Cognizant plans to hire 45000 graduates in Q4 with attrition rising to 33%

With unprecedented competition and demand for talent in the IT industry, Cognizant on Wednesday, October 27, reported that it would be making offers to 45,000 new graduates in the fourth quarter to onboard in 2022.

“In the fourth quarter [Oct-Dec 2021], we expect to make offers to 45,000 new graduates in India for onboarding in 2022,” CEO Brian Humphries said, stating that the demand-supply imbalance is “particularly acute”.

The company, headquartered in New Jersey, USA, has a significant number of employees in India. While it has announced fresher hiring targets like its other Indian counterparts, the organisation's attrition climbed to 33%.

While the 33% figure was calculated on an annualised basis, CEO Brian Humphries said that on an LTM basis, attrition came in at 24%. The LTM basis for attrition is commonly used for Indian companies. With Cognizant’s attrition being higher than its India peers, TCS had the lowest attrition at 11.9%, Wipro at 20.5%, Infosys at 20.1% and HCL Tech at 15.7%.

Announcing its results for the third quarter, Cognizant said that it had a net addition of over 17,000 employees during the quarter. The company has over 2 lakh employees in India (out of 3.18 lakh total), and has business centres in Mumbai, Bengaluru, Chennai, Coimbatore, Gurgaon, Hyderabad, Kochi, Kolkata and Pune.

To address the elevated voluntary attrition, Brian said that retention and recruitment have the leadership’s attention. The organisation said it is taking different measures to combat the same. Annual hikes will also be rolling out during the fourth quarter, CFO Jan Siegmund added. Retention measures, according to the company’s top management, include annual salary increases, promotions, and opportunities to explore open job roles in the company.

“We also continue to invest significantly in our people through increased compensation, rolling quarterly promotions for billable associates and training. As a reminder, our annual merit increase for the majority of our associates is effective October 1,” Jan further said.

Jan added that voluntary attrition was highest in the mid-junior levels primarily in India. “...it's not just in one location in India, it's broad-based, but also against certain skills”.

“It's just a hot labour market. It is extremely consistent, I think in the country you've seen from our peers in the industry …We're working very hard to mitigate that. We do expect attrition to fall, sequentially on a year-over-year basis from where it is in Q3,” he said. He said they are still anticipating elevated attrition in the coming years.

Amid the increased attrition, the CEO has said for a second-quarter that the company does not have the people to fulfill its potential. “Therefore, we've been faced with choice points, which clients to serve, which deals to chase, where we walk away, where we're willing to make pricing stances that may put a deal at risk, but it's the appropriate thing to do given to the demand, supply and balance,” he said.