How transparent are hiring and layoff practices in Indian IT services companies?

A few days ago, IT giant Infosys let go of around 350 freshers after they failed to clear internal assessments despite being given three chances. These tests, conducted at the company’s training centre in Mysuru, evaluated trainees on Java programming and database management systems (DBMS). The mass termination raised concerns about how IT companies hire and fire employees, especially at a time when the global economic slowdown has led to cautious hiring practices.

Following a directive from the Central government, Karnataka Labour Minister Santosh Lad held a discussion with the management of the Infosys Mysore campus. Later, the minister expressed dissatisfaction over the lack of transparency in how IT firms handle layoffs and performance evaluations, and said many employees hesitate to file complaints fearing repercussions.

IT services companies hire thousands of freshers every year and they pick them up much in advance from different engineering colleges from across the country. They are hired in advance as Indian IT services want to utilise their services for different clients. However, the hiring takes place keeping in view the business scenario from say six months to a year down the line. Business scenarios can, however, change as per an analyst. The anticipated deal that the IT services company was hoping to crack may not come through or may get delayed which might delay the onboarding of new freshers.

This is a time-tested methodology which is being followed by the Indian IT services companies. Given the intense competitive environment it is the need of the hour for freshers to keep reskilling themselves as the speed of change in today's technology industry is extremely fast. Those employees who are unable to keep pace may become redundant in the workforce.

“There is a likelihood that many of the freshers who have got appointment letters from an IT services company may face delays in getting onboarded as the business scenario might have changed or a given deal might have got delayed. So it is nothing surprising that the freshers' onboarding may get delayed for six months to a year or more,” remarked B.S. Murthy, CEO of HR firm Leadership Capital.

Similarly, all the freshers are time and again evaluated during or after their basic training schedule by IT services companies as nowadays customer pressure is tremendous on IT services companies. As per market analysts, new clients keep looking for newer skill sets in their projects so that they have an edge over their competitors. The slightest lack of the required skill sets can jeopardize the entire project. In case the IT services companies do not get the required skill sets they are forced to terminate the services of the freshers whom they have onboarded.

“IT services companies never compromise on the skill sets part. If the freshers do not show their willingness to acquire new skillsets or are slow learners, they are no longer kept with the company and are retrenched,” added Murthy.

Going by this scenario, it is very challenging to have a uniform hiring and retrenchment policy followed by an Indian IT services company as the business dynamics keep changing. Moreover, different IT services companies deal with different clients who have different changing requirements from time to time.