Corporate sector's long notice period is a let down

  • Created Date06 Feb, 2019
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A recent article in the newspaper about notice period forced me to think if a notice period of 3 months is inevitable for the organizations. Almost all the mid-size and big organizations are talking about engaging employees by increasing their happiness quotient in the workplace and thus garnering staff loyalty. Then, why is this policy so unfriendly?

As a former IT employee, I have been there 5 times in my career and trust me, notice period beyond 1 month is intolerable for an individual—however cooperating the policies are and the manager is.

For those who are not aware, notice period is the time an employee has to serve to their company after resignation. This time is needed to hire and upskill a new person who would take care of the responsibilities of the resignee. During this period, the leaving employee has to train a new member to take their work duties. Parallel to the knowledge development, the replacement hire warms up to the new team members and processes in the company. With the client too if the role is client facing and many such nitty-gritties of a day-to-day work.

A HR platform, Hush surveyed 2.8K employees in India and 90% of the employees confirmed that a notice period of 3 months is not a justice with the employees. Let us delve more into long notice periods corporate sectors impose, which is often a nuisance among the staff of IT, Banking, FMCG, Automobile and other similar industries.

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Notice Period in India compared to other Nations

As compared to American or European counterparts of the same firm, Indian employees have to serve a fixed notice period defined in their offer letter, which is often astonishingly higher by a factor of 4 to 6. Many organizations in India used to have a notice period between 1 and 2 months some years back but scenario changed from almost a decade and biggies shifted to 3 months’ notice period. Mid-level companies also followed the suit.

Either the reason could be to reduce the attrition or because many business groups maintain a very small pool of resources on the bench for cost-saving factors. So, to backfill the vacancies in a few weeks becomes a challenge, and hence, a longer notice period.

What is the impact of a longer notice period on employees?

It is difficult to keep an employee motivated to work with the same dedication beyond a certain period once they resign. 3 months is a long time to keep serving and the offers an employee get from the competitors usually need them to join as soon as possible. If the new employer is a startup or a smaller firm, they demand the employee to join within a month which is almost impossible while serving a notice as long as 2-3 months. Thus, many candidates lose a prospective offer due to this obligation.

Some companies buy-out the notice for their new employees and pay some amount to the old employer to relieve the employee early. But this also involves a mutual consent between the new and the old employers, and financial dealings.

In India, contract-to-hire employees have an option to quit with a shorter notice as they are not in the payroll of the company but work as contractors recruited for a fixed period through an agency. But their notice period that used to be between 15 days and 1 month earlier is almost double these days in many organizations. Also, professionals do not want to work at contract-to-hire position in India due to missing many perks and benefits as opposed to US and UK firms where working as a contractor is a regular trend.

Overall, not just excellent opportunities are lost for an employee just because of the notice period, but the zeal with which they worked earlier fades off too while waiting to be relieved from their duties.

Long Notice Period – reasons employers cite and the repercussions

The sole purpose of the notice period is to backfill the vacant position of the leaving employee. The new recruit is often an internal hire who knows the policies and systems of the company. So they don’t need any training to get used to with the company’s policies, tools and traditions. If the backfill employee is a lateral entry, a month is usually sufficient to train them not just towards the project responsibilities but also about towards the organization’s policies and understanding the work culture apart from initial week of onboarding.

It has been noticed that the leaving employee—although unknowingly—influences many around them and a few colleagues follow the trail by looking for the opportunities outside. This in fact casts a challenge in reducing the employers’ turnover and mars the morale of other employees. Owing to these indirect effects, the organizations should ponder on changing their notice period policies.

Employers claim that during the layoff period, when an employee is handed a pink slip, they get an ample time to search a new job and the adequate notice period offers some security. Not only this looks scraggy reason but also being laid off from a company itself is unjustified except in case of extremely poor individual performance.

Haven’t we seen the unreasonable layoffs in the IT industry where people have been sacked within a week’s time when a company’s business graph hit low?

What measures can be taken?

This is a much-debated topic among the employees and perhaps, an intrusion from the government with solid labor laws would favor the employees. Many a time, petitions have been filed which were fruitless and only grabbed eyeballs but no results.

There are still ethical ways to negotiate the notice period:

  • Talking amicably with the manager and HR,
  • Getting waiver against your outstanding leaves,
  • Asking the future employer for a buy out.

So, parting from the current organization in an ethical and legal way is the right option to choose. The boring and long notice period can be compromised with a mutual discussion until the Ministry of Labor and Employment, India frames employee friendly policies regarding notice periods.

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Ramprakash

Lot of insights and easily understandable any complications. Great article madam.