Half of planned 100k lateral hiring has been done: Cognizant India chief

In a Q&A, Rajesh Nambiar dwells on the reasons for an attrition rate as high as 31% and why he thinks the company will deliver growth in the coming quarters

A day after Cognizant posted its second quarter results, raising its annual forecast and reporting an attrition rate of 31 per cent, Rajesh Nambiar, President-Digital Business & Technology and Chairman, India at Cognizant, spoke about the reasons for the high number and why the company is confident it will be able to deliver growth in the coming quarters.

Edited excerpts:

Q: Your quarterly annualised voluntary attrition was 31 per cent in Q2. Though Cognizant did flag this in the last quarter, how is it thinking about this level of attrition and what are your plans to mitigate it?

A: The number you see is 31 per cent, but if you look at the quarterly annualised attrition, it is about 28.8 per cent or so. Also, what we count as attrition includes trainees, our employees in the BPO business, everything put together, while others tend to have a very different type of measurement.

But we still believe that this is higher than what it should be. We have doubled down on our hiring, and in addition to investing in our own people, more than ever, we are also making record hires to ensure that we will have a very robust talent pipeline. We are going to be absorbing 100,000 lateral hires this quarter. We will train roughly about 95,000-100,000 people in new digital capabilities. We're also looking at 30,000 new graduate hires, who have been on boarded already for financial year 2021. We have also given offers to 45,000 new graduate hires this year so they will be on boarded next year.

Q: Do you think there are enough people in the market for you to be able to meet the 100,000 lateral hire target?

A: More than half of it is already done, since we are in the middle of the year. Last quarter was one of the largest lateral hirings we have ever done. The market for digital talent is intensely competitive, which is creating an imbalance between demand and supply of skilled people. Some of the hottest skills in demand today are SaaS capabilities, digital engineering, and full stack engineers. While we are a very attractive company to poach from, we are also doing whatever we can to ensure that we also retain people better.

Q: What are some of the things you are doing to retain talent?

A: We've added hundreds of recruiters and so as to meet the record number of hirings. We also do a lot of job rotations, we have introduced some higher education programmes for our junior associates, which means that if they want to do any education they could continue to work with us and still do the higher education. From the first of October, we're going to have a merit cycle, and we are also going out and hiring more so that's why you see from our results that attrition hasn't really slowed down our top line growth. Of course it's a concern to us, and we need to address it, but we are able to manage.

Q: What are you hearing from the clients? What are the reasons for increasing your outlook?

A: The demand situation is pretty good today and things have really been very, very solid. We are seeing a significant uptake on the broader side. I believe that we don't really have a demand issue since there is a 12 per cent growth in the bookings, so that gives us the confidence to raise outlook. Also, the fact that we've been able to execute really really well.

Q: Do you see travel and people movement for work beginning anytime soon?

A: It depends on where this pandemic is going to lead us. Let's take just India for example, we haven't been able to take a call on what point in time we will open the office. We know for sure that we won't be in a hurry to open the offices, we have to sort of wait and watch. If there's going to be a third wave (I hope not), but that's going to be a big, big thing, with the new variants which are coming out. Most folks from India can't even travel to the US because of the restrictions on travel. Vaccination is going to be the key. We were able to vaccinate over 160,000 of our associates, which is 70 per cent of our India-based workforce. Towards the later part of the year you'll find a lot more of these getting relaxed a little more, subject to the fact that there are no more surprises with the new variants or a new wave.