Employees launch petition against 3-month exit notice in IT cos

Pushed into a corner due to a potentially poor salary increase and slower job growth, India’s IT sector professionals have knocked on the government’s door seeking a respite from tough exit clauses.
Over 28,000 IT employees have signed an online petition asking the Labour Ministry to stop IT companies from holding them to a three-month non-negotiable notice period, The Economic Times reported Thursday.

“It is unrealistic for anyone to plan that far ahead for their future actions and resign in advance not knowing state of the issue in next three months” the petition said. Employees at IT biggies such as TCS, Infosys, Tech Mahindra, HCL Technologies, Capgemini, Accenture and IBM have to serve three-month-long notice period before joining other companies.
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The 3.9-million-strong IT sector expects a low single-digit wage increase for FY18. Also, industry experts view three-month notice period as a measure to fight attrition and employee-retention tool. Long notice period also can dissuade IT employers to wait for prospective employees.
Besides, IT services sector sees employees as billable resources. Thus, company may lose money if a suitable replacement is not found in time, which forces employers to resort to various measures to retain employees.
Tech Mahindra has halted thesalary revision process for employees with more than six years of experience, subject to a management review. IT industry body, National Association of Software and Services Companies (NASSCOM) had postponed setting a target for industry growth until May in view of slowing growth and regulatory hurdles in the United States for H1B visas.
Human resource experts said the three-month notice period is being used as a tool by IT companies to combat high attrition rates. While these rates vary, most Indian IT firms face attrition rates of between 13% and 20%, according to industry estimates.
TCS, Tech Mahindra and Capgemini did not reply to ET’s email queries, while a NASSCOM spokesperson said notice period was a company-level decision and that there was no collective industry view on the issue