Tech Mahindra sacking: Anand Mahindra's apology tweet no solution; IT cos' HR policies need to change

Anand Mahindra’s tweet seeking apology for the rude sacking of an employee, though admirable, glosses over the problems faced by Tech Mahindra in particular and the IT sector in general. The incident shows the heightening stress in the sector that is taking a toll on the self-esteem of the employees, both the engineers and some very experienced ones at that, besides on the management front, too. Firing employees, irrespective of experience, is not a new phenomenon in the IT sector. There are sacking orders executed by top majors in the IT sectors that could be seen as inhuman in the context of ‘best’ practices. [caption id=“attachment_2428622” align=“alignleft” width=“380”]  Anand Mahindra, chairman, Mahindra & Mahindra. Reuters[/caption] What is becoming evident and clearer in the public forum is the manner in which the employees are being asked to leave. Case in point: A fresher joined an IT company in Chennai in 2011-12 after paying Rs 1 lakh as bond. The agreement stated that if he left the company’s services within a year or if the company terminated his services, either which way, the employee had to forfeit the bond to the company. Eight months after joining the firm, the employee was sacked with no reasons offered. When he reported to work, the security at the gate took away his ID card and asked him to go home as his services were terminated. He approached Fight for IT Employees (FITE), a union that has taken shape in Chennai and is awaiting registration. FITE is fighting the case in court. Mass layoffs in IT The IT industry is going through a churn with automation, stricter visa rules in the US, Singapore and Australia among other countries, coupled with the rapid pace of technology. This is one of the reasons for mass layoffs in the sector. “Around 100,000 employees are expected to be laid off by the year-end. So far, 50-55,000 employees have been sacked or asked to leave,” said an analyst. Assocham, the country’s apex trade body, had cautioned about the IT sector’s prospects in April: “Aggravated by rising rupee leading to lower realizations for software exports, the Indian IT firms may be forced to displace work force. In that case, the chances of layoffs are real.” With rapid change in technology, IT firms cannot afford to go by outdated human resources (HR) practices that make hiring and firing a closed-door affair. Thanks to social media, the acidic tone of HR is being felt by anyone eavesdropping on the conversations (see below) or by employees putting out their angst naming and shaming the IT majors they worked for. “Traditional HR practices cannot work anymore when you fire an employee,” reiterates Sanchit Vir Gogia, chief analyst, Founder and CEO of Greyhound Knowledge Group, a global strategy and transformation research, advisory and consulting group. With social media gaining increasing traction with regard to hire-fire policy of the Indian IT sector, HR policy needs to undergo a transformation, says Gogia. Why do companies take to this threatening attitude when asking employees to leave? One of the reasons for it, says Vinod AJ, general secretary, FITE, is that the company wants to avoid paying compensation to employees and also because simply there is no employee ‘incompetency’ to report about. “What else can they do than fire an employee on the spot,” asks Vinod. Anand Mahindra’s tweet is just a mere apology, says Vinod AJ. “What will it do for the employee? The job is not going to be offered back,” he says. But that is the reality of the sector. With almost 60 percent of Tech Mahindra’s – just like the other Indian IT major’s – projects comes from the West where a severe slowdown and protectionist policies are dampening business prospects, revenues and bottomlines of the companies are hit.