Cognizant Technology Solutions Corporation has introduced quarterly promotions for junior employees and digital skill compensation programmes to help cut attrition even as more business restructuring could be on the cards next year.
Employee departures at the Teaneck, New Jersey-based company have exceeded 20% in the past three successive quarters and analysts had been concerned that a slew of cost-saving measures had cut too deep and that it was losing out on top talent.
Cognizant's chief people officer said all attrition was not the same and that the company has put measures in place to target groups of employees who might leave.
"For our junior employees, we have reintroduced quarterly promotions. That group wants to see upward mobility early in their careers. We've also created a number of niche-skill, digital compensation programmes where the market will support that," James Lennox, chief people officer, told analysts in New York last week.
Lennox said the goal of the digital compensation programme was to incentivise employees to build in-demand skills so that they could be deployed with clients and win more business. He said Cognizant had also started employee engagement programmes such as workplace flexibility and had enhanced time-off and health benefits.
IT companies such as Infosys and Cognizant have seen attrition creep up over the past few quarters and have said they are focused on ensuring that their 'high performers' do not leave. Cognizant follows the model of Indian IT service providers, with about seven out of 10 staffers in low-cost offshore locations such as India.
"When we look at the data for our high performers, attrition is 4-5 percentage points lower than our overall employee pool," Lennox said.
Cognizant, in particular, has faced employee pushback for a score of cost-cutting measures that were put in place to placate investors who demanded higher margins. Last year, about 400 senior executives accepted a voluntary retirement package and this year an additional 200 senior executives were shown the door.
The company's third-quarter results release said that there might be further realignment.
"We may incur additional realignment charges for the remainder of 2018 and in 2019. Our realignment initiatives are intended to further improve our cost structure primarily by optimising our resource pyramid," a note in the press release said.
Companies are hiring and retaining digital talent while reskilling the existing workforce.
"We think there could be more resource optimisation at IT services companies but these will be staggered across the next two years," an analyst with a Mumbai-based brokerage said, asking not to be identified. "We do not think it will be possible for all current IT service employees to be reskilled."