By Charles F. Moreira
Analysts, programmers and coders with India’s major IT companies has so far been lucky compared to their North American and European counterparts, as a sizeable proportion of them are employed on full pay just to stand by ready to be immediately deployed on IT projects as and when needed, much like military personnel who are on standby, ready to be sent into battle at short notice.
Such standby workers are said to be “on the bench”, borrowing from the practice in soccer and cricket to have a number of players sitting on the bench ready to replace any of the players on the field who may be injured and this suits Indian workers fine, since all workers in India (or most sane workers any where else in fact) generally prefer full-time employment over part time or contract employment. At one time, as many of 30% of workers, including fresh graduates and senior programmers at India’s large IT companies have been on the bench, sometimes for as long as six months, during which time they learn as well as focus on some internal initiatives, have the opportunity to learn new skills, prepare for projects or for competitive examinations to improve themselves.
For Indian IT companies, having a certain reserve of workers on standby is favourably viewed by clients, since it indicates that they have enough human resources ready to swing into action right away but on the other hand having too many employess on standby for too long reflects badly on the companies, since clients may view that as their staff being underutilised.
Providing an IT worker’s perspctive, in her post on Quara.com, Indira Raghavan wrote: “I spent around 16 months in bench. Initially it was like getting paid to enjoy the life. Later on it makes you uncertain to even attend any project calls. It takes sometime to figure out the company is not responsible for your growth. You have to get yourself together and work hard. Be proactive, prove yourself. Staying complacent doesn’t work well, not within TCS or if you wish to move out. Recognise the “benchmark” move out of it as soon as possible”. Indira now works for i4 Quality Software in Ontario, Canada.
However, with increased use of automation, growing unionisation and growing protectionst sentiment abroad, more of these companies are begin to trim their workers “on the bench” workers in preference to employing them on short term contracts whenever there are short term contracts, much like in the rest of the world. Indian IT giant Infosys launched a “Zero Bench” initiative in 2015 to help its IT employees find short-term assignments and increase their utilisation rate. According to Infosys’ fiscal year 2012 annual report, the company’s utilisation rate was 76.6%, which rose to 81.7% in its fiscal year 2017 annual report, or conversely, the company had reduced its IT employees’ bench time. Besides Infosys, Indian IT companies such as Wipro and Cognizant have been trying to reduce their employees’ bench time.
Indian IT companies are now beginning to follow their western counterparts and are increasingly resoorting to engaging employees on contract to work on specific projects at short notice, and industry experts expect this new trend to replace the practice of having full time workers on standby. Once they have completed a project, such workers can either move on to the next project at the same company, at times get absorbed as a full-time employee at the same company or move on to a job at another company.
Human resources experts believe that contract employees are a better alternative to employees on the bench, since they are as effective in terms of deployment, they help cuts down costs, the company can pick professionals with better skills, and, finally, it helps the companies avoid mass layoffs and subsequent protests. In their latest annual reports, Wipro and Cognizant say that “profitability could suffer” if “favorable utilisation rates” are not maintained.
“All IT companies are under cost pressures now,” said Kris Lakshmikanth, managing director at recruitment firm Head Hunters India. For the IT workers, most companies pay contract workers 20% more than they would full-time employees, whilst for this works out cheaper than having workers on the bench. “Contingent hiring would be the way forward across the industry. Typically, contract employees will be the virtual just-in-time bench,” said Thammaiah BN, managing director of recruitment services company Kelly Services India.
Whilst like most sane people, Indian IT workers still prefer full-time jobs for the financial and economic certainty these provide but at the same time more are beginning to accept the inevitable and acceptance for contract-based employment is increasing. It is seen as an opportunity to first get one’s foot in and then get absorbed into a company. Then there’s the advantage of getting good brand names on one’s resumes, learning new technologies, and gaining knowledge and experience, Dhingra pointed out.
Besides, it is good money. IT firms pay contract employees more than the regular employees. So, for someone who is benched, between jobs, or just out of college, contract work is a good deal. Of course, there are drawbacks, too. “Recession? Layoff? Contract employees are the worst hit,” says Shashank CG, a software engineer.
The human resources industry in India believes that contract jobs are good for someone who is benched but on the other hand, Shashank CG, a software engineer said that contract employees are the worst hit during a recession or layoffs.
As long as the India’s IT industry remains reasonably vibrant, despite periodic ups and downs in global demand, hopefully contact IT workers will be able to make a decent enough living from their work, whilst they enjoy their relative independence from being tied down to a particular employer.
However, the growth in the use of automation and greater use of highly centralised cloud-based applications will reduce the need for IT workers, just as the growth in the use of self-service (ATM, cash and checque deposit machines) and online banking facilities has reduced the need for counter service staff at banks in Malaysia and in other countries. According to a veteran Malaysian IT professional who is one of the pioneers of computing in Malaysia, a major Malaysian bank once had over 250 systems analysts on its payroll but now has dispensed with most of them, in preference for cloud-based and outsourced IT services. He also pointed out that with greater centralisation of computing power, thanks to cloud computing and the Internet, the IT industry today requires fewer IT workers to keep systems running.
Threats of layoffs in India’s IT sector have already been underway,, with World In One News (WION) reporting on 17 May 2017 (incidentally also World Telecommunications Day) that 200,000 jobs are at stake across India’s IT industry.
On 8 May 2017, India Today reported that IT workers at Chennai-based Cognizant are fighting back against moves by the company to retrencch over 6,000 workers, with plans to eventually retrench up to 20,000 workers; whilst at the same time, Cognizant is hiring American IT workers at its facilities in the United States, allegedly thanks to cutback in the issuance of H1-B visas by the Trump administration.
However, unlike their relatively tame American counterparts, India’s IT workers don’t take matters lying down, and will fight back, like the Tata Consultancy Services (TCS) workers who picketed their employer against retrenchments in January 2015, according to ABN Telegu.
Thus it is not inconceivable that an increasing number of IT workers could one day find themselves having descended into the ranks of the precariat, a term which sociologiologists and economists define as a social class formed by people trapped in an existence without predictability or security, thus affecting material or psychological welfare – a widely reported situation many graduates and workers in Europe and North America now find themselves in, with them having to struggle to make ends meet and pay the bills from whatever meagre income they earn from zero-hour contracts, where there is no certainty that they will have work the next day or even for part of a day.
For example, being on zero-hour contract has resulted in street protests against an employer in Britain.
The name of the game is to cut costs, and human IT workers are mere digits who can be tossed into the dustbin when no longer needed, or flushed down the toilet like used toilet tissue.
“Move up the value chain”, the pundits and talking heads will say; but are there that many IT jobs up the value chain? After all, there’s less available living space the higher one moves up a mountain.
Meanwhile, back in India, fortunately for some IT workers, the bench has not disappeared just yet, but it has gotten much shorter than before.
Video courtesy of WION