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Recently Indian IT major Wipro was in the news when Chairman Rishad Premji announced that 300 staff were being laid off for “moonlighting”. The move sparked a furore, and Premji received several threatening emails for the decision. However, other IT giants including Infosys soon followed suit, issuing stern warnings to personnel of dismissal after an internal audit.
So what is “moonlighting” or “two-timing” that has made these companies see red and go as far as termination of employees?
Despite the vaguely sleazy overtones, the words “moonlighting” or “two-timing” refer to a situation where an employee of firm A works simultaneously for firm B — possibly even a competitor to his/her current employer — and earns two salaries. The issue in Wipro came to light when one such employee provided his Unique PF number to the new employer. The PF office then raised a query since the account was receiving PF from two different employees, which is a violation of existing regulations.
While the issue seems to be one of integrity with employees cheating their employers by working for another firm, the issue highlights several ambiguities that expose the systematic failure of basic governance in IT companies and their failure in adhering to integrity with respect to their internal processes.
“Moonlighting” or “two-timing” refer to a situation where an employee of firm A works simultaneously for firm B — possibly even a competitor to his/her current employer — and earns two salaries
For some time now, any hiring for an Indian IT major involves an elaborate background verification done by external manpower consultants. The verification process tracks at least three past jobs held by the candidate and the situations under which s/he left a particular company. This has become almost standard practice for most IT hires.
How then did so many employees manage to hide their tracks?
Pandemic fall-out
The fact is the companies themselves are to be blamed for their complacency. During the Covid pandemic and subsequent multiple lockdowns and economic slowdown, companies set out to cut costs. One such measure was the ubiquitous WFH or Work From Home option that allowed resources/staff to work remotely, saving considerable operational costs for companies. Many firms also used the pandemic as reason to downsize and lay off people. However, this process was accompanied by simultaneous hiring as companies snapped up skilled personnel laid off by rivals though at much lower costs. Workers given the pink slip by one firm were more than willing to sign up with a rival amid the pandemic-induced crisis.
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However, not surprisingly this generated a lot of churn in existing projects and operations. To ensure that they had enough personnel on board to handle clients and targets, companies eased up on processes to ensure quick hiring.
The employees, who faced considerable insecurity amid this churning and revamp, but had sought-after skill sets, used the hiring loopholes to ensure alternate revenue streams amid the uncertainty, hedging their bets against another sudden lay-off. It seemed a win-win situation as the IT companies who hired them were also not too concerned about verifying their status as they needed resources to keep their operations running without disruptions.
The fact is the companies themselves are to be blamed for their complacency. During the Covid pandemic and subsequent multiple lockdowns and economic slowdown, companies set out to cut costs
When the PF office blew the whistle on the issue, companies were left red-faced and blamed unscrupulous employees for their own complacency.
The racket also highlights a larger and older problem within the Indian IT services sector of dual billing, shadow resources etc. When the occasional Client notices a slip up and raises concerns, it is blamed on mistakes by personnel or the system and quickly covered up.
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Often in the past while preaching corporate governance, the managements of IT giants have been less than above board in their own operations. A stark case in point was Satyam which at one time was spearheading the Corporate Governance bandwagon but was involved in a major scandal rigging its balance sheet.
Unless the Indian IT services sector and its parent body, the NASSCOM, come out clean on these issues, it is sheer hypocrisy to blame employees for the crisis.
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