Cognizant’s Employee Attrition: A Case Study Analysis
Over the past few years, Cognizant Technology Solutions, which is a frontrunner in the global IT services sector, has continually faced challenges associated with employee attrition becuase of the high employee turnover. Knowing the settlement for such a turnover is crucial for the stakeholders, the industry experts, and even the company itself as they plan for globalization.
Previous Timeline Context of Attrition Rates
Cognizant made headlines with their voluntary attrition rate soaring to 33% in 2021, which was a record high for the IT services sector. As alarming as this number sounds by itself, it did the company even greater damage in terms of market reputation, raising red flags on their internal workings and indeed their talent retention capabilities.
THE CASE CENTRE
Company Noticeable Trends And Information
To address the issue previously mentioned, the firm has certainly made steps and strides towards improvement as well. From the end of 2022, voluntary attrition stood at 13.8, which is phenomenal reenactment when compared to the last year. Instead, 2024 twelfth quarter did see a rise to 15.9%, showing an alarming upward trend after showing zero positive results. While the rest of the Indian IT firms also showed increased attrition rates in recent quarters, this was still surprising.
Reasons Behind Employee Turnover Rate
A number of factors have contributed to employee turnover rates at Cognizant:
IT Employment Opportunity Sector: The surge in the need for IT experts has led to the creation of a competitive job market which subsequently has resulted in high attrition rates in the field as people progress into higher roles.
Impact of Change: The new internal change that Cognizant made in order to save money and align with the overall corporate strategy has had a negative effect on the staff.
Delayed Compensation Adjustments: The postponement of annual pay increases until August 1, 2024 has likely contributed to the chronic discontent of employees and their subsequent exit.
BUSINESS STANDARD
Measures to Reduce Employee Turnover
With these issues in mind, Cognizant has executed a couple of initiatives:
Re-Hiring of Previous Employees: The firm has managed to win back the loyalty of previously departed employees, who so far number 13,000 in the year 2024, with some 10,000 more indicating willingness to come back.
Employee Upgrading Systems: Build programs that provide greater satisfaction and prospects for advancement to the employees in order to reduce the drop rate.
NextGen Program: This program centers on streamlining the operating model, improving business functions, and readjusting offices to improve efficiency while making them more employee-friendly.
Comparative Industry Perspective
Like Cognizant, other companies are struggling but a competitor- Accenture- is experiencing growth as they hired an additional 24,697 people during the December quarter of fiscal year 2024. This demonstrates the differing approaches and results of the IT services sector.
BUSINESS STANDARD
Conclusion
The high rates of attrition broadens the scope of concern for Cognizant. The steps the company has been taking such as trying to bring back old employees and developing new talent show they care. The latter approach will no doubt increase employee morale and self esteem, but applying these measures within the IT sector will ultimately determine if shifts in strategy will be effective or not.
Cognizant’s lower attrition rates in recent times have to do with a clear strategy that seems to have worked.\”
What was the highest recorded Cognizant’s attrition rate?
According to the data, Cognizant has a record voluntary attrition rate of 33% in 2021 which was towards the top of the IT service industries at that moment.
How do you pronounce The Case Centre?
M H Pawar served as a Vice President at Cognizant and retained 31% in gratified voluntary attrition to show that attrition cripples the company.
BUSINESS STANDARD
In 2023, the number dropped to 13.8% but increased slightly to 15.9% by Q1 2024.
In regards to the question on speed, I say 30% is reasonable.
What strategies did the company take to counter the high rate of attrition?
Cognizant adopted a strategy of rehiring its professionals along with strong investment in Talent Development programs and implementing the NextGen program put on focus all to enhance operational efficiencies and employee satisfaction.
How does Cognizant’s attrition rate compares to those of other firms in the industry?
Cognizant used to struggle with high attrition rates, but recent reports indicate improvements. Other companies like Accenture have shown growth in terms of head counts, which suggests that there is a range of results within the sector.
What does the NextGen program entail?
The NextGen program is an initiative by Cognizant aimed at making changes to its operating model by streamlining it, enhancing the efficiency of corporate functions, and repurposing office space to foster greater productivity and employee satisfaction.
What was the reason behind Cognizant marketing policy of annual salary hikes in 2024?
Cognizant has decided to withhold annual salary hikes until August 1, 2024, as part of its strategies, which is likely to have lowered their employee satisfaction and attrition rates.
Note: This article is based on information available as of February 9, 2025. Please check official communications from Cognizant and other credible partners for the latest updates and changes..