Team-BHP - The 90-day notice period rule

Hello All!

I wanted to get your opinion on the 90-day notice period rule that many of the companies in India mandate. The system in US is quite opposite - where a person can switch jobs by giving a 2-weeks notice.

This is what my perspective to this rule is

1. Makes the employee locked with the employer as most of the potential employers are looking for candidates who are either an immediate joiner or can join within 30 days time period - a negative point for an employee but a positive one for the employer.

2. On cases where the employee is laid off (due to any reason), this gives an additional cushion to the employee as he/she will be paid for the 3 months at least (let's not talk about the other severance package here) - a positive point for an employee and a neutral/negative point for the employer

The above points are my own perspective - as I have always been an employee and have never been an employer. More points welcome!

Buying-out the notice period
Now, circling back to point#1, let's also talk about the "buying-out" clause.

Not all employers allow this. I recently was reading a post in Glassdoor where an employee had mentioned that his employer is not allowing the "buying-out" option even though he is in bench / without any project assigned to him.

At one end of the spectrum we have employers who give more weightage to the candidates who can join immediately / within a short span of time (read, 15-30 days). And, at the other end of the spectrum, we have employers (probably, the same ones who expect immediate joiner) who mandate a 90-day notice period for their own employees.

What's your take on this?

Do you think a 90-day notice period make sense? If so, how?

Finally, my take:
This makes no sense. Notice period should be curtailed to 30 days!

Cheers!

I think there was a discussion on the "Jobs, attrition" thread on notice periods.

Personally, I think a 30-day notice period is more than enough for most jobs. From my perhaps limited experience across companies in just one industry, the IT industry, I've never seen any meaningful knowledge transfer or transition happen anywhere outside of the last week, irrespective of company size. So I don't see the point of keeping an employee who has already decided to leave hanging around for 90 days.

It's quite obviously a way to discourage people from leaving. Which says a lot about the organization- if the only way they can keep people is to force them to stay. Great place to work indeed!

Also, all the companies that have such policies in place, also usually ask candidates they want to hire if their notice periods are negotiable! Isn't that a contradiction?! If you don't hold the notice periods of other companies as something to be adhered to, why should anyone be mindful of yours?

Finally, at least in IT, this inane policy has come back to bite the companies. Candidates are using the longer notice periods to gain multiple offers and negotiate higher salaries, raising the cost of replacing talent all around.

So, IMHO, it's a badly thought out policy, time to go, make it 30-days uniform, all over.

But, how many companies are doing this now? Are there a lot? I've worked for only one company that had such a stupid rule. And I joined them before they put that rule in place, so I had a shorter notice period on my contract. Everywhere else I've worked, 30 days has been standard.

Having been a people manager, I have gone thru employee resignations. While the 90 day period is almost standard in the IT industry, the system often if not always, has an option to reduce the notice period. If manager selects this, then he has to specify what to do with the notice period. Any waiver or buy-out (adjust against salary) would be done after consultation with the up-line manager and HR.

Personally, where possible I would prefer to let the employee go early. Post resignation, the employee is often not fully dedicated and I'd rather not have such a person in my team. And this makes it easier for everyone - the current company, the manager, the employee and the next company. The employee can even manage a break before he joins the new company.

I faced this headache recently. To give a background, I was with one of the WITCH companies in which employees are forced to go on Loss of Pay post 45 days in bench. The LOP continues even if they are tagged to a project but still non-billable after the completion of 45 day bench period. So employees are under pressure to somehow get a billable role within 45 days.

For those under Loss of Pay and those who resign, the exit is immediate in this organization. I have seen people getting relieved in the evening if they resigned in the morning hours. I have seen people getting released the next day if they had resigned in the evening or night the previous day. On other occasions, it was just a few days post resigning. Maybe, the HR was tasked with cutting down handing over salary for those in bench.

I got relieved in just about 4 weeks from this company recently where the notice period was actually 90 days. I was in this 45 day period and started searching and landed a good role outside. I was tagged to an account and was Non-Billable since account was a fresh win and in initial KT phase with projected start of KT for projects related to my tech stack a good 5-6 months later.
I resigned last week of Feb and was soon approaching the end of my 45 day bench period post which Loss of Pay would start for me. I had no role though I was tagged to a project and was idle and was getting frustrated about not being utilized or not getting released quickly. I shot a mail to account managers and delivery managers and transition team asking if their intention is to keep me 90 days as Non-Billable purely to frustrate me or if they can release me since there is no role for me in the account/project for 5-6 months and there was no point keeping me idle and tagged to the project. They released me from the account immediately.

I was back in practice post release from account and a new mandate in practice from higher management meant that I had to be billable even if I was tagged to practice. So practice was not willing to give any practice based allocation but wanted me to work on a couple of pre-sales and consulting opportunities and handle these projects. Told management openly that I will work only pre-sales/consulting part and was frustrated and under a lot of stress because of their 45 day Bench/Loss of Pay policy that I was in no frame of mind to handle the project or work any further. I finished these proposal bids quickly in a week. handed over to other practice folks and talked to Manager/HR on my situation and got released from the organization in about 4 weeks.

So there is no hard and fast rule, though perception is different outside and organizations bend the 90 days notice period policy at will based on their needs. They don't even pay the complete notice period salary for the employees who have got relieved in a few days time frame which they are bound to pay as per their own policy.

