Cognizant CEO Ravi Kumar said that more than 3,00,000 employees will get imminent salary hikes.
The announcement comes days after Cognizant’s chief people officer, Rebecca Schmitt resigned from her office.
This is the third cycle of hike to be given in the past 18 months.
It is part of the ‘two-merit cycles’ in a year – a one-time measure announced by the company in November 2022.
Internal statement
Ravi Kumar, wrote in an internal mail, “This week, the vast majority of you who are in levels up to Associate Director will receive your 2023 merit pay eLetters.
Keep in mind that we advanced this merit increase to be six months earlier in the year, following year-end performance reviews.
This means many of you are seeing your third merit increase in 18 months.”
The email further said, “Combined with the merit increases to eligible directors and above received in January, Cognizant is awarding more than 300,000 associates a merit increase this year.”
The first cycle was awarded with effect from October 2022.
Addressing attrition
Aditya Mishra, MD and CEO of CIEL HR, said, “Normally companies come out to offer these kinds of largesse when they want to reduce attrition.
Attrition that was high in the Indian IT sector is gradually stabilising.”
The company has been trying to arrest soaring attrition levels, which has been a major pain point.
It declined from 35 percent to 25 percent in Q4FY22, with involuntary attrition at 6 percent.
CFO Jan Siegmund told analysts last quarter that the company was in the direction of becoming a more attractive employer, and that the labour market dynamic had shifted as well.
TCS
Meanwhile, major rival and India’s largest IT services company Tata Consultancy Services (TCS) announced it will award annual increments to employees with effect from April and that the top performers will be awarded 12-15%.
It further announced 100% variable pay for all eligible employees for the fourth quarter of the year.
TCS’ chief human resources officer Milind Lakkad said that the salary revisions will be like usual, and the top performers will get a 12-15 per cent hike
It also plans to increase base salaries of fresh campus recruits.
