31% Cognizant Employees Resigned In 12 Months; 33,000 Indians Hired In 90 Days!
New Jersey-headquartered Cognizant has hired 41,000 employees in 2021 out of which 33,000 were new college graduates hired from India even as the IT services major reported the highest voluntary attrition at 31% in an industry witnessing a war of talent, as per the fourth quarter earnings report released by the company on Thursday.
Many Indian employees
Nearly two-thirds of Cognizant’s employees are based in India. The company has said in an official statement that it has also invested in giving 23 million hours of training to their employees.
The IT company has an employee base of 3.3 lakh and its attrition woes have been existent for sometime now with top executives in the company leaving in succession.
The annualised voluntary attrition of Cognizant stood at 31% for 2021, which is still lower than the 33% that was reported by the company in the September quarter. Top sources within the company have said that the IT services firm has seen more employee poaching, especially with the top executives leaving the firm.
“In some of the big projects, the employees have joined client firms with almost 50% salary hikes offered. This has, in turn, posed retention problems ,” one of the sources said.
Top IT company management commentaries have suggested that the attrition is still going to remain high for at least a few more quarters, while stabilising in the second half of the FY23.
“During 2021, we continued to invest in our people and strategic initiatives while navigating the heightened cost pressures driven by the labor supply demand imbalance. With $2.7 billion of cash and short-term investments and free cash flow in excess of 100% of net income, we are well-positioned to execute our balanced capital allocation framework, including the third -consecutive annual increase of the dividend announced today,” Jan Siegmund, Chief Financial Officer, said at the fourth quarter, 2021 earnings call.
Concerns of Brokerages
Brokerages have been voicing concerns of Cognizant’s talent crunch issues that have been bringing supply side constraints on large projects and that could hit the deal momentum as well. But, the company CEO reposed confidence on his workforce saying that the company has entered 2022 with momentum and confidence that its talented employees’ position the company to capture the substantial market opportunity.
The company has said that its revenue-outlook for 2022 is highest-ever at 8.5-11.5% growth to $20 billion-$20.5 billion .