Cognizant plans higher incentives, promotions in Oct-Dec quarter

Bengaluru, 30 October Cognizant Technology Solutions is planning a series of steps including announcement of sops in the October-December quarter to retain employees amid a war for talent in the IT industry.

The company, which has around 70 per cent of its employees operating out of India, clocked an attrition rate of 33 per cent during the September quarter. This is far higher than its peer group companies. While Tata Consultancy Services (TCS) reported an attrition of 11.9 per cent in July-September period, HCL Technologies had an attrition rate of 15.7 per cent. Infosys, Wipro and Tech Mahindra had more than 20 per cent attrition rates reported in the last quarter.

To stem such high employee churn, Cognizant is planning to give incentives to employees apart from merit-based promotions. Cognizant is planning to provide higher bonuses this year as compared to 2019 and will also implement targeted merit increases and promotions in the fourth quarter.

"In talent overall, in the talent management system, we're accruing bonuses at higher levels. We're getting back to merit-based promotions and raises," Brian Humphries, CEO of Cognizant has said during post-results analyst call.

"In the last six months, we have overhauled our talent management and annual performance evaluation processes, which allow us to develop a diverse, inclusive, and high-performance team," he added.

However, the company expects its attrition rate to go up on sequential basis. "We do expect voluntary attrition to pick up a little bit in the coming quarters as we go through the merit-based promotion and salary cycle we're going through," the CEO added.