Tech in turmoil: Talent disruption in India’s IT sector and the ‘M’ word | The Financial Express

Tech in turmoil: Talent disruption in India’s IT sector and the ‘M’ word

With high attrition rates, employees unwilling to return to offices and a wider focus on issues like moonlighting, the IT services industry is experiencing a major talent disruption

Tech in turmoil: Talent disruption in India’s IT sector and the ‘M’ word
Several other companies have also raised their concern, with a few of them even sacking employees for moonlighting.

In September, software engineer Amit Anand (name changed on request) quit his high-paying job at a global IT firm in Bengaluru. Some of the reasons for his decision were increased work pressure, lack of career advancement and high costs of living in a cosmopolitan city, among others. Anand worked almost 18 hours a day to achieve his work targets, only to experience burnout every now and then.

Similarly, Gurugram-based Jasmine Gerald (name changed on request), who started working from home (WFH) during the Covid-19 pandemic, gradually lost interest in her job as an IT analyst. During her free time at home, she started baking cakes and posting recipes on Instagram. This got her instant fame and money. The last two years were flexible and saved her three hours of daily commute from her Noida home to her workplace, a technology start-up in Gurugram. Now when the office is getting back to the hybrid model, she refuses to spend time and money on commuting, which comes to over Rs 20,000 a month. The monotonous routine of a data analyst is also adding to the stress of constantly being on the job, apart from struggling with emotional instability.

Meanwhile, for 30-year-old Veda Sriman (name changed on request) in Hyderabad, job satisfaction and passion are not the only key factors in her career growth. Every day, she diligently logs on to her remote 9-5 job as a product manager at an IT firm. But after 5 pm, she switches to her next skill, which is graphic designing, working another three-four hours a day and earning an additional income.

All the above three are examples of the current talent disruption in India’s information technology (IT) services sector. In the last two years, remote working became an instant hit among employees, with many of them multi-tasking, taking up freelance jobs or working for competitors. For employers, geography was no more a major hiring criterion, with 90% of executives working from home during the pandemic.

Also Read: Barring IT firms, India Inc moves back to office with no fuss

This is, in turn, leading to a ‘technological upheaval’ in the sector in the form of high attrition rates, employees unwilling to return to their workplaces and delayed onboarding of freshers. The spotlight is on revolutionary terms like ‘moonlighting’, ‘silent sacking’, ‘restructuring’ or ‘quiet quitting’.

After the pandemic, the super cycle of digitalisation kicked in and created huge opportunities for tech talent, not just in IT but in other sectors as well. In fact, hiring for tech talent in non-tech sectors saw more than 100% growth in recent times, as every organisation embarked on the digitalisation process to remain relevant.

Sunil Chemmankotil, CEO of TeamLease Digital, a technology professional services platform for professionals in IT, telecom, healthcare, and engineering, feels the demand for tech talent has seen a huge uptake in the global capability centres (GCCs, approximately 1,400, as of 2022) as more are setting base in India in search of quality talent.

“While there has been a tightening of funds in the start-up ecosystem, many of them believe that this segment can fast forward their wealth creation ambitions and hence pick up those opportunities. Resilient IT services, growing GCC base, increasing use of technology in non-tech companies and the start-up ecosystem have created a huge gap between demand and supply, which is leading to employees being offered better comparables and employee value propositions,” he feels.

Where is the problem?
The rising costs of living have made most professionals look for financial stability by either doing more than one job, upskilling, or pursuing a passion. Most IT companies are situated in cities like Bengaluru and Gurugram, which are dealing with major civic stress. Besides being cramped and high on rentals, there are major infrastructure issues. Acute absence of planning and civic maintenance have made many tech employees suffer almost every day. They commute for a minimum of 2-3 hours and face issues such as waterlogging, traffic jams and bad road conditions, making it a challenge for most companies and employees.

Also Read: Most techies won’t return to IT sector, says new study

The IT sector is a fast-developing sector of a young workforce; it often adds to an increased number of employees—be it in a start-up or an MNC. Currently, more than 5 million people are working in the $227-billion IT industry, becoming the biggest employment generator in the country.

A marginal increase in salaries of freshers may be another reason. Recent news reports state that IT firms like Wipro, Tech Mahindra, Capgemini, Accenture, HCL and Infosys have been blamed for delaying or cancelling job offers to freshers in the past few months. Reportedly, Infosys had reduced variable pay-outs for the June quarter or Q1 FY23 to about 70%.

