18 June 2024

The 90 day notice Period. Why a dangerous bubble is building in the Indian IT Industry

 Great resignation gets a lot of attention. But, Due to the talent crunch, its flip side is companies throwing absurd amounts of money to retain and attract new talents. In a competitive market like India, IT talent with niche skills get 3 to 5 offers each. Candidates use these offers to trade better packages. Here is why I am happy about it, and also alarmed by this trend.

  1. Apart from a few organizations pushing people to return to the office, access to talent has flattened. You could work from anywhere and deliver the goods. The value of good talent has gone up.
  2. Any biased arrangement eventually fails. Indian IT Industry has been running the practice of 2 to 3 months notice period. It is an attempt to strangle talent, of course, making new hiring even more painful. Due to this, Engineers have realized their value appreciates every day while they are on notice period. They are taking full advantage of it.
  3. Hiring companies splurge on an engineer who has 15 15-day notice period vs 90 days. It gives them an edge in fulfilling a requirement for a customer.

I am happy for the IT engineering community to take full advantage of the potential. I won't take any high moral grounds here, because the industry leaders & companies have not set a great example.

However, I see a major downside to this trend:

  1. The flattening of the world is squeezing the contracts. Customers are not paying more. Margins are not going up. Money splurged by the hiring companies will come from these diminishing margins and bottom lines.
  2. Business is not sustainable if the cost of doing business becomes higher than the value it creates.
  3. It is commendable to pocket a great package after negotiating several offers but may come at a risk. Companies that are today involved in bidding wars may become unstable tomorrow. Companies would resort to cutting staff the moment they are unable to meet the revenue & margin targets. This is setting up an approach of hiring and firing for business needs.
  4. The strongest offers don’t mean cutting edge or most exciting projects.
  5. Wealth creation happens on sustained long-term bets. The short-term uptick from negotiations won't help.

Companies should make policy changes with notice periods. Our next progression will come from automation & building a gig culture, and not trying to retain talent by these unscrupulous methods.

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