While surpassing its Indian peers in both revenue and profitability growth in the September quarter, Cognizant Technology Solutions lagged behind them by a huge margin in net employee addition.

The US-based company, which has a large number of employees in India, has consistently been the top hirer. However, better employee utilisation saw the firm report its lowest net addition number in two years.

The slow growth in net headcount was not driven by attrition but by a conscious decision to improve operational excellence and take employee utilisation up; this, the company successfully did while maintaining customer satisfaction, said Gordon James Coburn, President, Cognizant, “We are largely done with that process and are at the utilisation levels that we want as we go into 2016. We still have a little bit of room offshore on utilisation, which you might see in the December quarter. But then it starts to level out over that,” he told analysts. Utilisation refers to the proportion of employees in the workforce being billed for their time and contribution. It is an important metric of operational excellence in a company.

Cognizant said the net employee addition during the quarter was 1,300, with the previous lowest number being 1,600 employees in September 2013. In comparison, the top three companies reported net a employee addition of over 5,000 each. Tata Consultancy Services led the pack with a net addition of 10,685.

In 2014 and the first quarter of 2015, Cognizant hired aggressively and undertook workforce retraining to ensure it would be ahead of others in having the right skills and resources to meet the growing client demand for digital transformation. Those investments, the firm says, have positioned it to capitalise on the changing demand environment.

Related Topics
comment COMMENT NOW