Cognizant introduces 'two merit cycles' for employees to rein in attrition

Nasdaq-listed Cognizant Technology Solutions has introduced a one-time, ‘two merit cycles’ for calendar year 2022 (CY22) for its employees to arrest attrition. These include salary hikes, bonuses, and promotions, said Rajesh Nambiar, chairman and managing director, Cognizant India.

For the third quarter (Q3) of CY22 — July-September period — the company reported attrition levels of 29 per cent. For the preceding quarter (April-June), attrition was at 32 per cent. These numbers are still high, compared to peers Infosys (27.1 per cent), HCLTech (23.8 per cent), Wipro (23 per cent), and Tata Consultancy Services (21.5 per cent).

“We expect attrition to decline more meaningfully in the October-December quarter (of CY22). We’ve been working aggressively to not only mitigate attrition, but also propel the career growth of our people.  We have redesigned promotion initiatives, expanded learning and development programmes, and enhanced compensation and benefits,” said Nambiar.

Attrition for Q3 fell 2 points sequentially on an annualised basis and 3 points sequentially on a trailing 12-month basis.

The company also increased its headcount by 16,000 this quarter and said that it will hire 50,000 more in CY22. Its India employment now stands at 255,000 associates, up approximately 12 per cent on-year. This takes the total staff strength to 349,400.

Nambiar also stated that other than giving two merits in a single year, in India, the company has also reworked its promotion cycle by making it more frequent.

“We have redesigned our approach to promotions. This has resulted in significantly more promotions awarded more frequently across Cognizant. We have expanded our learning and development offerings to include 8,000 new learning resources and 550 learning paths,” he added.

The success of these initiatives and the impact in India is now propelling the company to take it to its North America geography where attrition has spiked and impacted business.

Chief Executive Officer Brian Humphries said during an earnings call that the North America efforts for bringing down attrition are somewhat similar to what the company is doing globally.