Real challenge is closing the skills gap in many markets

‘Cost is not as big a challenge as the availability of talent’

There are no layoffs and we are hiring across all our practice areas

IT services firm Cognizant has reaffirmed that it would grow between 8 and 10% while indicating it will significantly ramp up its U.S.-based workforce. In an interview, Rajeev Mehta , president, Cognizant, spoke about hiring in the U.S., the voluntary separation programme, and the challenges faced by the company. Edited excerpts:

Is growing protectionism across the globe, including in the U.S., UK, Singapore and Australia a cause for concern to the industry?

We can only speak for ourselves. Given the shift to digital, there is increased need for co-location and co-innovation. We are focused on our clients’ needs, helping them make the shift toward digital enterprises. Our resourcing, employee mobility and financial model all underpin our strategy. In the U.S., for example, we are hiring more, expanding the number of our U.S. based delivery centres and driving innovative training programmes with colleges to help train the next generation of technology workers.

Access to the best global talent continues to be the key to increasing the competitiveness of these and other countries. The real concern is around the technology/STEM (science, technology,engineering, mathematics) worker skills gap there.

Which is the biggest challenge that is on your table now — the visa issue or changing business models?

None of them. Our investments over several years have positioned us well to enable clients to transform their business models, their operating models, and their technology models in tandem to deliver digital at scale. We’re expanding our solutions portfolio, deepening and broadening our digital skills under the guidance of chief digital officers in each of our industry and regional business units and enhancing our digital engagements with clients. The real challenge is closing the technology/STEM-worker skills gap in many of the markets we serve in order to help our clients transition from “doing digital” to “being digital”.

In your earnings call you have indicated at hiring more locals in the U.S.?

We hired 4,000 U.S. citizens and residents in 2016 alone. In 2017 and beyond, we expect to significantly ramp up our U.S.-based workforce by hiring experienced professionals in the open market and by making more use of university, veteran, and related programmes.

We are shifting our workforce largely in response to clients’ increasing need for co-innovation and co-location. While we will still seek visas for highly specialised and skilled talent, we’re reducing our dependence on these visas. In fact, during the most recent filing period, on April 1, we applied for less than half the number of visas we sought last year. And we expect to further reduce our need for these visas going forward.

As part of our shift, we continue to expand our U.S. delivery centres. A good example is our Tampa delivery centre, where we employ over 1,000 technology and business professionals.

They provide business process services, application services and testing for financial services and healthcare clients. At our centre, we’re employing a broad skill mix that includes long-time local residents as well as veterans and recruits from local colleges. At similar delivery centres around the country, we’ve expanded our retraining programmes and are working with local institutions to implement special curriculums that will help us meet growing client needs.

Today, we have over 20 U.S. delivery centres and we continue to expand this footprint. We are executing the shift to digital at scale by helping our clients simultaneously optimise their costs as they invest in the future. And we are shifting our workforce rapidly in the U.S. with more U.S. jobs and U.S. delivery centres.

Will local hiring impact your margins?

We have been ramping up our recruiting efforts in the U.S. for a number of years, so there is no material increase in recruiting costs. Increases in recruiting costs are partially offset by lower immigration-related costs such as visa and relocations fees. Cost isn’t as big a challenge as the availability of talent.

Cognizant has come up with a voluntary separation programme and you had also indicated trimming workforce...

While our voluntary separation programme for eligible leaders and changes resulting from performance management reviews are two distinct activities, they are both driven by the need to ensure we have the right expertise to meet client needs and achieve our business goals. They are consistent with the standard best practices followed by the industry for many years. Change and adaptation are the inevitable hallmarks of evolution. Cognizant’s is a story of reinvention, of sensing opportunities and preparing for client needs ahead of time. The pursuit now is accelerating our shift to digital by helping clients become technology-enabled across their businesses. In doing so, it is imperative that our workforce is appropriately aligned to deliver sustained, high-quality growth. I must point out there are no layoffs and we are also continuing to enhance our capabilities, hiring for roles across all our practice areas and expanding facilities globally.