Does the Indian IT industry need trade unions?

Being leaders in compensation and benefits, collective bargaining for wages is a non-issue in the IT industry, notes Shyamal Majumdar. 

You can't blame trade unions for their desperation to gain a foothold in a sector that employs over five and a half million people. 

That explains why every single trade union grabbed the opportunity to be a part of the lay-off drama involving Tata Consultancy Services (TCS), India's largest information technology (IT) company. 

It was a well-orchestrated drama, no doubt, as the lay-off figures that were being talked about in social media were in the range of 25,000-30,000 (about 10 per cent of TCS employees). 

In a belated move, TCS called the bluff by saying that the actual number of "involuntary attrition" would be around 1 per cent, which is marginally more than similar exercises in the past couple of years. 

TCS could have avoided much of this mud-slinging by taking such proactive action in the form of a definitive statement much earlier. 

Job losses are a highly emotive issue in a country where the safety net amounts to zilch, and should have been handled more carefully. The company did make a mistake by treating it as an emotional outburst of a few employees. 

While that is something the TCS brass should figure out, the question is: does the Indian IT industry need trade unions? The answer should be in the negative and here's why. 

Trade unions are required to prevent exploitation of workers, ensure better working conditions and increase collective bargaining for wages. But IT firms are leaders in compensation and benefits.

According to figures provided by payscale.com, the median salary of software engineers is Rs 4 lakh per annum and of senior software engineers Rs 6 lakh. The same for IT consultants is Rs 7 lakh and project managers Rs 12 lakh. 

In comparison, the median salaries for civil engineers is Rs 3.5 lakh, electrical engineers Rs 3.34 lakh, finance analysts Rs 3.26 lakh, sales and marketing managers Rs 5.34 lakh and general physicians Rs 5 lakh. 

In addition, India's IT firms do make consistent efforts in keeping the workforce employable. 

For example, large Indian IT firms spent Rs 4,000 crore (Rs 40 billion) on training last year and there are continuous learning programmes through the online medium. 

It's also a reality that tech firms are in the business of innovation and hence the need for new skills keeps changing. 

While Oracle/SAP/mobile tech remain popular, the industry now needs user experience or UX engineers, big data, cloud engineers, process engineers, Python/Ruby programming and proficiency in HTML5. 

According to Tech Pro Research, "Working in IT today… the pressure is on to have a diverse knowledge set. This spells promise for IT pros who can leverage a broad skill set and move among groups or companies to exercise their talents." But a study by the firm says 59 per cent of the surveyed candidates felt their skills were not current. 

This demand for new skills from employers is something that IT sector employees have to be alert about. 

If after a few years of experience, you can't be inducted into leadership or project management roles, you add no better value than a new entrant, even though your salary is many times higher.

For example, many "senior developers" now do the work of a junior consultant. But that's when the problem starts, as companies, in their bid for cost efficiency, will look for a fresh recruit who can come up to speed with a little bit of training. 

It's a fact that most industries that failed to keep up with modem technology declined and ultimately failed; whereas industries that kept up with modem technology survived and many of them expanded.

In the former, workers lost their jobs; whereas in the latter, some lost their jobs, some lost their skills, some lost both their jobs and their skills, but many were retrained and most retained their employment.

Moreover, as the industries expanded, and new industries emerged from the new technology, new skills were created and employment expanded. 

However, for the IT industry as a whole, the TCS saga is a wake-up call. As the scale of employee lay-offs becomes bigger, the ramifications will become bigger as well. 

The industry thus has no option but to reorient its HR strategies (counselling of consistent under-performers, for example) to counter such mass resentment. 

Keeping quiet till it's too late can't be a permanent solution.