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Old 2nd September 2011, 14:51   #1
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Thumbs down IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it.

I am starting this thread because when i was looking for real reviews from People with respect to Contract 2 Hire or Contract to hire jobs i didnt find much information. I hope this helps some body and I am also looking for some advise regarding my situation.

In the IT industry there are broadly 2 types of hiring.

1) Permanent - Where you directly join the payroll of the company, i.e TCS , Wipro , Atos Origin. Offer letter is offered by the company you are joining itself.

2) Contract / Contract 2 Hire - Where you join the payroll of 3rd party companies, like Future Focus Infotech / Focus Infotech , Magna Infotech, Helios and Matheson. They interview you for a position in a client company usually a bigger company like Wipro, TCS etc and an interview is also conducted by the client. Here if its a Contract 2 hire offer which you get it generally means you would be hired by the client company depending on various factors like your performance, tenure, noc from the 3rd party company etc.

So i had a decent permanent job here in Mumbai along with around 5 years experience in the industry. I was looking for somthing better in terms of compensation and project and i was looking out for available jobs in the market. One fine day i get interviewed from a company called Future Focus Infotech ( also Focus infotech ) for a position in Wipro Technologies Pune. I also get interviewed by the project managers in Wipro which turns out to be good. I get a very good offer which is around 40% hike in terms of my compensation. I also like the job description and responsibilities etc and I accept it immediately and agree to the joining date etc. It is a contract to hire job meaning i could be hired by Wipro directly if they are satisfied with my performance and various other factors. Meanwhile they start all the formalities, i.e collecting copies of all my documents, payslips etc. I get an offer letter where they mention the joining date as 22nd August 2011 and location Wipro technologies Pune etc. Meanwhile i complete the reliving formatlites in the organization where i used to work and prepare myself to join the company in Pune. The shocker comes to me on 17th August 2011 after i have already completed my last day at my organization that the project which i was hired for is on hold and they are trying to map me in a different project which would take a couple of days and they would inform me about it. They kept saying the same thing every 2nd day and did not commit on a date of joining. Meanwhile I talk to a senior Manager Mr Rangaiah Naidu from Future Focus Infotech and he assures me that they are in touch with Wipro all this while and they are going to map me in a differnt project in Wipro itself. Then they call me to Pune to meet their county head mr R.P Singh who is visiting their Pune office. In the meeting he assures me that they are going to place me in a weeks time. I have been following up with them daily and the lastest what i got to hear from their delivery Manager from Bangalore Mr Srinivas is that currently there are no openings in Pune for my profile so they cannot do much and they could help me get placed in Bangalore or Chennai where they have open positions for my profile. Since i do not have any other option i have now agreed to join at the Bangalore location and Mr Srinivas the delivery manager has told me that he would get back to me with an update. Looking at theway things are going, i have little faith in their assurances. Its the 2nd week i am sitting at home without a job now and it is really maddening to sit at home not doing anything.
This might be a rare occurance, but i was warned by many of my friends about not joining a Contract 2 Hire job. Through this thread, i just want to reach the people in the IT industry to be cautious of the body shopping companies, and companies like Future Focus Infotech / Focus Infotech which offer Contract or Contract 2 Hire jobs. I feel it is not worth the effort and there are high chances that you would end you putting your self in a position where you dont want to be in and cause mental trauma to yourself. These companies dont bother to keep their word and honor their offer and commitments. The only reason a contract to hire position exists is because they can pull the plug any moment without bothering about your job/career.
Meanwhile can any senior guys advise what can i do to make sure these guys dont get away with somebody's incompetence at their end ? Can i ask for a compensation ? Can i do somthing else ? Needless to say i am looking for other jobs in the market as i have little faith in their promises.

Last edited by heavy_foot : 2nd September 2011 at 15:05. Reason: grammer
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Old 2nd September 2011, 14:59   #2
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

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Needless to say i am looking for other jobs in the market as i little faith in their promises.
Really unfortunate, the contracting company are they not ready to take you in so that you are not without a job?

Market is not bad right now, i would say just start applying for other jobs, you can easily find a job there itself within couple of weeks.

Having said that, i would say that you also need to be careful while accepting any terms of employment irrespective of it being Perm/Contract or Contract to hire. Surprised that even after 5 years in IT you did not think about such stuff.
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Old 2nd September 2011, 15:16   #3
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Technically, if you were hired by the contract company, but interviewed and doing work for Wipro, you could claim co-employment. YOu would need to preserve emails and proof of meetings with these managers
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Old 2nd September 2011, 15:30   #4
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Well, sad to hear about the state. IT hiring these days is a joke especially these days, but the reality is, this is how it works in times like these.

So anyone looking for a job, i would request to be careful and only put in papers once its 100% confirm. One of my known person was offered from a very reputed company (They are not into services) and the offer was pulled out at the last moment. This gentleman thought about going to court but fortunately found another job and dropped the idea.

