Cognizant on hiring binge

Cognizant is planning to hire around 1 lakh experienced professionals along with training close to 1 lakh of its employees in this financial year as the US-based IT services firm struggles to contain elevated levels of attrition. The IT firm also said that it would give offers to 45,000 graduates through campus placement this year, who would join next year.

For the second quarter ended June, the company saw its voluntary attrition rising to 29 per cent, up 11 per cent from the preceding quarter. The company, which follows January-December financial year cycle, has around 70 per cent of its employees based in India.

"Our human resources team has done a remarkable job helping us mitigate the impact of elevated attrition through comprehensive hiring, onboarding and skilling programs. In fact, we now expect to hire approximately 100,000 laterals in 2021 and to train close to 100,000 associates. In addition, we expect to onboard approximately 30,000 new graduates in 2021 and make 45,000 offers to new graduates in India for 2022 onboarding," said Brian Humphries, Chief Executive Officer of Cognizant on an analyst call announcing the second quarter results.

With 29 per cent of attrition for this quarter, Cognizant seems to have the highest churning rate among all its peers. However, all Tier-1 companies have seen rise in attrition rate during this quarter and have planned robust fresher hiring in FY22.

The top-3 IT services firms in India -- Tata Consultancy Services, Infosys & Wipro -- have announced to hire around one lakh freshers this year.

According to Cognizant, the attrition was primarily seen among junior and mid-level employees in India.

"Annual merit-based increases have been announced here in the last few weeks. They're effective 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," Humphries said.

He also said that with growth coming back, attrition would come under check for the company. "The reality is 15 per cent revenue growth this quarter also gives the organization a little bit of energy that, growth is coming back and with growth comes good things in terms of career path opportunities, rotations and promotions and whatnot. So, I'm sure today's top line story will help a lot of employees feel better," he added.

Cognizant reported revenues of $4.6 billion for the second quarter ended June, which was higher 12 per cent over the same period of last year on constant currency term.

Owing to demand uptick, the IT firm also raised its revenue guidance to 9 to 10 per cent in constant currency term for 2021 from earlier guidance of 7 to 9 per cent. Its revenues will be in the range of $18.4 billion to $18.5 billion for 2021.