Will Infosys clause to retain talent backfire?

As the IT major enforces new clause to retain talent, IT workers’ union gears up for a fight

Technology jobs have turned critical over the past years and when companies face attrition issues, it becomes a major problem. The software and BPO sector in India has been witnessing a surge in attrition, with IT companies finding it hard to keep their talent close to themselves. And, in that context, IT firms are looking at unconventional measures to retain talent.

It is here that the Infosys dilemma sets in. The attrition rates have been burgeoning and the IT major has been forced to put forward a clause for its employees to the effect that its employees cannot work for the competitor companies for six months after leaving the company!

As if that wasn’t enough, the company has also restricted employees from joining the workforce of the clients they had worked for in the last 12 months before quitting. The clause reportedly includes these companies in Infosys’ competitor list, and they are Accenture, Tata Consultancy Services (TCS), IBM, Cognizant, and Wipro.

IT workers’ union seeks govt intervention

These have been revealed by a letter shot off to Bhupender Yadav, Minister of Labour and Employment. A workers’ union of the IT and BPO sector employees has found the new clause brought into effect by the Infosys management extremely irksome. The union has written to the Ministry of Labour & Employment and the Ministry of Corporate Affairs, seeking intervention in the matter.

However, Infosys has maintained that the non-compete clause is a “standard business practice” in employment contracts. The Infosys has clearly come about after the company has been witnessing the attrition of talent. It needs to be noted that Infosys had reported an annualised voluntary attrition rate of 27.7 per cent during January-March period, compared to 10.9 per cent in January-March 2021.

The union, reportedly, decided to act and began with a letter to the Union ministry after it received close to 70 complaints that Infosys was forcing the non-compete clause on its employees. However, Infosys has been quoted as saying that it is a standard business practice in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests. Further, Infosys has stated that the clause is fully disclosed to all job aspirants before they decide to join Infosys.

IT-BPO staff irked by unconventional move to retain talent

NITES, the IT workers’ union in its letter to the minister stated that for the period of six months after leaving Infosys, employees cannot accept any offer of employment from any customer, and in the twelve months immediately preceding termination or accept any offer of employment from a named competitor of Infosys. This, the union felt, would seriously impact an employee’s means of livelihood. The Union minister has been urged to stop Infosys from doing this.

What the situation will lead to is to be seen. It is not known whether Infosys would think again and withdraw the non-compete clause enforced upon employees. The Union Ministry, for sure, has a task in its hands. Let’s wait to know what the scenario would look like soon.

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