A CASE

STUDY ON-
COGNIZANT TECHNOLOGY SOLUTIONS: RETAINING
EMPLOYEES AMID IMPEDING CRISIS

SAILEE SINGH BANKURA

Management, Leadership, &
Communication
Professor- Jonathan Powell

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 Introduction
Cognizant technology was started by Wijeyaraj (Kumar) Mahadeva as a spinof of Dun &
Bradstreet corporation. The company primarily focuses on four key Tech related areas namely;
Internet of things, Artificial intelligence, Digital engineering and Cloud. In the year 2019-2020 the
company decided to reframe its policies and planning to deal with the problems of Human
Resources planning, Performance, Finances, high attrition it was facing. But the unprecedented
Challenge of the pandemic caused by the Novel Corona virus further worsened these problems.

Main Challenges

• High attrition- Many employees of Cognizant technology were leaving their jobs
voluntarily. By the end of the first quarter of 2020, voluntary attrition was at 16 percent
which in last year was lower at 10%. This attrition rate further increased to 19% by the
end of year 2020. Attrition was a big problem for cognizant as its business model was
based on the billing hours put in by its employees. A reduction in number of employees
would at the end mean a reduction in revenue. In 2021 the situations became worse
because the voluntary attrition rate became even higher at 21%. According to some
news on Moneycontrol’s website, attrition rate at Cognizant had reached historic high
of 29%-31% at around July 28, 2021.

• Human resource planning- As the company was entering a comparatively new

market, the was no blueprint for certain human resource planning related areas such as

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 base salaries, Employee training, human resource allocation, how many employees
were required etc.

Causes of these problems

• Brian Humphries fit for growth plan- After becoming the CEO of the company,
Humphries decided to implement his idea called “fit for growth” under which Cognizant
will make optimizations to result in cost cutting and savings of around $500 million by
the end of 2020. Under this plan, cognizant would let go of around 12,000 employees
and then retrain and re-deploy additional 5,000 of its employees into diferent vacant
functional areas. All this caused a fear of job security in the employees and encouraged
them to move to other safer companies.

• Merit based promotion and salary hike system- This policy had caused most of
the company’s voluntary attrition because the employees were getting highly variable
pays and their promotions were merit based. This was causing employees to lose
interest and trust in company and leaving it for other opportunities.

• Increased demand of skillful employees at Cognizant- As cognizant was now

investing more in Digital transformation which in turn required certain skills which were
niche in nature causing a noticeable diference in demand and supply of specific skills at
the company, in turn causing bulk of attrition.

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 • Not much scope of growth in the company for employees- All the potential
or current employees who are at the bright side of skillsets, want to grow and make a
good use of their skills. But Cognizant having not much recognition makes it unfit for the
people who want to grow in a company.

• Covid pandemic- Many of the company’s attrition were also caused by the ongoing
covid pandemic in which people were very cautious of their health and families and
were choosing to resign than going to a job.

Solutions and Recommendations

• Better work environment for the employees- Cognizant needs the employees to
feel safe in the company from dismissal to encourage employee retention, more focused
Employees and talented employees wanted to stay in the company.

• Provide competitive salaries and benefits- Improving salary Hike policies will
help in employee retention. Also giving extra benefits to the employees will help. These
benefits may be such as- free coupons, food cards (such as Sodexo meal cards), free
health insurance for the employee, etc.

• Internal promotions and rewards- When there is a hope to get promoted in the
next fiscal year or to receive a gift for being the best performer, employees make more
eforts to be better at what they do and get such rewards. This in turn works in the Favor
of the company too. These rewards may contain a gift voucher, cash bonuses etc.

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 • Welcome constructive criticism- HR department of every company should take
feedbacks of its employees to better manage the employee-employer relationships.
Constructive criticism can prove to be helpful for a company.

• Hiring freshers- Hiring freshers directly from universities will greatly help the company
as freshers can be trained easily for a niche skill.

• Reducing the working hours- During the COVID lockdowns, Cognizant had
increased the working hours of employees from 8 hours to 9 hours per day. Recruiting
new employees will also reduce the work pressure from these employees and will make
them feel better about their job.

Conclusion

In the world of technology where there is cutthroat competition, Cognizant can improve its
reputation among Employees and potential employees by improving its policies, reducing work
pressure, giving rewards and benefits, improving work culture in the company, organizing events
and games for the employees, giving medical support for the employees amid covid crisis etc.

References

▫ A newsletter on Moneycontrol’s website talking about the record high attrition rate-

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 https://www.moneycontrol.com/news/business/cognizant-attrition-hits-record-high-of-31-company-to-make-
100000-lateral-hires-this-year-7244591.html

▫ Cognizant’s attrition rate of 33% to be the highest in IT history, newsletter dates oct 28, 2021

https://www.livemint.com/companies/news/cognizant-reports-attrition-rate-of-33-highest-in-it-services-industry-
11635420298965.html

▫ “Amid high attrition, Cognizant plans to hire 1,00,000 new employees” says a post on Business standard’s
website-

https://www.business-standard.com/article/companies/amid-high-attrition-rate-cognizant-plans-to-hire-100-000-
people-this-year-121072900729_1.html

▫ we are hiring 50,000 people in the company, higher than 33,000 freshers in the 2021 fiscal year. Says
Cognizant’s CMD Mr. Rajesh Nambiar in a conversation with Times Of India-

https://timesofindia.indiatimes.com/business/india-business/well-be-a-20-billion-company-in-2022-cognizant-
india-
cmd/articleshow/89338861.cms#:~:text=In%202022%2C%20we%20are%20hiring%2050%2C000%20people%20in
%20the%20company%2C%20higher%20than%2033%2C000%20freshers%20in%20the%202021%20fiscal

▫ A blog on indeed.com which talks about 11 strategies on how to increase employee satisfaction-

https://www.indeed.com/career-advice/career-development/how-to-improve-employee-satisfaction

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