Meanwhile, the ‘work from anywhere’ model challenged many businesses to keep up with employee engagement. Maulik Bhansali, NASSCOM National SME Council member and Gujarat NASSCOM SME chairperson, feels the sense of belongingness towards an organisation lessens, resulting in people looking for other opportunities, much like freelancers. “This is a big challenge that the IT industry is facing. Most employees are still unwilling to come to the office to work even with hybrid operating models. Businesses must build a hybrid model which encompasses amenities, culture, client requirements, diversity and inclusion, and employee engagement. Employee skilling and training help create a culture of continuous learning,” he adds.

The sudden urgency and push for digital transformation for the new-age businesses and heavily funded start-ups also created an imbalance in demand-supply function, especially for skilled tech talent. “Slowing demand due to possible slowdown in global economies and start-up funding getting more modest will help the companies build employee loyalties on the grounds of job security, positive working environment and professional growth opportunities—beyond just competing for better financial offers,” says Shrijay Sheth, founder of Legalwiz.in, a business solutions provider.

The ‘M’ word
The issue of ‘moonlighting’ has been doing the rounds of late. It got wider attention after Wipro chief Rishad Premji equated it to cheating. Several other companies have also raised their concern, with a few of them even sacking employees for moonlighting.

Wipro recently fired 300 employees for moonlighting. Additionally, it has announced to open offices four days a week with employees needing to attend office physically at least three days in a week. This was done to adopt a flexible approach to make teams experience and build meaningful relationships at work.

CN Ashwath Narayan, the IT minister of Karnataka, asked those who moonlight to leave the state, saying freelancing beyond office hours is “literally cheating”.

IT and tech giant IBM, too, sent a strong note to its employees over moonlighting. In a note to employees, Sandip Patel, India and South Asia head of IBM, wrote: “A second job could be full time, part time or contractual in nature but at its core is a failure to comply with employment obligations and a potential conflict of interest with IBM’s interest.”

Calling moonlighting an ethical issue, and against the core values and culture of the company, a spokesperson of TCS told FE about a long-term commitment towards employees, and employees have a reciprocal commitment… “To combat moonlighting, we are continuously driving positive messaging and engaging with associates on learning and building careers. We are exploring newer work models such as flexi-working, gig and talent cloud…”

However, moonlighting is not even a statutorily recognised term in India. According to Anshul Prakash, partner, employment labour and benefits, Khaitan & Co, organisations are focusing on employee reorientation emphasising on the exclusivity of their services throughout their employment tenure while also proposing clarifying changes to the existing appointment terms. “Policies have been contemplated that would set out the mechanism for an employee to pursue other business interests after due approval of the employer, if such business interests do not compromise with the exclusivity of their services,” he says.

TV Mohandas Pai, former HR head and board member of Infosys, feels that for challenges like moonlighting, IT companies can address the issue in two ways. “First, they should have very clear policies as to what amounts to moonlighting and what does not. For example, a person working on a hobby or an NGO outside of his or her work hours is not moonlighting. Second, the salaries of freshers must be increased. While the salaries of the senior-level people have increased 5x, the salaries of freshers have remained the same in the last 10 years,” Pai told FE recently.

Not everyone has been averse to moonlighting, though. Union minister of state for skill development and entrepreneurship and electronics and information Rajeev Chandrasekhar, while noting young workers’ desire to monetise their skills and build financial stability, had earlier said, “So, the efforts of companies that want to pin their employees down and say that you should not work on your own start-up are doomed to fail.”

Tech Mahindra CEO CP Gurnani had also earlier tweeted, “My thoughts on the trending ‘M word’… It’s necessary to keep changing with the times, and as always, I welcome disruption in the ways we work.”

What employers must do
Employers need to have clear policies on what practices are permitted and restricted which are monitored and enforced. Akshay Sachthey, associate partner in law firm Phoenix Legal, says, “Under the Shop Act of some states, dual employment is restricted, and a voluntary go-slow or neglect of work can be treated as misconduct which is a ground for termination. IT cos have, in some instances, been treated as factories in which workers are restricted from taking up dual employment. But these provisions do not apply universally.”

The findings of this year’s Randstad Employee Brand Research state that 85% of employees are likely to stay with organisations that offer reskilling or upskilling opportunities. “The best solution to retain talent lies in building a workforce that is engaged and future-proofed by relevant skilling opportunities. It is important to develop a fluid structure of working hours, hierarchy with a special focus on employee wellness,” says Sanjay Shetty, director of professional search & selection and strategic accounts, Randstad India.

Organisations must prioritise skills over location to appeal to the millennial workforce. “Make learning and growth central to the employee experience. A geographically dispersed workforce allows the company to hire the most qualified candidates and expand into new regions,” Daya Prakash, founder, TalentOnLease, a provider of IT talent on demand, was quoted as saying in an FE report.

