Cognizant’s attrition of 33% is highest in IT services industry
New Jersey-based Cognizant Technology Solutions Corp., which has more than two-thirds of its overall employees in India, has reported a steep quarterly annualized voluntary attrition rate of 33% during the September quarter, the highest among peers in the industry.
On a trailing 12-month basis, the attrition rate of Tata Consultancy Services Ltd (TCS) was lowest among its peers at 11.9% in the September quarter. During the same period, the attrition rate of Infosys Ltd stood at 20.1% while that of Wipro Ltd stood at 20.5%, and HCL Technologies Ltd, at 15.7%.
More than 200,000 of Cognizant’s total 318,400 employees work in India. When asked why the attrition rate was high, Rajesh Nambiar, chairman and MD, Cognizant India and president, Digital Business & Technology, said in an interview on Thursday, “Attrition is an industry-wide concern. There is an unprecedented demand for talent and its widely known that the industry is impacted overall.”
Nambiar, however, insisted that the steep attrition rate has not impacted Cognizant’s growth. “We continue to deliver against our commitments to clients across the globe. Our bookings are at a healthy 24% growth year-on-year,” he added.
Analysts, though, point out that Cognizant has historically had a higher base attrition than peers, right from pre-Covid days.
“As far as recent uptick goes, while some of it, both planned and unplanned, can be attributed to the ongoing transformation at Cognizant, it is more significantly the macros that are at play. The IT services industry has been witnessing higher attrition levels over the last few quarters on the back of a demand-supply gap for tech talent, especially digital skillsets, as well as increased prevalence of the gig-economy versus long-term employment,” said Ankit Garg, associate director, Auctus Advisors.
Cognizant, meanwhile, has taken a number of measures to address the high attrition levels. It has stepped up its recruitment engine by onboarding a record number of 17,000 new hires in the September quarter taking its total headcount to 318,400. It is on track to onboard 30,000 new employees this year and roll out an additional 45,000 offers for 2022.
“We have also restructured our leadership with a good mix of internally promoted talent and lateral hires. We have a deep bench of seasoned talent and a highly skilled dedicated global team,” Nambiar said.
As a measure to retain talent, Cognizant has announced its annual merit cycle effective 1 October for most employees. “We continue to revisit and benchmark ourselves with the salaries in the marketplace and then we will do what it takes. Same thing with the promotion cycles. We continue to do a quarterly promotion cycle,” Nambiar said.
Cognizant also has a special jobs promotion programme which enables qualified employees to take up a role above their current level. “The training programmes are really helping us to retain our people…we are focusing on areas which will increase our stickiness with the employees and ensure that we are truly being an employer of choice,” Nambiar said.
Cognizant has deployed a phased approach to bring its employees back to the office and scale up operations as needed. “Given the success of our vaccination program, we introduced our Flexible Workspace program on 15 September which is a voluntary option for fully vaccinated associates to work from select Cognizant facilities,” Nambiar said. Livemint
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