Tech in Turmoil: Talent disruption in India’s IT Sector and the ‘M’ word. The IT services sector is going through a significant talent disruption as a result of high attrition rates, employees who are unwilling to return to their offices, and a wider focus on issues like moonlighting.
Software engineer Amit Anand (name changed upon request) left his well-paying position at a large IT company in Bengaluru in September. His decision was influenced, among other things, by increased work demands, a lack of career advancement, and the high cost of living in a big city. Anand put in almost 18 hours a day at work to meet his goals, but he occasionally burned out.
Furthermore, Gurugram-based After beginning to work from home (WFH) during the Covid-19 pandemic, Jasmine Gerald (name changed upon request), gradually grew disinterested in her position as an IT analyst. She started making cakes and sharing recipes on Instagram during her downtime at home. Her fame and wealth spread quickly as a result.
Her three-hour daily commute from her Noida home to her job at a technology start-up in Gurugram was cut in half over the previous two years due to flexibility. She refuses to spend time and also money on commuting, again which costs more than Rs 20,000 per month, as the office switches back to the hybrid model. In addition to dealing with emotional instability, the repetitive nature of a data analyst’s job adds to the stress of working nonstop.
Veda Sriman, 30, of Hyderabad (name changed upon request), believes that there are other important factors that contribute to her career growth in addition to job satisfaction and passion. She faithfully logs on to her remote 9–5 job as the product manager at an IT company every day. But after 5 o’clock, she shifts to her next skill, graphic design, working an additional three to four hours per day and bringing in extra money.
The information technology (IT) services sector in India is currently experiencing talent disruption in all three of the aforementioned ways. Employees embraced remote work in an instant over the past two years, with many of them multitasking, taking on freelance work, or working for rival companies. 90% of executives worked from home during the pandemic, so location was no longer a significant factor in hiring decisions for employers.
In turn, this is causing a “technological upheaval” in the industry, as evidenced by high attrition rates, employees who are unwilling to return to their jobs, and a delay in the onboarding of new hires. Revolutionary terms like “moonlighting,” “silent sacking,” “restructuring,” and “quiet quitting” are in the spotlight.
Following the pandemic, the super cycle of digitalization began, opening up enormous opportunities for tech talent across all industries, not just IT. In fact, as every organization began the process of digitalization to remain relevant, hiring for tech talent in non-tech sectors recently saw a growth of more than 100%.
As more global capability centers (GCCs) establish bases in India in search of qualified talent, according to Sunil Chemmankotil, also CEO of TeamLease Digital, a mere technology professional services platform for the professionals in IT, telecom, then healthcare, and engineering, the demand for tech talent has increased significantly. As of 2022, there will be about 1,400 GCCs.
“Even though funding has become more scarce in the startup ecosystem, many of them still think this sector can advance their goals of creating wealth and help them seize those opportunities. “Employees are being offered better comparables and employee value propositions as a result of the huge gap between demand and supply caused by resilient IT services, growing GCC base,then increasing use of technology in non-tech companies, and the startup ecosystem,” he believes.
What is the issue with Tech?
Most professionals now seek financial stability by working multiple jobs, upskilling, or pursuing their passions as a result of rising living expenses. Cities like Bengaluru and Gurugram, which are experiencing significant civic stress, are home to the majority of IT companies.
In addition to being crowded and having expensive rentals, there are serious infrastructure problems. A severe lack of civic maintenance and planning has caused many tech workers to suffer almost daily. Most businesses and employees find it challenging because commuters spend at least 2-3 hours getting to and from work and deal with problems like waterlogging, traffic, and poor road conditions.
The IT industry is a currently rapidly growing industry with a young labor force; whether in a start-up or an MNC, it frequently hires more people. The $227 billion IT industry now employs more than 5 million people, making it the largest employer in the nation.
Another factor might be a slight increase in the salaries of new hires. According to recent news reports, IT companies like Wipro, then Tech Mahindra, Capgemini, Accenture, HCL, and Infosys are to blame for the recent delay or cancellation of job offers to freshmen. For the June quarter, or Q1 FY23, Infosys reportedly cut variable pay-outs to about 70%.
