As a result of its workers leaving in droves, Cognizant is experiencing difficulty as it is forced to decline the new business.
The Figures
For the quarter ended March 2021, its quarterly annualised attrition rate was 21%. Attrition was voluntary in 18% of cases.
Compared to TCS, Infosys, Wipro, and HCL Tech, their attrition rates were 8.6%, 13.9%, 15.5%, and 11.8%, respectively.
App happening when There is a tremendous demand for outsourcing at the present time.
Retention Measures Bear Minimal Results
The booming demand for specific IT roles offered extravagant perks makes it challenging to commit to any company.
Analysts predict that the firm’s attrition rate will spike again in Q2 and start to recover slowly in the second half.
Despite attempts at talent retention like quarterly promotions, salary increases, training and job rotations, the company has a low retention rate.
In May, a record number of freshmen were enrolled.
Leaders And Executives Quit
The firm has let go of several of its leaders 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 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 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.
Losing Market Share
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 significant revenue opportunities, a fact made evident as it has not announced large deals as TCS, Infosys, or Wipro have.