employees but as the business recovered from the second quarter onwards, employees were rewarded with quarterly variable payouts of between 125-150% and promotions. TCS is a unique case of not giving out stock option plan to its employees, especially when ESOP was high on the priority list of IT firms just a couple of years back, he informs. TCS has always invest ahead of demandin terms of solutions, manpower and markets. For example, it is way ahead of other Indian IT firms in China. Even in India, TCS is doing pioneering work in the government sector. Like its peers in the IT industry, TCS too gave out wage hikes during the first quarter which was about 10-13% to offshore employees and 2-3% to its onsite employees. Harit Shah, research analyst (IT and telecom), Karvy Stock Broking, says, ESOPs or no ESOPs, attrition levels will remain in the IT industry, especially when it is on a high growth trajectory. Besides, ESOP is not the only lever to hold employees back. Brand visibility of the employer in the market place, the client list it commands, working environment it gives to its employees along with the career growth prospects are key to retain employees. On all these parameters, TCS seems to score high on the charts. TCS recently set up a Resource Management Group (RMG) that would work towards various retention initiatives. Mukherjee feels the strengthening of the firms people management and training would improve its retention levels. The company plans to bring in rotation of employees for on-site locations. With the decrease in on-site opportunities, we intend to do rotation of employees so that more people get a chance to be at the clients location, says Mukherjee. There has to be a stress on aspirations and we have to ensure that business and HR works together to do that. The industry at the moment is witnessing the experienced band of about 3-6 years contributing to the majority of the attrition rate. The RMG will also identify individuals that are keen on having newer challenging jobs. The experienced employees have different aspirations and wage is not necessarily a reason for an employee to move out. For the IT industry, it is increasingly becoming an aspect of having a challenging job. And so, we would want to retain such employees by moving them to such projects, says Mukherjee. TCS also intends to translate a number of freebies into beneficial spends like increase in premium of health insurance and extra hospital coverage. Though, the company isnt keen on looking at a second round of wage hike, it might look at paying additional variable component, if the company continues to perform better....