Will IT firms become complacent without hire-and-fire policy?

SMEs will be crushed by the norms
The information technology (IT) industry in India is young, dynamic and though grown phenomenally, it is still volatile. The IT industry has not reached maturity to adhere to the labour laws. The industry employs large number of white-collar workforce and is flexible in scaling up profitability in any situation.

The labour problem in the industry is not one-way but two-way. The removal of hire-and-fire policy will be more challenging for the multinational companies (MNCs) operating in India as they have a tight control on profitability and the number of employees.

The typical Indian IT companies, compared to MNCs, do not ruthlessly follow this policy and are comparatively slower. Generally IT, companies are labour intensive where
the attrition rate is high and employees themselves hop jobs for better opportunities. In my opinion for small and medium enterprises (SMEs) Indian registered IT companies, which are very high in number in the

Tier-II cities, the standing orders need not be very stringent. Instead, the Industrial Employment (Standing Orders) Act, 1946,  should be applicable to those IT companies that hire 250 employees and not just 50. The SMEs will get crushed by the norms as well as the high attrition  rate in this industry.       
Prashant Pansare, CEO, Inteliment Software Technologies

IT is competitive compared to others
There are many pros and cons if the IT employees are brought under the Industrial Employment (Standing Orders) Act, 1946. The IT industry is a very competitive business compared to other industries.

I think if the IT employees get the benefit of labour laws then associations will be formed and there could be strikes and protest, which will affect the IT industry. These job security measures can also affect the quality of work. As of now, the IT employees are showered with various in-house benefits to curtail the attrition rate in the industry.

I think these standing order norms will be more painful for the employees in the long run. Also, companies do not fire employees without a valid reason. Even during recession, the best performing employees were retained by the companies.
    Vikram Pendse, IT professional

We follow standard in-house policy
Those joining the IT industry are direct employees. Implications of employment rules differ from industry to industry and as an IT industry, we follow a standardised in-house policy.

The IT industry is performance driven and I don’t think it is possible to make it adhere to any strict employment laws. The government has to re-look into the matter before taking any step because performance standard is a important criterion in our industry.      
Anuradha Duttagupta, Director-HR, Ideas-SAS Company

IT firms have always given importance to employees
The IT industry has a track record of retaining good employees. The IT companies have always maintained high working standards and have always given importance to whatever benefits the employees.

Right now it is too early to say whether the IT companies should continue to be exempted from the norms of the Industrial Employment (Standing Orders) Act.
Ganesh Natarajan, vice-chairman & CEO, Zensar

Artificial measures will affect business
In my opinion, the government must not bring the IT industry under the norms of the Industrial Employment (Standing Orders) Act, because the industry is into professional competence work culture where it is all about survival of the fittest.

Such artificial employment security measures will affect the IT industry in a bad way. It will not have much effect on the large companies but SMEs and start-ups will surely see a dip in the profits. If the government wants to experiment then try it out on the huge companies and spare the SMEs and start-ups.

Over 70 to 80% of software companies in the country work on global outsourcing contracts wherein they have to sign an agreement with the overseas company that specifies high performance measures.

The employees are also made to adhere to these measures to ensure competitive levels and quality of services. The global performance standards are stringent and those employees who fall short are either demoted or transferred to other projects.

But companies use termination as the last resort. IT companies follow People Capability Measurement Model (PCMM), which makes the HR-Talent process well-defined and job projections for employees very precise.
Deepak Shikarpurkar,  entrepreneur & chairman, IT committee, MCCIA