Wage growth has peaked: TCS

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Wages for its information technology services employees had risen by about 12-15 percent in the fiscal year to March 2008, S. Padmanabhan, executive director of human resources, told a news conference on Tuesday.

"We believe wages have peaked in the software sector, and expect that they will not rise at the pace at which they have been rising," he said.

"The wage stabilisation is linked to a variety of factors like the availability of talent, pricing by competitors and the general market sentiment," he said.

TCS, India's top software services exporter, had 104,347 employees as of Sept. 30, and had an attrition rate of about 11.5 percent, lower than an industry average of 14-15 percent, Padmanabhan said.

A plan to hire 35,000 employees in the year ending March 2008 was on track, he said. TCS was stepping up recruitment from universities and setting up training centres in smaller cities.

A large pool of English-speaking workers and cheaper wages have helped Indian software firms attract large outsourcing contracts from Western firms looking to cut costs.

TCS, which got more than half its revenue from the United States in the September quarter, is also looking to hire more people in Latin America and North Africa to service clients in regions including Europe and the Middle East, Padmanabhan said.

"India still offers the best value proposition and cost arbitrage is an important part of the model, but you also have to look at how best to service clients," he said.

TCS had about 5,500 employees in Latin America and was setting up a training centre in Morocco, where about 200 employees serviced French-speaking markets, he said. About 8.5 percent of its employees are foreign nationals.

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