Of the Melt Down & IT Jobs

Nasscom, Subroto Bagchi, November 23, 2008

The first time ever the Indian IT industry tasted a downturn was in 2001. That is when 9/11 sealed the doubt over whether the dot.com and telecom busts as well as a recession were all real. At that time, at MindTree, we were a less than 500 people. We did two things immediately: the internal board took a 25% salary cut and everyone else took a 10% cut. Those steps were not enough. So, we seriously considered asking the “bottom 5%”, formally assessed as “non-performers”, to be let go. That was when we had a lesson in people caring. The middle-management team walked in to Chairman Ashok Soota’s room and said they were willing to volunteer an additional 2.5% reduction in salary so that the bottom 5% could be retained until the market rebounded. Their logic was simple: do not let go of poor performers at a time when jobs are difficult to come by in any case. We listened to them and we all survived.

There are many messages in this story. One, tough times are about shared pain. Two, when the pain is shared, the bond that ensues is the greatest return on investment - we retain that middle management even nine years after! Finally, there is the inevitability of non-performance and there is an economic consequence of carrying it. Non-performers must be let go. The issue is timing. It is a known fact that in every single company, across industries, there are at least 5% people who do not pull their weight or cannot. Sometimes, this is because of attitudinal issues, sometimes the problem is lack of competence and yet sometimes, companies have hired wrongly. There is no way a customer or an investor can pay for them. In good times, they are invisible, in bad times - they appear like mangrove bushes in low tide.The best thing about being in the bottom 5% is that you really know that fact.

The greatest favor you can do to yourself is not sit there to get the bad news: accept the reality that this job, this company, this career is not for you. Get out and do something else - it may mean a salary cut, a social ignominy for a while, but I can tell you that it may be the greatest move in your life to brace reality and rebuild your career. When 9/11 happened, I personally know a head of Human Resource who actually re-started life as a “handy man” - he was good with tools - over time, he added a realtor and a placement business. He started off slowly but with patience and self-confidence, even after the tide returned, he did not go back to be a mangrove bush. So, rather than lament, ask very hard-hitting, fundamental questions: who are you? What are you really good at? What is your passion? What is that one thing you could really excel in? It is not going to be easy, you rather have your old job - but know what? If it was not this downturn, the sheer fact that your bosses at work think that you are not a performer is a disgrace that would kill your self-respect. So, why seek kindness?

Now to the trigger-happy organizations that use a hire-and-fire mindset that and pull the plug than build shared pain: know that this winter is not going to be your last. People will remember what you did to them and if you did things without sensitivity, care and concern - remember that getting rid of people always leaves behind residual toxicity and it damages the hand and the heart and the head of the organization. Make sure, you have exhausted all means before you take up the easiest option. Communicate transparently, involve everybody, explore other cost cuts, ask people to do alternate things, consult your customers and suppliers, and retrain people. Finally, if you have to let go of some people, for Heaven’s sake, don’t ask the HR folks to show them the door. Line managers must know that this one is their job. Only when line managers get involved, fairness returns.