Employee attrition will stabilise in 2nd half of year: Cognizant
Scarce digital talent base and rising offshoring major factors behind attrition, say experts
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Bengaluru IT services major Cognizant expects its employee attrition to come down in the second half of this year after a likely further increase in the second quarter.
Cognizant reported 200 basis points rise in its attrition at 21 per cent during the January-March quarter as compared to 19 per cent in the previous quarter. Voluntary attrition rose to 18 per cent for the quarter ended March from 16 per cent reported in December quarter.
"Daily resignations increased through the first quarter, peaking in March. On a positive note, resignations slowed in April and continued to slow in May. However, given two months' notice periods in India, we anticipate further sequential increases in attrition in Q2 and before a gradual recovery in the second half," said Brian Humphries, CEO at Cognizant.
The company, which follows January-December financial year cycle, also said that upside in revenue growth got impacted due to unavailability of human resources. "In some cases, commercial opportunities were forgone due to an inability to source talent," said Humphries at the post results analyst call.
The US-headquartered IT services firm employed 2,96,500 employees globally by the end of March quarter with over 90 per cent of staff in India.
The company, however, said it is taking up various steps to check the attrition rate in the coming quarters.
"To address retention challenges, we've been executing a multipart plan that includes stepping up our internal engagement efforts and increasing investments in our people through training and job rotations to provide opportunities for career growth; shifting to a quarterly promotion cycle for billable associates; and implementing further salary increases and promotions for high-demand skills and critical positions," the CEO said.
Cognizant also plans to hire more number of fresh graduates from college campuses this year.
According to the management, the IT firm plans to hire 28,000 new graduates in India, which is up from 17,000 hired in 2020.
Cognizant posted a 2.4 per cent rise sequentially in its revenues (in constant currency term) at $4.4 billion for the January-March quarter. Sound performance in the healthcare sector was the major factor driving the IT firm's growth.
During the January-March quarter, most large IT services companies have witnessed rise in their attrition.
