EDS, a global software outsourcing provider, and its Indian subsidiary, Mphasis, are running background verification checks on employees who have joined the company prior to May 2007. Employees who have joined after 2007 will also be covered, in case only reference checks have been carried out earlier. A third party agency, note sources, has been assigned to verify details on the education qualifications and past employment records of employees.
Against the slowdown and the contract pipeline of IT companies coming under strain, employee background verifications can shatter the sense of economic security of employees, said an HR executive. "The fear of being laid off can only be stoked further at this rate," he said. "On the other hand, the industry is even more under pressure to guard against false educational claims and fake skillset certifications being produced by employees."
An Mphasis spokesperson, however, said the current round of employee verifications is a routine exercise carried out by the company on a periodical basis. "It is not linked to layoffs of any sort and is part and parcel of operational procedure," the spokesperson said, dismissing employee fears that a few layoffs are imminent.
The current round of verifications for employees who joined prior to May 2007 is set to be completed by December 17, according to sources. While the EDS-Mphasis combine is said to be dispensing with verification formalities for employees who have been onsite on earlier projects, those who have undergone reference checks by phone will need to undertake a comprehensive background verification this time round.
EDS employees -- who were transferred to Mphasis after the acquisition of EDS by Hewlett-Packard -- are particularly critical of the move. HR officials at Mphasis could not be contacted for comment.
Industry sources said up to 400 employees at EDS-Mphasis, including senior personnel like delivery and project managers and senior managers, have been moved to the bench due to lack of new contracts. "These employees will be moved to projects whenever they are available. In the event of these employees refusing to move citing skillset mismatches or other reasons, they could be asked to leave," sources added.
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An employee with a leading MNC consultancy feared that interim background verifications could be used to carry out a few well-timed layoffs on the pretext of the economic slowdown. "New orders have fallen sharply all around, but then, so have the number of employees being deputed on projects. A good number is being benched from their existing projects, while some are being asked to take on projects which do not do justice to their skillsets," the employee said, adding that refusal to move over to "less prestigious" projects could lead to immediate discharge of the employee from the company.
Wipro and Infosys denied plans to carry out separate background verifications on employees. For now, companies like Infosys have warded off the possibility of layoffs by offering sabbaticals to employees with two years or more of experience. Authentication software developer Verisign is known to carry out its own verification process on the backgrounds of vendor employees joining their projects. The phrase 'Verisign certified' is increasingly finding place on the resumes of many IT employees, giving it a human face far removed from its online transaction origins.
Meanwhile, organisations like the FKCCI and the Bangalore Chamber of Industry and Commerce (BCIC) are giving voice to the impending sense of doom. "Bangalore is particularly likely to witness layoffs in the IT as well as the garment and other industrial segments, including engineering, which will cause severe hardships. Negative impact will also be seen on the manufacturing sector wih consequences for housing, retail, hospitality and the like. The government should seriously consider measures to deal with this problem in consultation with various industry segments," BCIC president N N Upadhyay said at a meeting last week.
"Karnataka could be in a worser position than other states as it is even more integrated globally due to the predominance of the IT industry and its large export base. The global meltdown, the credit crunch in the Indian economy and our dependence on the western markets will only make matters that much more difficult," Upadhyay said.