Senior Wipro Employee about the contribution of IT Employees

I thank you for viewing and forwarding my various posts on our industry. My main intention of writing these articles is to counter the many perceptions and views which outside world has about our IT employees. These perceptions are created as IT employees are not projecting their issues and only views of various IT companies are portrayed to the outside world

This is follow up of my last post on questioning Wipro HR head on job cuts.

I will try to answer various complaints against employees and reasons they are quoting for layoffs:

1)  IT industry growth is in single digit and to cut the cost, we want to send employee who is not performing

I just want to highlight how much employee contributes to the company growth with the data points below . On an average, any IT company bills 30-40 USD for offshore employees and 90 – 110 USD for onsite employees. I assume company spends 15% for additional cost like office space, bench, travel etc.

** It is assumed average offshore salary is Rs 75,000 and onsite salary is $6000. But in recent years, companies want to bring this down by 15% and that’s the reason for removing senior members out of company.

** It is assumed companies bill only 160/175 hours at onsite/offshore. But in many cases, company bills for week end support and extra hours of work

So if a senior employee with IT experience of 15 years with 5 years at onsite and 10 years offshore would have earned the below amount for self and for the company:

1)   How much IT employee earn?
$1154*12*10 years + $6000**12*5 years = $498,480. He will pay on an average $30,000 as tax to the government

2)  How much company earn from one IT employee
$3308*12*10+$5240*12*10 = $771,420 USD. Company will use various corporate tax benefits and in reality, it pays less than $10,000 USD as tax per employee for 15 years.

In a nutshell, IT employee with 15 years of experience working 5 years onsite and 10 years offshore earns Rs 3.24 crore in 15years and pay Rs 50 lakh as tax to Indian and foreign governments. IT Companies on an average earn Rs 5 crore on each employee working for 15 years and pay less than Rs 25 lakh as tax to government

If employee worked for 15 years, he/she already earned more than Rs 5 crore for the company if they are billable for entire tenure. He/she worked with multiple clients on multiple locations using multiple technologies in these 15 years and he helped the company to earn this money.  So if you are saying an employee who has earned Rs 5 crore for the company,  after 15 years suddenly rated low without any basis through appraisal, is this correct way? If he/she survived 15 years in the industry with no client complaints, how all of sudden, company can point performance issue on the employee.

2)  We are moving more into digital and automation. Senior people are not adapting to this learning

Even now, nearly 30% of the projects in IT industry are running in older technologies like AS/400 and Mainframes. If company is moving towards automation, how many training programs are planned and conducted for senior employees. Do you have any case where training is offered to senior employees and they refused to learn these technologies? Unfortunately, automation and digitalization are used interchangeably on all media reports without knowing what that is and where it is used. My point is anyone in the IT industry is to ready learn these technologies and they are learning it and implementing it and if some employees are not aware, we need to have more training programs on this instead of asking them to leave.

3) Senior employees are not ready to adapt to change

If an employee works of 15 years in IT industry, he would have done the following things:

1)      Worked with 5-10 different clients in different domains and different location
2)      Worked on minimum 3-4 technologies
3)      Lived in onsite locations for 3-10 years
4)      Perform various roles (developer/tester, Manager, onsite coordinator, project manager, architect)
5)      Worked on different methodologies

I don’t understand how IT companies create the perception that senior employees do not adapt to change and project this to outside world

The main intention of asking senior employees to leave is to reduce employee salary cost. If IT companies want retirement age to be 40, then retirement benefits to be changed specifically to this department.

Strength of Information technology is their employees only. In case of manufacturing company, any company should spend for machineries, transport, land space, factory setup and all other additional cost. IT is the only sector where even if we send one of the employee to client location, company will get money. So punishing employees in the name of “asking to leave” is eating the flesh. If this continues, employees will have always fear IT companies and this decrease the loyalty of employee/employer relations and if finally affects the industry overall.

– Senior Wipro Employee