We have learnt to live with attrition: Rajesh Nambiar of Cognizant India

In a Q&A, the company's CMD also dwells on retention mechanisms and growth drivers in a firm that beat Q3CY21 estimates despite 33% attrition

Even though Nasdaq-listed Cognizant reported an attrition of 33 per cent, the company managed to beat estimates in its Q3CY21. CEO Brian Humphries yet again said in the analyst call, that the company does not have enough headcount to fulfill its potential. India, which is the largest talent pool of the company, continues to see record hiring. In an interview, Rajesh Nambiar, CMD, Cognizant India & President Digital Business & Technology talks with Shivani Shinde on attrition, retention mechanisms and the growth drivers. Edited excerpts:

Q3 numbers of Cognizant were strong, one of the element was also the growth in non-digital businesses, which even CEO Humphries said was unexpected. Can you elaborate more on the growth drivers in the non-digital segment?

I believe this quarter is a testimony to the capability that we have and the hard work of all the people. Overall a great story. I'm really grateful to our teams around the world, and including India for truly meeting our commitment to clients despite the challenging labor market.

First of all, digital revenue grew 18% in Q3. That's fantastic growth for us. We do call out four broad digital battleground segments-- digital engineering, cloud, data and then IoT. We have really beaten well.

The growth in our non-digital business is one of the reasons why the percentage of digital business still remains at the 44 per cent level. Again like digital, non-digital business has also seen tremendous uptick, for instance, our BPO business is growing three times the industry rate. Our offerings such as BPaaS in healthcare, Cognizant Neuro, our testing portfolio, ADM portfolio have all done very well.

This quarter, growth is well balanced between digital and non-digital.

Your growth in the non-US market was in double digit. Whereas the US is in single digits, is that the focus on expanding into other markets?

Our US business grew by 9.7%. Yes, Europe grew 16.9% and rest of the world grew by 22%. One of our strategic priorities is to globalize Cognizant, which means that we need to increase the share of revenue from the global growth markets. Today that is about 25% of our revenue, I think it will go up significantly in the days ahead. It is not coming at the cost of growth from North America. We have ramped up our presence in geographies like Australia, New Zealand, we have a new leader in India as well.

But attrition continues to be high even as the company makes record hiring. What are the measures you are putting in place to reduce this going ahead?

Attrition is an industry wide concern. Despite these attrition numbers, we have had solid operating growth. Our bookings are at a healthy 24 per cent year-on-year, our total headcount has grown by 17,000 in one quarter. Our total employee base is 318,000. Same quarter last year we were at 283,000, we are perhaps the only company in the world to have added such a high number of people in a year.

Our hiring engine is at its absolute best. In terms of what we are doing to mitigate some of the potential downside which comes through some of the high elevated attrition, we have been able to balance it by bringing in the right level of talent to the organisation ensuring that we have a solid training program in place. We are ensuring that we are able to relook at our leadership with a good mix of internally promoted talent and lateral hires ensuring that we are able to balance the broader portfolio.

To make sure that we get freshers an early start we start engaging with campuses a lot earlier than many of our peers. We also added many through our internship programmes, so that for many the time from training to being billable is reduced. We have also tied up with colleges where we also provide curriculum in the last semester so that our hiring is much more targeted.

We do agree that we need to pay competitively and compensation is crucial but it is not the only lever, increasing engagement with employees is very crucial. So when we tried to understand why people are leaving, and one of the reasons was higher education, we not only trained 100,000 people in new digital capabilities but also introduced the higher education program. Where associates can get higher degrees. So we have tied up with institutes like IITs and BITS Pilani so that they can pursue a higher degree.

Cognizant has invested $3 billion in acquisitions, can you elaborate the capabilities that the company has managed to build?

Over the last three years we have invested about $3 billion in acquisition. One of our strategic priorities is “accelerating digital” and we are doing exactly that by sharpening our ability to support clients as they transform into software-driven enterprises. In this year alone we have acquired six companies.

These acquisitions though add capability to Cognizant’s offerings we also get access to key talent and they actually help us, in terms of positioning us much better. One of the reasons, I believe that we are much better placed to navigate the digital world is because we have acquired these companies.

Yes, they also bring on board experts consultants advising capabilities and you know we are through to have a work.

Assuming the supply side constraints continue, do you think it will impact growth in future?

We have learnt to live with it (attrition). Just to give this quarter as an example, while the industry is facing unprecedented competition for talent, and while we have been facing a high level of attrition, it is also a fact that we have managed to attract industry leading talent to join us. We have grown as a company with double digit revenue growth, we have done well on margins too. If you look at the guidance we have given for the full year, it’s one of the highest ever, we have this huge forward momentum both in revenue, bookings, and global growth. We have a solid story going on.