The “work from anywhere” model, meanwhile, made it difficult for many businesses to maintain employee engagement. NASSCOM National SME Council member and the Gujarat NASSCOM SME Chairperson Maulik Bhansali believes that as a person’s sense of belonging to an organization wanes, they start to look for other opportunities, much like freelancers.
“The IT sector is currently facing a significant challenge. Even with hybrid operating models, the majority of workers are still reluctant to report to the office. Companies need to create a hybrid business model that takes into account amenities, culture, client needs, diversity and inclusion, and employee engagement. A culture of continuous learning is facilitated by employee skill development and training, he continues.
For new-age businesses and heavily funded start-ups, the sudden urgency and push toward digital transformation also produced an imbalance in the demand-supply function, particularly for skilled tech talent.
According to Shrijay Sheth, founder of business solutions provider Legalwiz.in, “Slowing demand due to potential global economic slowdown and start-up funding getting more modest will also help the companies build employee loyalties on the mere grounds of job security, positive working environments, and professional different growth opportunities—beyond just then competing for better financial offers.”
The letter “M”
The topic of “moonlighting” has been in the news recently. After Wipro CEO Rishad Premji compared it to cheating, it attracted more attention. Many other businesses have voiced their concerns as well, and some of them have even fired employees for working second jobs.
Wipro recently let go 300 workers for working second jobs. Additionally, it has announced that offices will be open four days a week, with employees required to physically attend work at least three days per week. This was done in an effort to adopt a flexible strategy that would enable teams to experiment and create lasting relationships at work.
The IT minister for Karnataka, CN Ashwath Narayan, urged those who moonlight to leave the state, claiming that working for clients after hours is “literally cheating.”
IBM, a major player in IT and technology, also issued a firm message to its staff regarding side jobs. “A second job could be full time, also part time, or the contractual in the nature, but at its core is a mere failure to comply with more employment obligations and also a potential conflict of interest with IBM’s interests,” wrote Sandip Patel, head of IBM’s operations in India and South Asia, in a note to staff.
A TCS spokesperson told FE about a very long-term commitment towards employees, and the employees have a good reciprocal commitment,then calling moonlighting an ethical issue and also against the mere core values and culture of the company. “In order to prevent moonlighting, we constantly promote a positive message and interact with employees to encourage learning and career development. We are investigating more contemporary work arrangements like flextime, gigs, and talent clouds.
However, in India, the term “moonlighting” is not even officially recognized. Organizations are focusing on employee reorientation, emphasizing the exclusivity of their services throughout their mere employment tenure while also then proposing clarifying changes to the current appointment terms, according to Anshul Prakash, partner, employment, labor, and benefits, Khaitan & Co.
According to him, policies have been considered that would outline the process by which an employee could pursue other business interests with the employer’s consent if those interests did not conflict with the exclusivity of their services.
TV Former Infosys board member and HR executive Mohandas Pai believes that IT companies can approach problems like moonlighting in two different ways. First, they need to have very specific rules defining what counts as moonlighting and what does not. For instance, someone who works on a hobby or an NGO after hours is not moonlighting.
Second, freshmen’s salaries need to be raised. In the last ten years, freshmen’s salaries have remained unchanged while those of senior-level employees have increased by a factor of five, Pai recently told FE.
However, not everyone has been against working a second job. Rajeev Chandrasekhar, who is the union minister of state for the skill development and for entrepreneurship, electronics, and information, had earlier stated, “So, the efforts of companies that also want to pin their employees down and then say that you should not also work on your own start-up are also doomed to fail.” He was referring to young workers’ desire to monetise their mere skills and develop financial stability.
Additionally, earlier in the day, Tech Mahindra CEO CP Gurnani tweeted, “My thoughts on the trending ‘M word’… As always, I welcome any disruption to the ways we work because we must adapt to the times.
Employers are required to do what?
Employers must have clear policies that are monitored and enforced regarding what behaviors are acceptable and prohibited. “Under the Shop Act of some states, then dual employment is restricted, and also a voluntary go-slow or then neglect of work can be treated as misconduct that is a ground for termination,” says Akshay Sachthey, associate partner at the law firm Phoenix Legal.
IT companies have occasionally been treated like factories where employees are prohibited from holding two jobs at once. These rules do not, however, apply to everyone.
