Cognizant to Hike Salaries in August, Delayed by Second Year: Will It Be Enough to Arrest Attrition?
Industry Insights From the Ground Up
In a world where tech giants are constantly evolving, the rise of remote work has become the new norm. As companies adapt to this new reality, salary hikes have become a crucial aspect of employee retention. In this article, we’ll delve into the latest news surrounding Cognizant’s salary hike plans and what it means for the future of the company.
Cognizant’s Recent Developments
In a recent town hall meeting at Cognizant’s refurbished Kolkata office, CEO S. Ravi Kumar announced that the company will be awarding salary hikes from August 1, following the usual pattern of bonuses being rolled out in March. According to the company’s internal memo, associates will receive eLetters with bonus details by the week of March 10. This information is crucial for employees to plan their financial goals for the upcoming year.
A Second Year of Delayed Hikes
This is not the first time Cognizant has delayed salary hikes. Last year, the company gave hikes ranging from 1% to 5% in August, but this year, the delay is significant. The question on everyone’s mind is, will this delay lead to a decrease in employee morale and potentially result in higher attrition rates?
Attracting and Retaining Talent
Cognizant faces stiff competition in the IT services sector, where attrition rates are notoriously high. In 2024, the company’s voluntary attrition rate rose to 15.9%, higher than its peers, including Tata Consultancy Services (13%), Infosys (13.7%), and HCL Technologies (13.2%). To arrest this trend, Kumar’s new policies aim to reduce redundancy and incentivize employees to stay with the company. However, some employees may still be wary of the company’s ability to deliver on its promises, considering the recent delays in salary hikes.
Cognizant’s Turnaround Story
Under Kumar’s leadership, Cognizant is undergoing a significant transformation. Despite a 1.98% growth in full-year revenue to $19.74 billion in 2024, the company’s business, excluding acquisitions, declined last year. The acquisition of Belcan and Thirdera, totaling $1.7 billion, contributed significantly to the growth. These deals, however, may not be enough to offset the company’s declining onshore business.
Conclusion
Cognizant’s decision to delay salary hikes for the second consecutive year raises concerns about employee morale and retention. While the company’s growth appears to be driven by acquisitions, the delay in salary hikes may ultimately impact its ability to attract and retain top talent. As the industry continues to evolve, Cognizant must adapt to stay ahead of the curve. Will the company’s new policies be enough to boost employee confidence and arrest attrition, or will it be too little, too late? Only time will tell.
Frequently Asked Questions
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Q: What is the exact date of the salary hike?
A: The salary hike will be effective from August 1. -
Q: How much is the bonus amount?
A: The bonus details will be sent to associates via eLetters by the week of March 10. - Q: Will Cognizant be able to retain top talent with its new policies?
A: Only time will tell, as the company’s ability to deliver on its promises will be put to the test.
Key Takeaways
- Cognizant will award salary hikes from August 1, with bonuses rolled out in March.
- The company’s voluntary attrition rate is higher than its peers, indicating a need for drastic changes.
- Cognizant’s growth is driven by acquisitions, but the company’s onshore business is declining.
- The company’s new policies aim to reduce redundancy and incentivize employees to stay, but some employees may be skeptical about the company’s ability to deliver on its promises.
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