The 90-Day Handcuff

When notice periods were first mandated, they served to save the current IT industry from the high attrition rate.  However, it seems that the current 30-day notice policy isn’t working and a lengthy 90-day notice period was recently introduced.  Leading IT companies hope that increasing the length of the notice period from 30 days to 90 days will not only protect them from competitors looking to poach their key employees, but at the same time, buy themselves the time required to find a suitable replacement.

From the employer’s perspective, this exit policy would provide for better resource planning and empower an employer with ample time to find a replacement if an employee is to leave. This also gives a chance to the employer to retain their employee, if not find the right replacement, as the employee is less likely to get an opportunity with this lengthy exit period. One of the main reasons behind this change is also that the long notice periods ensure that the projects or tasks being currently worked on by the employee have a smooth transition and knowledge transfer, rather than a quick handoff where it can have a negative impact on the work produced.

In contrast, long notice periods might also be counterproductive to employers when it comes to the productivity of the candidate with loss of interest and motivation.  Lengthy notice periods create an environment where a candidate can then easily market his new role within the company, which may lead to other employees leaving for the same opportunity. In addition, candidates now have access to confidential company information and data for an additional two months. Making it mandatory for an employee to serve a long notice period might impact the organization adversely—something that employers may have not considered. It also can’t be overlooked that candidates may seek to be retained by re-negotiating their salaries based on a higher offer.

From an employee perspective, putting in a 90-day resignation can create additional opportunity for employers to mistreat the employee, knowing that they will soon be leaving.  It can also be difficult for an employee to be able to plan their future goals for three months down the road, while having to give immediate notice for these future plans.

The shockwaves have already been felt as more than 28,000 IT professionals have signed a petition addressed to the Union Ministry of Labour & Employment stating the current exit policy is “unrealistic” for candidates to plan their future while being locked in for the next three months.

This notice period strategy appears to be more of a temporary fix, which is less likely to solve the attrition problem. Rather, organizations must focus more on investing in their current resources through training and development methods which go along with the firms’ long-term strategic plans. Many corporate pundits have advocated the fact that investing in an employee development plan will be the first step in tackling the problem of high employee attrition rates and employee replacement costs.

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