This is happening at a time when there is a great demand for outsourcing.
Cognizant is going through a rough patch as it is being forced to decline new business because its workers are leaving in droves.
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The Figures
Its quarterly annualised attrition was 21% for the quarter ended March 2021.
Out of this, 18% was voluntary attrition.
In comparison, rivals TCS, Infosys, Wipro, and HCL Tech’s attrition stood at 8.6%, 13.9%, 15.5%, and 11.8% respectively.
This is happening at a time when there is a great demand for outsourcing.
Retention Measures Bear Minimal Results
Another factor to be considered is the booming demand for specific IT roles who are being offered extravagant perks to commit to any one company.
According to analysts, the firm’s attrition rate is going to see another spike in Q2 and will start to slowly recover in the second half.
This is despite the company’s best efforts at talent retention such as quarterly promotions, salary hikes, training and job rotations.
It also inducted a record number of freshers in May.
Leaders And Executives Quit
The firm has had to let go of several of its leaders as well who had spent decades with the company.
Since CEO Brian Humphries took charge in 2019, senior executives Arun Baid and Dan Smith have left the company.
These executives have been snapped up by private equity firms and global IT/BPM services companies.
Mindtree, Firstsource, Bristlecone (part of Mahindra & Mahindra), Collabera, Hitachi Vantara, Zensar, Qualitest and Virtusa are eight companies which have selectively picked ex-Cognizant leaders as their CEOs.
Multiplier Effect Poses Another Challenge
This creates another problem for Cognizant since these leaders take along Cognizant employees with them to join their new ventures.
For example, one senior executive will bring onboard a few program managers/team leads.
These team leads, in turn, hire engineers from their team and so on, creating a multiplier effect.
Cognizant will also have to watch the number of promotions and the quantum of hikes that it hands out because its pace of growth is lower than its peers.
It lost market share to its peers due to insourcing, with a ransomware attack also impacting service delivery.
It also lost out on large revenue opportunities, a fact made evident as it has not announced large deals as TCS, Infosys, or Wipro have.