Does IT sector’s 90-day notice period even make sense?

In India, the 90-day notice period has long been a significant problem for IT-sector employees, who are known to switch jobs frequently. On average, workers in this sector choose to leave an organisation for a new one in every three to four years.

The 90-day notice is now sort of a standard across Indian IT companies. This duration is used by a company to reveal the vacancy before the market, interview candidates, finalise compensations, hire them and finally, finish KT (knowledge transfer). Often, some candidates back out during this process, and the entire cycle needs to be repeated.

These 90 days aim to ensure a company has adequate time to find replacements, train them and convince clients the new workers are equally good and won’t significantly affect work delivery or business.

So, the long notice period sounds fair, right? But why are an increasing number of employees not happy with the duration? Abroad, especially in Australia, the UK, and the US, the same Indian IT companies do not make their workers wait for 90 days. The duration usually varies between 15 to 30 days, depending on the country’s job culture.

If employees in India fail to follow the procedure, they would have to pay the notice period amount for the remaining number of days. The company would keep their experience letters, relieving documents and final settlement on hold.

But if a firm wants to terminate a worker’s service, it usually does so in a single day, without paying compensation. Therefore, this notice period doesn’t offer a fairground to both parties involved. Moreover, the long duration can pose additional difficulty during periods of uncertainty.

90 days is quite a long and dangerous duration during an economic slowdown or a pandemic. In fact, this notice period made many IT employees jobless in 2020. Since the IT industry’s attrition rate isn’t that low, a significant number of employees are on a notice period at any given time.

The workers who had resigned in January, February or March and were on notice period, were forced to leave when COVID-19 hit hard. But because of the pandemic, the companies that had promised to recruit them, refused to do so. This left thousands without jobs.

But had the notice period been shorter, the impact would have been much less as not many employees would have been in transition. The companies which want candidates to join within 15 days are often the same which don’t let an employee leave before 90 days.