Unions In IT Industry... Come On, Give Me A Break!


In the last few weeks, there has been much talk about the possibility of retrenchment in the Indian IT Services sector. While on one hand, we have screaming headlines naming companies that are in fact going to layoff employees, we have, on the other hand, some captains of the industry and the Minister of IT himself, who claim that there will be no layoffs, and in fact hiring could actually go up.

Amidst this entire din, there is a new narrative that has come up. There are a few employees/ past employees, who have demanded that the companies in question ought not layoff, and to prevent that, have mooted the idea of employee unions in the sector. Adding fuel to the fire, as usual, is one of the founders of one of the largest companies in India, who keeps issuing statements, every now and then, about how the top management must make sacrifices to ensure that there is enough money in the kitty that can prevent layoffs.

My first reaction to the idea of employee unions in IT sector was one of disbelief. I mean, here is a community, which rode the gravy train, got compensated handsomely, spent it all on buying property and the Bangalore pubs and when the going gets tough, want protection from layoffs. Just because they cannot now sustain their lifestyles!

And the best (or the worst, depending on which side of the fence you are on) is that there is no one who is telling them to get off and smell the coffee. 

Workers unions were an idea mooted to prevent exploitation of blue-collar workers by the owners. Back then, the establishment owners were notorious for extracting long hours of work from employees (read blue collar workers) and were a tad reluctant to pay not just fair wages, but also scrimped on paying extra wages for the extra hours that the workers put in.

Consequently, the government, in all countries, brought in an element of fair play, by legislating and allowing the workers to form unions to ensure collective bargaining. Mind you, the worker that we are talking about is Blue collar, typically not a college graduate or engineering graduate and in many cases, came from a very modest social background.

Now compare them with the typical IT employee. She / He is typically a graduate, probably from an engineering college and has been paid as per industry norms (though a few cynics might even suggest ‘more’ than industry norms) and have very clearly defined working hours. In most cases, these folk get transport from to the place of work (which is not the norm for Blue collar workers), get to enjoy facilities such as campus cafeteria, corporate HR interventions such as paid leave, insurance, gratuity, provident fund etc. In many companies, they also have access to medical facilities, counseling facilities too.  

Now these folks want a union to force the management of the IT services companies, who, due to whatever reason (Trump, Brexit, declining sales) want to tell the employee “Thank you very much. Here is your severance (which is more than what is generally stipulated by law), we can’t afford you anymore”.

What they are essentially saying is that even if the companies don’t have business, they should continue to employ me. Some sort of a birthright is what is being claimed.

There are of course specious arguments, put forth by them and tacitly supported by a few worthies to say that layoffs can be avoided by the top management making ‘sacrifices’ – a euphemism for pay cuts. To me, that is just so much nonsense. The shareholders of the company are not running a welfare economy. Neither is it their lifelong duty to protect the job of an employee.

Markets change, technologies change, skill sets get replaced and new skills are needed and the responsibility of the company is to their shareholders, government and other stakeholders – first, last and always. To argue that the body corporate has to practice ‘compassionate capitalism’ is like telling a salesman to give away the goods, to earn good karma.

I think this entire debate about employee unions in IT sector needs to nipped in the bud – by the industry, by the industry body, and also by the government. It needs to be done fast or else this rubbish will gain huge sympathy, because of the human factor involved. The industry ought to say ‘we will do our best to reskill you, if it is possible. If it is not, sorry, you have to go’.

It is not that the industry does not need people – it does. However, it has to be right-sized, all the time. Given the current competitive environment globally, it will be extremely harmful for the players to even get into this discussion.