According to the results of the Randstad Employee Brand Research this year, 85% of employees are likely to stick with companies that provide opportunities for retraining or upskilling. “Creating a workforce that is engaged and future-proofed by relevant skilling opportunities is the best way to keep talent.
According to Sanjay Shetty, director of professional search & selection and strategic accounts at Randstad India, it is crucial to create a flexible organizational structure for working hours and hierarchy with a focus on employee wellness.
To attract the millennial workforce, organizations must place a higher value on skills than on location. “Make employee experience centered on learning and growth. The founder of TalentOnLease, a company that provides IT talent on demand, Daya Prakash, was quoted in a FE report as saying that a geographically dispersed workforce enables the business to hire the most qualified candidates and expand into new regions.
“We already notice companies being more mindful of hiring, investors being more ROI-focused, and the hiring process changing from batch hiring and keeping what works to need-based and vetted talent. Even employees are looking for jobs with more stability, but employers have realized the importance of building their employer brands to succeed in challenging times,” adds Sheth of Legawiz.in.
Experts also observe a sharp decline in workplace morale that causes workers to leave their jobs, retire, and change careers. According to Bhansali of NASSCOM, institutional culture and employee engagement are the most important factors in employee retention. “Even with generous pay checks, a great work environment, facilities, and infrastructure, retention becomes difficult if employee engagement and culture are lacking,” claims Bhansali.
In this regard, Nancy Hauge, chief people experience officer of global software company Automation Anywhere, asserts that keeping top talent on board is essential for ensuring that a company’s culture and growth promote employee satisfaction. The focus is shifted from tedious to value-added work when low-value, manual, and repetitive tasks are automated, allowing employees to move on to the next big idea. We use work-life balance strategies like a “no meeting Friday” rule and a “stress-free day” once every three months, she says.
Hiring and Firing
As global economic growth slows down as a result of higher interest rates, rising inflation, and an energy crisis in Europe, several tech companies have reduced employment and reduced hiring in recent months.
While the parent company of Facebook, Meta, claims that it has halted hiring and plans to “restructure” the company as recessionary fears mount, Indian edtech giant Byju’s has announced that it will lay off about 2,500 of its 50,000 workers as it works to become profitable this fiscal year.
After making a similar announcement last year, online mortgage lender Better.com announced mass layoffs this year. According to a September report by The Wall Street Journal, Google has asked hundreds of employees to reapply for positions within their organizations, using restructuring as a cover for quietly terminating them without disclosing mass layoffs.
While Microsoft announced plans to lay off 1,000 employees across multiple divisions in October, Apple cut over 100 contractor roles from its recruitment arm across several regions in August.
According to a KPMG survey titled 2022 CEO Outlook, 46% of CEOs are considering job cuts over the next six months, while 39% have already frozen hiring. Among other important industry sectors, the survey covered the technology and telecommunications sectors.
The Naukri JobSpeak index reached 3103 in September, and hiring activity registered double-digit growth of 13% year over year and 10% sequentially, according to a Naukri JobSpeak report. However, there was a 6% y-o-y decline in hiring in the IT sector in September compared to the same month last year.
According to a report by the TeamLease Digital, the Indian IT sector has grown by 15.5% over the past ten years and added 5.5 lakh jobs in FY22.
Towards the future
The pandemic presented a challenge for remote work and gradually shifted businesses to new work models. According to experts, this will continue for the foreseeable future. But for it to function, new systems, infrastructure, and mindsets are also necessary. As a result, HR would have proactive, strategic, and all-encompassing roles and responsibilities for employee retention, engagement, work-life balance, and an inclusive workplace culture.
Over 30% of Indian workers say they are very likely to switch to a new employer, according to PwC’s India Workforce Hopes and Fears Survey 2022. More than 80% of people think their jobs can be performed remotely. A whopping 71% of workers worry about being passed over for promotion. Up to 54% of workers strongly or somewhat agree that India lacks certain skill sets.
“The disruptive landscape of social, environmental, economic, and geopolitical changes have had profound consequences on organizations and their workforce strategies,” says Chaitali Mukherjee, partner and leader, people and organizations, PwC India. When creating their short- and long-term plans for the organization and its members, leaders must take these disruptions into account.
