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With the uptick in the demand environment and a steady order inflow, Nasdaq-listed IT services company Cognizant has announced to complete the onboarding (joining) of its campus hires of 2013 batch, quite early this year.
The US-based company which has significant offshore delivery capabilities in India, said it was expecting to complete the onboarding of 2013 campus graduates as early as December this year, well-ahead of its original plans.
“We ramped up hiring towards the end of last year and early this year, allowing us to meet the increased demand that we have witnessed during the second and third quarters by consciously taking up our utilisation,” said Gordon Coburn, president of Cognizant.
“During the third quarter (June-September), we started on-boarding the graduates from the class of 2013. Given the current pace of on-boarding, we will have all 2013 campus graduates, who accepted our offers, on-boarded by the end of this year, well ahead of our original plans,” he added.
According to the company, these campus recruits who graduated in June this year were given offer letters during September-November last year. In a normal circumstances, the joining of campus recruits stretches till March of the subsequent year.
During the past couple of years, most of the IT companies in India had been delaying the onboarding of campus recruits, since the demand environment were quite sporadic. Besides, the industry had also to certain extent lost its ability to predict over the business amid high degree of uncertainties. With Cognizant announcing to complete the joining of campus recruits quite early this year, industry experts believe that this may be a sign that predictability has returned back into the business.
“While the predictability has certainly gone up with the key American market starting to respond positively and increase in offshoring from Europe, IT companies’ predictability over their attrition rates has also certainly gone up,” said Kris Lakshmikanth, Founder & CEO of Headhunters India. “It’s a fact that attrition levels in most IT companies are going up which is why they require doing the backfilling with freshly recruited graduates,” he added.
Of Cognizant’s overall headcount of 166,400 as reported on September 30, 2013, around 75% are based out of India. The company has delivery centres spread across 10 locations in the country.
Tuck-in acquisition strategy
While the Cognizant has stepped up its pace of acquiring companies during the past couple of months, the company is not going to make any change in its 'proven’ tuck-in acquisition strategy.
According to Malcolm Frank, Executive VP, Strategy at Cognizant, the company would continue to make tuck-in types of acquisitions which can be a catalyst in enhancing its geographic penetration, acquiring new technology capabilities thus strengthening the service lines. “We acquire for strategic capabilities; we don’t acquire for capacity. It is something which we have proven over the past five years. Given our ability to build scale organically, we continue to acquire for capability,” he said.
During the last seven years, Cognizant has made around 17 companies which are primarily aimed at helping it to fill gap in certain areas. In October this year, Cognizant has made two acquisitions including France-based Equinox Consulting, and ValueSource NV, the BPO arm of Belgium-based KBC Group. As on September 30, 2013, Cognizant has a cash reserves of around $3.4 billion.