“We already see investors getting more ROI-centric, companies getting more conscious about hiring, and the approach has largely changed from hiring in batches and retaining what sticks to need-based and vetted talent. Even employees are seeking more stable positions, while the employers have realised the value of employer brand building to perform in demanding times,” adds Sheth of Legawiz.in.

Experts also see a sharp decline in work morale making employees quit, retire, and switch professions. Employee engagement and institutional culture are the biggest factors to retain employees, says Bhansali of NASSCOM. “Despite heavy pay cheques, great work environment, facilities and infrastructure, if employee engagement and culture is missing, retention becomes tough,” says Bhansali.

In this regard, Nancy Hauge, chief people experience officer of Automation Anywhere, a global software company, says retaining top talent is the key to ensuring that companies’ growth and culture foster employee satisfaction. “By automating low-value, manual, and repetitive tasks, employees move on to the next great idea and shift focus from tedious to value-added work… We practise work-life balance initiatives like a ‘no meeting Friday’ policy, and a ‘stress-free day’ every quarter,” she says.

Hiring & firing
Several tech companies have cut jobs and scaled back hiring in recent months as global economic growth slows down due to higher interest rates, rising inflation and an energy crisis in Europe.

While Facebook’s parent firm Meta says it has frozen hiring and plans to ‘restructure’ the organisation as recession fear looms large, Indian edtech giant Byju’s said it will sack about 2,500 of its 50,000 employees as it looks to turn profitable this fiscal year. Digital mortgage lender Better.com announced mass layoffs this year, after making a similar move last year. Google has asked hundreds of employees to re-apply for jobs in their companies, using restructuring as a way to quietly let them go without announcing mass layoffs, The Wall Street Journal reported in September. Apple cut over 100 contractor roles from its recruitment arm across several regions in August while Microsoft announced to lay off 1,000 employees across multiple divisions in October.

A KPMG Survey titled 2022 CEO Outlook has revealed that 39% of CEOs have already implemented a hiring freeze while 46% are considering job cuts over the next six months. The survey included technology and telecommunications, among other key industry sectors.

However, a Naukri JobSpeak report showcased a spurt in hiring activity in September with the Naukri JobSpeak index touching 3103 and hiring activity recording a double-digit growth at 13% y-o-y and 10% sequential growth. But hiring in the IT sector slowed down recording 6% y-o-y de-growth in September as compared to the same month last year.

The Indian IT sector has witnessed 15.5% growth in the last decade and has created additional 5.5 lakh jobs in FY22, as per a report by TeamLease Digital.

Back to the future
The pandemic was a testing time for remote work that gradually switched companies to different work models. Experts feel this will stay for the foreseeable future. But it also requires new processes, systems, infrastructure and mindsets to work. This means the roles and responsibilities of HR would be proactive, strategic, and comprehensive—retention, employee engagement, work-life balance and an inclusive work-culture.

According to PwC’s India Workforce Hopes and Fears Survey 2022, over 30% of Indian employees say they are very likely to switch to a new employer. Over 80% believe that their jobs can be done remotely. About 71% of employees are concerned about being overlooked for career advancement. Up to 54% of employees strongly/moderately agree that India faces a shortage of their skill sets.

Chaitali Mukherjee, partner and leader, people and organisation, PwC India, says: “The disruptive landscape of social, environmental, economic, and geopolitical changes has had profound consequences on organisations and their workforce strategies. Leaders need to consider these disruptions while drawing up their short- and long-term plans for the organisation and people.”

Young minds lack patience and maturity to think through, which results in an unsettling scenario as impulsive decisions are taken based on instantaneous attraction toward larger IT entities, says Pranav Pandya, chairman and director of GESIA IT Association, which represents the IT industry of Gujarat. “HR now means a full-time activity of human relationship besides all the classic tasks of hiring, onboarding, engaging and carrying out client relationship activities,” he explains.

The pandemic has accelerated digital transformation across industries, threatening many jobs and reducing the skill shelf-life. Upskilling across job roles has become a priority for companies. “Industry 4.0 relies on both technologies and processes. Digital skills have taken centre stage with data being crucial to decision making. For India to leverage the trillion-dollar digital opportunity and realise the potential of its demographic dividend, new graduates need to have the new-age skills for in-demand jobs and working tech professionals must consistently upskill to stay relevant,” adds Raghav Gupta, MD India and APAC, Coursera, global online learning platform.

Many organisations are also prioritising upskilling over frenzied hiring as it helps them to leverage expertise of existing workforce, provide growth opportunities to existing talent, retain organisational culture and manage costs.

“Upskilling employees not only enhances their productivity, but also provides the employees opportunities to work on modern applications and technologies —which helps in overall employee engagement and continuity,” says Bimaljeet Singh Bhasin, president – enterprise business India, NIIT.

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First published on: 30-10-2022 at 04:30:00 am
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