According to Pranav Pandya, chairman and director of GESIA IT Association, which represents Gujarat’s IT industry, young minds lack the maturity and patience to carefully consider their decisions, which creates an unsettling situation in which impulsive decisions are made based on instantaneous attraction to larger IT entities. In addition to the traditional duties of hiring, onboarding, engaging, and managing client relationships, he says, “HR now means a full-time activity of human relationship.”
The pandemic has hastened digital transformation across industries, putting many jobs in jeopardy and shortening the useful life of skills. Companies now place a high priority on skill development across all job roles. “Industry 4.0 depends on both processes and technologies.
Data is essential to decision-making, so digital skills have taken center stage. New graduates must possess modern skills for in-demand jobs, and working tech professionals must continually upskill to stay relevant if India is to take advantage of the trillion-dollar digital opportunity and realize the potential of its demographic dividend, adds Raghav Gupta, MD of India and APAC for Coursera, a global online learning platform.
As it enables them to capitalize on the expertise of their current workforce, offer growth opportunities to existing talent, maintain organizational culture, and control costs, many organizations are also prioritizing upskilling over frenzied hiring.
According to Bimaljeet Singh Bhasin, president – enterprise business India, NIIT, “upskilling employees not only enhances their productivity, but also provides the employees with opportunities to work on modern applications and technologies —which helps in overall employee engagement and continuity.”
Except for IT companies, India Inc. resumes operations without incident.
The rest of India Inc. has experienced a relatively smooth transition, in contrast to information technology companies where bringing employees back to the office has turned into a highly emotive issue.
Employees at corporate offices of businesses in the variety of industries, including telecom, automotive, FMCG, steel, cement, and others, either report to work on all scheduled days or two to three days per week, and depending on the company policy. Employees FE spoke to claimed that there isn’t really a problem with the situation and that they simply rely on the options their employers offer.
Employees, for instance, have long come to work every day of the workweek at the corporate offices of the Maruti, and Hyundai Motor India, Mahindra & Mahindra, and Hero MotoCorp. Since last October, we have attended work five days a week. Early this year, during the third Covid wave, Maruti switched to a work-from-home policy; however, as soon as it subsided, everyone returned to regularly attending work, according to an employee.
According to a Hyundai employee, “Offices are operating normally, and everyone comes in on a regular basis with the new exception of those who report sick.”
However, some businesses, like RPG Enterprises, have a flexible strategy. “Those who physically must be there, such as shop floor employees or security/facilities personnel, must report to work each day. S Venkatesh, group president (HR), RPG Enterprises, stated that being in front of customers rather than working in an office is crucial for roles that involve dealing with customers.
Reliance Industries, the companies in its group, and Bharti Airtel have all adopted flexible business models. RIL requires employees to come in twice a week, whereas Bharti bases attendance on need. The HR department and management’s decisions, according to the employees, are fully upheld by them. The majority of the workers in these companies stated, “Today, we are asked to come twice a week, but if tomorrow we are asked to come all the five days, it’s not going to be an issue.
Retail and FMCG companies use various iterations of hybrid working. Hindustan Unilever (HUL), the largest FMCG company in the nation, is unlikely to completely return to the office-based work model, but organizations like Godrej Consumer Products (GCPL) are believed to work three days a week in an office setting and the other two days from home.
In December 2020, Tata Steel implemented the agile working model policy, which divided job positions into two categories: absolute work from home and flexi work from home, allowing officers who must be based out of a specific location to work from home for an unlimited number of days annually.
“We have noticed a rise in the number of employees visiting offices as a result of the better pandemic situation on the ground. However, based on organizational needs, the employees continue to have flexibility. A daily average of 10-15% of employees work from home. According to a company spokesperson, more than 50% of the workforce in departments like IT and procurement are operating entirely without breaks.
HR experts claim that Indian businesses are still attempting to strike a balance between 100% in-office work and flexibility. “There are some companies who have said that coming to the office is mandatory…period,” said Nishith Mohanty, a partner at Korn Ferry. There are numerous variations of that, but there are businesses that support the hybrid model and they are the ones currently experimenting and locating the equilibrium.
According to Mohanty, the future of work in India will also be “a lot closer to the old model,” but acceptance of remote work and work from anywhere will undoubtedly rise.