So bottom line is, try to get a Full time position, Only resign once these folks complete all the formalities (Even if they ask you to resign, please don't) like background checks, educational qualification checks and what not, Only when they give you written offer letter in their company letter head you should put down the papers. Let them know your terms and conditions like Notice Period and they should start counting from 1 or 2 days after giving you a written offer letter.
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Old 3rd September 2011, 08:32   #5
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

I also know of an incident with a friend of my wife's. He worked for an IT biggie X through a contract company M -- got fed up after 3 years with no promotion prospects and little increment.

So he got a job with another IT company Y. Now the contract company got to know of that job. And because they had a relationship, they approached the HR of company Y and convinced her that he should be on M's payroll. This guy, who had already put in his papers at X, refused. He said that he would rather sit at home for 3 months and find another job rather than continue with M. So, they actually threatened him with goons -- "we will ensure that you don't get a job with any company in GGN".

He was thankfully supported by his boss in X who knew of the whole matter and fought with HR to get him converted to a direct employee at X itself.

His conclusion was:
1. Often these companies have questionable ethics
2. Often some HR personnel of major IT companies are in cahoots with them. In other cases, contract terms are prohibitive
3. Although the initial promise will be "you'll join the company's payroll in 2 years" -- they would fight tooth and nail to prevent that from happening.
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Old 3rd September 2011, 11:16   #6
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

It's sad to hear this. It's a very sorry state of market in India right now. I highly believe that one should not go for a contract to hire position. As the 3rd party companies hiring people for their clients don't care a hoot about people. They are there just for the commission. The moment you are out of a project at client company, you are out.

The way contract jobs operate in US is completely different. Contractors are paid MUCH more than permanent employees as they don't enjoy any benefits and can be fired at will. That is how it should be. If you are taking more risk, you should get paid more. However, in India we have such 3rd party companies (Ma foi is another such I know of) who wants to take a piece of pie themselves. They do get paid very well from client, but in return they don't pay their *so called* employees the same.

I agree with Jaggu about start looking for another job. If you were good enough to clear Wipro's interview process, you deserve to be on Wipro's payroll or any other company in similar area for that matter.
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Old 3rd September 2011, 11:19   #7
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I beg to differ here.
NOT ALL CONTRACT TO HIRE ARE JOKES. There are firms who just for sake of getting ready for any hiring drop-out use this as a contingency plan. I see that in your case you are the unlucky one.

I am a SR. Manager in an IT firm. The contract to hire positios are created based on client resource need. Sometimes due to momentory spike in efforts drive us in getting people hired on contract as the road map is not clear.

I do have resources those were taken on-board after end of contract due to good performance. That being said I do have examples of letting off people or not getting them joined which can be attributes to closure or no approvals or hold.

My suggestion is - never ever quit just for money in despo situation. Never resign with just one offer in hand. Try multiple and never close any door. Check the credebility of hiring firm. Use linkedin or facebook or any other sources to hunt down info on the hiring firm. Take chances considering your risk taking appetite.

Don't worry....there are positions in market...happy hunting and best luck.
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Old 3rd September 2011, 16:57   #8
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Quote:
Originally Posted by Gandhi View Post
The way contract jobs operate in US is completely different. Contractors are paid MUCH more than permanent employees as they don't enjoy any benefits and can be fired at will. That is how it should be. If you are taking more risk, you should get paid more. However, in India we have such 3rd party companies (Ma foi is another such I know of) who wants to take a piece of pie themselves. They do get paid very well from client, but in return they don't pay their *so called* employees the same.
Quote:
Originally Posted by Firebird View Post
I am a SR. Manager in an IT firm. The contract to hire positios are created based on client resource need. Sometimes due to momentory spike in efforts drive us in getting people hired on contract as the road map is not clear.

I do have resources those were taken on-board after end of contract due to good performance. That being said I do have examples of letting off people or not getting them joined which can be attributes to closure or no approvals or hold.
I agree with both these statements, ideally in Europe also contract jobs are paid 30-40% more than the regular employees and renewed(or not) every year. In India its opposite, a stop gap arrangement or when companies dont have the required approvals to onboard more employees to their headcount.

Having said that, its a bit risky in India to move from a regular to third party contract jobs (yes there are direct contracts also) and one should look at those in only desparate situations. And its also difficult to move back to regular employment to a different company.

Yes, people do move from contract to regular but the risk of layoff is more in comparison to regular employees.

Last edited by dadu : 3rd September 2011 at 16:58.
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Old 3rd September 2011, 17:13   #9
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

I have some of my friends who have resorted to contract to hire jobs and they definitely pay a big premium over regular positions. That said there is a lilltle uncertainty regarding these positions since they are purely based on market demand at that moment. if one gets into a long term project then one is safe for a couple of years and earn good income. You have been unfortunate in that one shouldn't venture into these kind of jobs without some buffer or cushion, ideally you should maintain at least one years pay in the bank before you can take these options.

