TCS to revise rates for staffing firms

Tata Consultancy Services (TCS) Ltd is revising the rates it pays to about 1,000 staffing firms for every engineer deployed, the first such revision by India’s largest information technology (IT) services company in the past six years.

- Devina Sengupta & Varun Sood

The Mumbai-based company communicated to the staffing firms last month that the new pricing structure for engineers, depending on the skill sets, will be effective from January, according to two executives privy to the development.

“The vendor contracts get renewed every September/October and are valid for a year. However, TCS informed us that our existing contracts will apply until December (of this year), and a new one will come into effect in January," said an executive at a staffing firm on the condition of anonymity as discussions are private.

The company’s rate card includes candidate placement costs, including compensation, vendor costs, and insurance, among other expenses. Introducing a new pricing structure aims to boost transparency and could benefit both staffing firms and TCS as a higher rate could lead to the IT services company attracting better candidates, according to a second industry executive. A spokesperson for the IT services major did not respond to Mint’s queries.