- Cognizant wants to stop top performers and digitally skilled employees from joining competitors.
- The annual attrition rate in the December quarter was 19%, the highest among large IT companies.
- The company will increase the offers for employees to match rival offers
Cognizant is seeing a high attrition rate, which means its employees are leaving the company. The company saw the highest attrition rate in the December quarter, about 19%, which is the highest among large IT companies.
There was a significant spike in voluntary attrition — employees leaving for other opportunities. Cognizant attrition rose to 16%, from 10%. Employees might also be leaving because of the 9-hr work policy implemented by the company.
Cognizant has set up a $30-million (Approx Rs 220 Crore) corpus to stop employees from leaving the company, dubbed as a retention fund, to hold back top performers and digitally skilled employees. The corpus is used when such employees receive offers from competitors. Cognizant, sources said, match the competitor’s offer.
When media asked Rajesh Nambiar, chairman and MD of Cognizant India, about the fund, he said, “As we said on our latest earnings call, the market for skilled digital talent is intensely competitive, creating demand-supply imbalances for certain skills. In key digital areas, there are more open positions than qualified persons to fill those positions. We are therefore heavily focused on maintaining a competitive and appealing employee environment where every person is inspired to achieve, driven to perform, and rewarded for their contributions.”
Cognizant has also increased the workday for its India workforce to nine hours, from eight hours. The company said this was to be in line with its peers’ practices. But analysts see it partly as a move to step up the company’s revenue growth and margins. Revenues declined for the first time in 2020. It has also simultaneously increased the number of paid leaves for employees to 36.
“These changes will help us level the field with our competitors in fulfilling client expectations of agile and accelerated development while significantly improving employee work-life balance,” the company said.