This kind of work doesn't have any problems for fresh grads since they have nothing to lose but experienced people with >5 yrs should be more careful.
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Old 3rd September 2011, 20:31   #10
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Any time permanent position is better. Do not take risks by getting in to C2H mode which purely depends on the company who is going to hire you on contract from your pay roll company. There will be uncertainties as the whole industry is uncertain and fluctuates
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Old 3rd September 2011, 23:23   #11
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

hmm. I agree to most comments here that it is NOT a healthy scenario in India wrt Contract Workers. In my Company, typically we take in contract workers when we there is an urgent need and lay them off when there is no need. Till here, everything is fair.

Now the unfair part comes when you start looking at things like career growth, pay raise etc. Why will the company who took you as a contractor be bothered about your career growth? The company who pays the salary should ideally be bothered, but in most cases, they dont bother as long as their employees are placed someplace, earning valuable money for the company. Unfortunate my friend! I sure hope the situation gets fairer.
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Old 4th September 2011, 09:13   #12
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Contract to hire also has another model (I may be wrong here).
The company who body shops the person, is the company who pays the person his salary and not the contracting company (client).
The client would be paying a bigger amount to the contracting company.

This is the classic case of body shopping in the same country.
Example: A company X hiring a contract employee sourced a company Y in India itself.
So a candidate for the contract hire would be interviewed by X
to see if he satisfies their requirement. Of course he would have been
screened first by Y also.

So the person hired would come to premises of X everyday for work.
But maybe once in a month he has to go to Y (his company on whose rolls he/she is).


Typically people fall for off-shore offers for contract-to-hire positions and not within the country.
Thats because the lure of travel is always there.

The case in question is unique in that sense.
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Old 4th September 2011, 09:31   #13
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

Stay away from the companies like Magna or Ness or Mascot. Avoid them like plague.

NEVER EVER join a company which will bodyshop you to a company in India itself.

Its good that this deal did not work for you. Even if you have had got this deal working then also you would have got bitten in back in the future. One of the first question the recruiters ask is whether you are a permanent or contract employee. If you are a contract employee then the salary offered is lesser.

Brace yourself up and get a permanent job in some company.

Last edited by download2live : 4th September 2011 at 09:41.
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Old 4th September 2011, 11:12   #14
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

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Stay away from the companies like Magna or Ness or Mascot. Avoid them like plague.
OT

Not sure about Magna or Mascot as they are purely C2H firms.

Ness is not in to contractual body shopping. It is purely services company with a very large footprint in India (B'lore, Mumbai, Chennai and Hyd) with more than 2500 headcount and does not outsource.

How I know - no brownie point for guessing why I know


C2H - Other drawbacks
1. once you get salary at premium than industry, it is difficult to get back into the right band.
2. As an employer If I get a candidate who is on C2H, the scrutiny increases.
3. Chances being the candidate may be considered as alternate option than the first option.


Best bet is to get into a consulting position than C2H, is has best of both worlds, high payments and no C2H ghost.
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Old 4th September 2011, 12:28   #15
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Default Re: IT - Contract to Hire / Contract 2 hire jobs ? Beware.. Don't even think about it

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Meanwhile can any senior guys advise what can i do to make sure these guys dont get away with somebody's incompetence at their end ? Can i ask for a compensation ? Can i do somthing else ? Needless to say i am looking for other jobs in the market as i have little faith in their promises.
Heavy_foot I truly sympathise with you and hope you find a way out of the log jam that you are in. As a very senior IT person I can certainly tell you that companies will treat contractors as dispensable without a 2nd thought. I dealt with contracting companies for my projects.

I think there are some lessons for you from this experience. A few words of advice:

a) It is always best to apply directly to IT organisations instead of body shopping outfits. NEVER join a body shopping outfit unless you are out of a job and in an undesirable situation.

b) While I do not want to sound critical I am afraid the lustre of money made you jump without doing your homework. Look before you leap is a by word in today's world.

c) As I said before contractors are dispensable - companies are not liable to keep their word to either the sub-contracting companies OR the person concerned. Project requirements can change overnight and sometimes in a matter of hours. In these tough times where we have a possible recession looming over the horizon nearly ALL IT companies are playing it safe, with hiring freezes across the board OR selective hiring against projects.

d) Do NOT mention names of officials you dealt with either in the sub-contractor Future Focus or at Wipro. If they note that you are voicing your opinion on a public forum you could lose your job.

e) About compensation - I am afraid, it will be only to the extent mentioned in your offer letter from your employer. Unless you are willing to spend money and time on a legal case that could drag on for years. Not worth it IMHO.

I do hope things work out for @ both places you mentioned. In parallel, you may want to apply via known placement consultants and job sites to increase your chances of getting another job. Wish you all the best in your job hunt and this time I hope you get something on the rolls of an established organisation.

Cheers!
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