Cognizant's slower growth not to impact pay hikes

T.E. Raja Simhan
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Mr Gordon Coburn.
Mr Gordon Coburn.

Employees of Cognizant Technology Solutions working at offshore locations, including India, will get an average salary increase of 8 per cent this year. This excludes promotions.

For onsite employees, it will be a ‘low single-digit' hike.

Despite the company's slow pace of growth expected this year, “there is no change in our plans,” said Mr Gordon J. Coburn, President, Cognizant, referring to the wage hike.

“Yes, we are certainly disappointed. We had to take our growth from 23 per cent down to 20 per cent but that is still tremendous growth. The change in full-year expectations has no impact whatsoever on our plans for salary increments,” he told analysts while discussing the company's first-quarter financial numbers.

Of the 140,000-plus employees of the US-based software major, the majority are in India.

The salary increment for the junior and middle-level employees will be effective this month and for more senior people at the end of the quarter. Those plans are unchanged. The magnitude of the salary increases will be consistent with what similar hikes by other top players in the industry, Mr Coburn said.

Will honour offers

On hiring, Mr Coburn said there was no change in plans. The company will honour all the offers it made to college graduates who are going to join this year.

Certainly, the pace of hiring will not be as fast and it will be adjusted for the revised guidance.

Visa challenge

“We will still add a lot of people and continue to do lateral hiring. But the pace of lateral hiring, obviously, will not be as fast as if we were growing at 23 per cent,” he said.

Referring to visa challenges, Mr Coburn said the company was doing more US hiring — both lateral and college hires. The company now recruits at 15-20 campuses and has hired several hundred US college students this year.

“The challenge is there are not enough US information technology workers. It's very simple math. We are not graduating enough. So we can certainly continue to supplement what we can find locally with talent from around the world. We continue to have access to visas. That access has not caused us any revenue leakage. Clearly, there's a very significant cost to it that's baked into our plans. We certainly monitor the situation carefully, but it has not impacted the business,” he said.

According to Mr Francisco D”Souza, CEO, Cognizant, one of the key focus areas for the company under its Horizon 3 will be the ‘SMAC stack'.

This is the new emerging corporate intellectual property stack based on social, mobile, analytics and cloud (SMAC).

3 banking clients

In the first quarter, Cognizant added three of its largest banking clients to the list of companies that consider the company their preferred mobile solutions provider.

One bank has also selected Cognizant as its preferred social computing provider after the software major developed a social media command centre to monitor what customers were saying about one of its subsidiary brands on the Internet, he said.

(This article was published on May 8, 2012)
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