Cognizant is looking to hire 1 lakh people laterally as well as 30,000 freshers in 2021, the company announced on Wednesday, July 28, while announcing its results for the quarter ending June 2020. The US-based company, which has two-thirds of its employees in India, however continued to bleed people with eye-watering attrition rates, with total annualised attrition at 31%. The company had 3.01 lakh employees for the quarter ending June 2021.
During the company’s earnings call, CEO Brian Humphries said that macro demand backdrop has created a demand-supply imbalance in key skills. “As we noted in last quarter's remarks we expected attrition to go up sequentially in Q2, and it did. Second-quarter voluntary attrition reached 29% on an annualized basis or 18% on a trailing 12-month basis. As a reminder, our attrition metric captures the entire company, including trainees and corporate, across both IT services and BPO,” he said.
Even on the 12-month trailing basis, when compared to Indian IT majors, attrition is significantly higher at Cognizant. TCS saw 8.6%, Infosys saw 13.9% and Wipro saw 15.5%.
To combat this, the CEO said the company expects to hire approximately one lakh people laterally in 2021 and train close to a lakh associates.
“We continue to take a series of actions to reduce attrition including compensation adjustments, job rotations, reskilling and promotions, and a host of associate engagement activities. Fortunately, we meaningfully increased our recruiting capacity over the last six months as we anticipated a spike in attrition following the v-shaped demand recovery in the second half of 2020,” Humphries added.
He said that the company expects to onboard 30,000 freshers in 2021, and make 45,000 offers to freshers for onboarding in 2022. “Regardless of our attrition rate, we will still go through with those numbers because there is enough market demand for us to get after that opportunity and that's what we're quite excited about. The portfolio is more compelling than ever before and we've made huge progress in the last year to get after that market opportunity,” he said.
In India, Humphries said that attrition was primarily seen in India and was more in the junior and mid-levels.
“It's really one of the hottest markets we've seen or our team has seen over the last 10 plus years. So we're all dealing with it as it happens in the last month,” he said.
For employee retention, he added that annual merit-based increases have been announced in the last few weeks, and it will roll out from October 1.
“That's on top of a whole host of ad hoc measures we played through in the course of the last year. Out-of-cycle increases, promotion, retention dollars, we've announced a shift in the last few months to quarterly promotion cycles for billable resources. We've really fast-tracked job rotations and reskilling initiatives across the company,” he said.