Cognizant reports highest ‘Attrition Rate’ among top IT leaders: Q4 results
IT Major, Cognizant reports the highest attrition rate in December ending quarter (Q4), and the company has put up a $30 million budget to improve its employee retention. This budget will be used as a retention fund and, used to retain high performers and digitally-skilled employees who receive offers from competitors.
- TCS Q3 Attrition Rate – 7.6 percent
- Infosys Q3 Attrition Rate – 10 percent
- HCL Q3 Attrition Rate – 10.2 percent
- Wipro Q3 Attrition Rate – 11 percent
At end of the Q4, December 2020 quarter, Cognizant’s annual attrition rate was 19%, one of the highest amongst top IT leaders. However, the company’s overall attrition moved up just 1% compared to the previous quarter, there was a big spike involuntary attrition, employees leaving for other opportunities. This rose to 16%, from 10%.
Cognizant India, Chairman & MD Rajesh Nambiar explained to Times of India, “As we said on our latest earnings call, the market for skilled digital talent is intensely competitive, creating demand-supply imbalance for certain skills. In key digital areas, there are more open positions than qualified persons to fill those positions. We are therefore heavily focused on maintaining a competitive and appealing employee environment where every person is inspired to achieve, driven to perform, and rewarded for their contributions.”
He added, “a vital aspect of this is sustained investment in underscoring their employee value proposition, engaging high-performing talent, enhancing their pay-for-performance approach, and reinforcing the career path opportunities created by the company’s growing momentum.”
Cognizant has been undergoing major restructuring under CEO Brian Humphries, who joined in 2019. This restructuring includes doing away with some of the businesses.
Cognizant reported a 20 per cent drop in net profit to $316 million in the fourth quarter ended December 2020, against $395 million in the same period last year. The company follows a calendar year.
The company’s full-year net profit declined by 24 per cent to $1.39 billion against $1.84 billion last year while revenue remained flat at $16.65 billion against $16.78 billion last year.