Cognizant CEO Ravi Kumar revealed that over 3,00,000 employees can expect imminent salary hikes.
This announcement comes shortly after the resignation of Cognizant’s chief people officer, Rebecca Schmitt.
This marks the third round of salary hikes within the last 18 months, as part of the ‘two-merit cycles’ per year initiative announced by the company in November 2022.
Internal statement
In an internal communication, Ravi Kumar, expressed, “This week, the majority of our employees up to Associate Director level will receive their 2023 merit pay eLetters.
It’s worth noting that we have accelerated this merit increase by six months, aligning it with year-end performance reviews.”
This translates to some employees experiencing their third merit increase within the span of 18 months.”
The email continued, “In addition to the merit increases granted to eligible directors and above in January, Cognizant will be awarding over 300,000 associates with merit increases this year.
The initial cycle was implemented starting from October 2022.
Addressing attrition
According to Aditya Mishra, MD and CEO of CIEL HR, “Companies typically extend such generous measures to combat attrition.
However, the attrition rate in the Indian IT sector appears to be stabilizing after being relatively high.”
Cognizant has been making efforts to address the significant challenge of high attrition rates.
In Q4FY22, the attrition rate decreased from 35 percent to 25 percent, with involuntary attrition standing at 6 percent.
During the previous quarter, CFO Jan Siegmund informed analysts that Cognizant was heading towards becoming a more appealing employer, while also acknowledging that the dynamics of the labor market had undergone a shift.
TCS
In the meantime, Tata Consultancy Services (TCS), the largest IT services company in India and a significant competitor of Cognizant, has announced that it will provide annual increments to its employees effective from April, with top performers receiving a 12-15% increase.
Additionally, TCS has also revealed that it will provide 100% variable pay to all eligible employees for the fourth quarter of the year.
TCS’ chief human resources officer, Milind Lakkad, stated that the salary revisions would proceed as usual, with top performers receiving a 12-15% hike.
Furthermore, TCS intends to raise the base salaries of fresh campus recruits.
