Once upon a time, the notice period in companies in India was 30 days [yes it was!!]. The attrition was different than what it is today. Someone somewhere thought that a good solution to reduce attrition is to increase the notice period to 60 days. And so they do it. They see a bit lesser attrition for some days – maybe months. Then another company increased it to 60 days and soon almost every company increased it to 60 days. The attrition levels, creeped back to where it was earlier. Then someone somewhere thought that a good solution to reduce attrition again is to increase the notice period to 90 days. And so they did it. History of attrition repeated itself and today we are seeing a high attrition rate even with a 90 days of notice period.
The original objective of reducing attrition has fallen flat. Discouraging employees to find a new job with a long notice period in the current job is no longer a deterrent.
Another reason for 90 days of notice period is – to ensure that a backfill is hired before this person leaves and there is no HC gap. In reality this never happens. The notice period meter starts immediate after the resignation. A few weeks go away in discussions and convincing not to go. Then a new Job Req is created and the hiring process starts which can take anywhere between 4 to 6 weeks to make an offer. Then the 3 months of notice period. By that time the employee is already gone!! So this objective is also not achieved Another reason is to do project hand-over. Does it really need 90 days for a project handover. May be a week or 2 and for very complex projects it may be 3 to 4 weeks. Any project or knowledge transfer requiring a 90 days handover would be rare. So this objective is also not a real one! Discourage the employee from finding a new job by putting a long notice period. Almost every company has now done the same and almost every company now waits for 90 days. So discouragement by a long notice period has failed as well. Any other reason for a long notice period? Write in the comments please. The 90 days of notice period - Who is it helping? – Definitely not the company! In my experience I have never seen any employee complaining about the long notice period. But almost every company does complain about the long notice period.
When someone decides to leave, then the person will leave irrespective of the duration of notice period. [of course some actions can be taken to revert the resignation period – but that is no way linked to the duration of the notice period] The person looses at least 50% of interest in the job from the day of resignation and this disinterest grows more and more with each passing week. Why keep a disinterested employee on the team. Here also there are exceptions where someone is really professional and is committed to the job until the last day – when this happens then introspect why such a star is leaving and do everything to prevent this specific attrition. The employee on notice period creates negativity with the team members by talking about the new salary, how cool the new company is etc. etc. on a daily basis. This disturbs the productive equilibrium of the team. Yes you can argue that such people should be taken to task, but these disturbances by the disturbed employee do happen – if not explicitly then subtly! The resigned employee may also target some of the existing colleagues to refer them to the new company. And you need to be prepared for more attrition. Yes the same person can join the new company and then pull in more people from the old team, but that is different than poaching from inside versus poaching externally. All the above points are impacting the existing company where the employee has resigned. In quite a number of cases this long notice period of 90 days is impacting the new company as well where this employee has been hired. During this 90 day period, the employee starts to look out for more job offers. Other companies look for such candidates who are on notice period and are then ready to pay more than what the offer that the employee has at hand. The employee command extreme premium in the last weeks if the notice period. So some other company just poaches the employee away and the company which made the first offer waits for 3 long months and finds that the employee is not joining. And then the whole hiring process starts all over again. WHAT A LOSS of time and effort!! So you can see these long notice period are DEFINITELY NOT helping any company – though someone intelligent someday projected it as a company friendly move – sorry it is not. Well after this long story the point I am making is “REDUCE THE NOTICE PERIOD TO 30DAYS”. Small and mid-sized companies making this change may not be fruitful and actually might be hurtful to their business. It has to start from the big market players whose employee count is in several thousands and their actions make the markets move. This can happen only when big companies like Tata Consultancy Services, IBM, Infosys, Cognizant, Wipro, Accenture etc. make a change. Industry bodies like NASSCOMM should discuss this and encourage member companies to have a serious thought and advise them to reduce the notice period to 30 days. A 30 days-notice period is a WIN-WIN-WIN situation for the Employee; Current Employer and Future Employer.