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As lay-offs loom, IT sector attempts to over come aversion to unions

Recent employee lay-offs by major software companies, including Cognizant, Infosys, Tech Mahindra and Wipro, have yet again sparked a debate on the importance of unionisation to represent employees. Inexpensive labour Since 1990s, large IT vendors have already been winning customers by providing cheap labour to support their it requires on-site. However, with the advent of Cloud, while the impact of Software as-a-Service-based delivery and automation, demand for a lot of cheap labour has declined. While retraining of workers is the norm, those who could not cope had been dubbed non-performers and asked to go out of. The worst affected are mid-level management, sources said. Although the production sector and traditional industries have actually unions, the IT industry has resisted unionisation. There clearly was a well-structured grievance cell for employees to adhere to up any issue they might have, said the official of a top IT company, presenting his case against unionisation.

In May, the Tamil Nadu Labour and Employment Department clarified it employees are liberated to create trade unions and seek redressal of work-related problems. But workers are hesitant. “I am 35 years old. If I lose my work and indulge in union tasks, my opportunity to getting job an additional company will likely be slim,” said a TCS employee. Chennai-based Forum for this Employees (FITE), which claims to become run by IT professionals, says it offers been speaking for any welfare from it and ITeS employees for any past couple of years. The forum on said it will be forming a union tuesday. FITE claims to own users from around 50 IT/ITeS companies, including Accenture, Cognizant, HCL, IBM, Infosys, TCS and Wipro. The average annual employee attrition is finished 10 percent for all top IT companies, with 2-3 per cent of the being lay-offs for non-performance. Final November, L&T Infotech had recalled nearly 1,500 job offer letters. In January 2015, the FITE claimed that TCS had plans to lay off over 25,000 IT employees who'd 8-20 years of experience with the business. In March, over 6,000 employees or 2-3 per cent associated with total workforce at Cognizant faced lay-offs.Source -

The FITE has brought up this problem using the Tamil Nadu Labour Department, saying the company is forcing employees to resign within the name of bad performance. Nevertheless, Cognizant has refuted claims of forced resignation in meetings with the continuing State Labour Department. ‘Voluntary observance’ S Subramanyam, CEO of Ascent HR, a recruitment firm, said a few industries, including IT, retail and healthcare, have proved that voluntary observance of recommendations has facilitated a better industrial relationship between employers and employees, and in addition have served economic and social objectives. Subramanya Sirish Tamvada, Dean, IFIM Law university, Bengaluru, said sometimes ongoing companies want to retrench their workforce to cut expenses. “We should be cautious inside our approach and determine whether you will find genuine reasons behind corporate actions.” he said. He stated trade unions will take a better position to negotiate on behalf of employees. “I wish to know exactly what the us government is performing to combat the specific situation?” he asked.

For about a decade now, there has been a steady decoupling between the revenue of IT companies and the size of their workforce, implying that simply adding more heads won’t help generate more income. As the industry now pivots towards delivering high-end services, the focus for IT companies will also shift from adding scale to building a smaller, more specialised talent pool with specific domain expertise. In all, Nasscom reckons that layoffs at individual companies, as part of annual performance appraisal process, will be in the range of between 0.5% to 3% of the overall workforce. And despite persistent talk of mass firings, industry leaders assert that they aren’t overtly enthusiastic about letting go of trained staff, especially as projects become more complex. “I promise you, the industry doesn’t want to lose people who are experienced,” said CP Gurnani, CEO of Tech Mahindra, India’s fifth largest IT services company. India’s IT companies must also contend with lack of quality within the country’s engineering talent pool. Back in 2011, Nasscom estimated that only about 25% of India’s engineering graduates were readily employable, and things haven’t got much better since. On an average, the industry currently spends between nine and 12 months to train new recruits and bring them up to par, explained Nasscom’s chairman Raman Roy, also the CEO of outsourcing services firm, Quatrro. As the need for newer skills increase, ensuring that Indian IT companies have a big enough talent pool to tap into for entry-level engineers will be a challenge. “Right now, we are able to meet the needs of the customer. At $154 billion (in revenues), we are able to meet the needs,” said Roy. “As we go to $350 billion (by 2025), will we have enough people? I think that is a very serious concern.” MOST POPULAR

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