I have had my fair share of job switches and have only come across 1 org that had a 90 day notice period. It ended with a 45 day buyout, 30 day garden and 15 days of work. Best time ever. As a manager, the org did give me the option to relieve my colleagues early provided finance & line head approved. 50% of the time they did approve provided it was justified. The reasons usually were business priorities like revenue loss or loss of job req itself.

In short, it all comes down to how well you convince your current & prospective manager. Give them a reason to stretch for you and they will.

Any notice period more than 30 days is simply an overkill, unless the employee is handling so much that he/she needs to transition in terms of code walk throughs, knowledge transfer and support responsibilities, probably in rare and specific cases only.

Once an employee has resigned, the more the person is expected to stay on during the notice period, the more it tends to hurt employee sentiments and team morale. In companies with more than 30 days notice period, it might be prudent as a manager to try and get all necessary hand over done within 30 days to let the employee go (managers may be able to negotiate this with HR).

My understanding of this policy is this was adopted by services companies to avoid/minimise "billing leakage", i.e. when a employee being billed to a customer resigns, it takes time to find a replacement and get the replacement billed. The 30 days notice period was not usually sufficient and there was typically loss of revenue, so the services companies increased it to 60 days and then 90 days.

In the initial days there was lot of discretion and it was waived of when not required. But later on it became a dogma and waivers slowly became difficult. This spread to some extend to projects/companies without head count based billing and even product companies, where a long notice period makes no sense.

Anyway it came back to bite the companies, as the long notice period encourages employees who have resigned to shop around for better offers and caused wage increase. I have seen companies with a desperate need to fill a position, pay super premium to candidates near the end of their notice period.

Quote:

Originally Posted by hdus001 (Post 5765602)

Just asking as I'm unfamiliar with how this works, what are the employees expected to do to get a billable role, I'd have thought this is the responsibility of the employer, to find clients, win bids/work?

There is a general Resource Management team which works to find projects for employees in bench. Each of the WITCH companies have a different abbreviation for this team but their work is the same. Mostly, they are an incompetent bunch. They have targets of their own and answerable to management and will put employees in some random project or some other tech stack. They just want an allocation done and a credit to them that an allocation target was met.

Employees knowing that they will go on Loss of Pay in 45 days and also knowing how the above team functions, will start reaching out to folks, current and past managers and teammates to find a role. You send your profile internally across different teams and then project based client interviews will be setup. Sometimes, your client interviews would have gone well but Project Managers will reject you because you are at a higher payscale/bigger experience and they are bothered about project margins. If you are going to go into Loss of Pay in 45 days and have EMIs to pay and a family to run, then you would automatically be under stress to get into a billable role and do everything possible to get one.

Quote:

Also, what does tagged to an account mean in this context?

Say, project will start in a month or two and contract signing is in progress, so for things to kickstart, all transition to happen and actual work to start, there will be a period of 1-3 months. The resource management will simply tag the resources to this account/project and will not be bothered if resources are billable or non-billable or if they are on Loss of Pay or not. Account Managers/Delivery Managers also won't be bothered much if junior resources are non-billable and under Loss of Pay. Since, the resources are tagged to this account, they can never try and find a billable opportunity outside since managers won't release them from current project.

Quote:

Originally Posted by callvvijay (Post 5765351)

.

What's your take on this?

I agree with you that the notice period can be shortened to 30 days.

From the employer's perspective, having a 90 day notice period reduces the chances of people switching jobs frequently and helps companies with employee retention. It also gives more time for companies to find the right replacement. In case someone who is leaving has been handling an important client or has been on a project since the beginning, the 90 day period gives companies more time to find a replacement and monitor their performance.

From the employee's perspective, 90 days is a long period and once a person has decided to leave, then slowly transition into the role of monitoring, training, and grooming the new candidate. In many companies, employees have to finish all their pending leaves and can enjoy some family time before joining a new organisation.

Basically, the 90 day notice period is created by employers for their own benefit in case someone is leaving (although they would want the person to join at the earliest when they are recruiting).

Quote:

Originally Posted by callvvijay (Post 5765351)

What's your take on this?

Do you think a 90-day notice period make sense? If so, how?

Finally, my take:
This makes no sense. Notice period should be curtailed to 30 days!

Cheers!

Why stop at 30 days. We should probably keep it at 15 days to 30 days depending on the level of the employee

Top Management - 30 days max
Mid Management - 15 days if individual contributor, 30 days on team lead role
Working folks - 15 days

My firm demands 90 day notice period. But if the team metrics are not good, then you can get booted quickly. The other irritating thing is that one cannot burn their leaves during notice period. Let us say I have 45 days leave accrued, but I cannot take it during notice period or cannot use the credit to reduce my notice period. I still have to serve the 90 days.

Very myopic in its outlook

The 90-day notice period is bad for the employee as well as the recruiter. The number of no-shows we have for joining is something the foreign colleagues can't wrap their heads around. It is high time this is reduced to a more practical figure along with granting powers to the line-manager to relieve a person even sooner.

Company policy aside, many of the mid/low-level managers themselves don't want to relieve the employees, for the sake of billing and the laziness to find a replacement.

Just two years into my first job in a WITCH company, my manager told me that I could be relieved only after the next batch of freshers passed out from their training and joined our project. He suggested I find a replacement myself if necessary. Being naive, I sent out a mailer to the entire BU asking if anyone wanted to move to Bangalore rl:I was pulled up by a senior HR who explained to me that finding a replacement was not my responsibility. The positive outcome of this was that I got to buy back 50% of the notice period, which everyone said was impossible in the beginning.