The Hindu Business Line : TCS cuts annual vacation days to 16 for India-based staff

Impact
Investment banking firm sees productivity benefit
The company says it will neither significantly boost our productivity nor increase our attrition

Mumbai , Nov. 29

Tata Consultancy Services has, effective October 1, 2006, cut the number of annual vacation days for its India-based employees to 16 from 22.

A report from an investment banking firm, in a privately circulated report, has said that the cut in annual vacations is an attempt by the company to meet its target for FY07 margins.

It said that reduction of vacation days would have a productivity benefit for the company. The addition of 6 working days is a near 2.5 per cent productivity benefit, says the report.

"This could have a positive impact of 175 basis points on margins on an annual basis. For the second half of FY 07, this is a tailwind of 80-90 basis points," it says.

Global practices

The company's stand on the leave reduction is quite simple - it is a move to "align with international practices" and has nothing to do with its financials.

"We believe in aligning our practices with global benchmarks and this is a significant move in this direction," said an official spokesperson for the company.

TCS has not changed its sick leave and casual leave allotments, leaving them at 10 days and 7 days respectively.

"We are a global player with a global-centric work force, and we don't believe that the reduction of vacation days would either significantly boost our productivity or increase our attrition rate," he added. TCS has an attrition rate of 10 per cent.

TCS believes that the move will have no impact on employee turnout or attrition rates, he said.

In the US and in several European countries, most companies earmark 10-15 days for employee vacation, which is well below the Indian standard. However, several Indian companies with global operations are increasingly following western practices. However, the new move hasn't really impressed the TCS workforce. "Even prior to the new order coming in place, we had to literally plead with the management to push through for a vacation.

It is going to be even worse now," said a TCS employee on condition of anonymity.

However, the company is understood to have reduced the notice period for employees leaving the company to one month, from three months.

The current reduction in earned leave could have something to do with this, said another employee.

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