India's infotech holy cow facing new challenges

The Indian information technology and outsourcing industry, which usually makes news for producing first-generation millionaires and billionaires, is hitting the headlines these days for not so celebratory reasons.

First it was for the arrest of some present and former employees of an outsourcing agency in a financial fraud running close to half a million dollars some months ago. The firm in question handles backroom operations for a leading American bank.

Then came a couple of sting operations by foreign newspapers and television channels on the alleged sale of personal data of customers. And, as if this was not enough, a couple of more cases of data theft were reported by IT firms in Gurgaon, on the outskirts of the national capital.

What caused uproar in the industry a few days ago was the publication of a report on labour practices in the outsourcing industry, particularly call centres that work for overseas clients. It touched a raw nerve of the IT top brass in the country, as was evident from the reaction of the industry's trade body.

What irked industry leaders most was comparing the level of surveillance in call centres to situations close to those in 19th century prisons or Roman slave ships.

The research paper's observation was based on feedback from call centre agents, team leaders and managers working in six units in Noida, and also some from Delhi and Gurgaon. It referred to new technologies being deployed to keep a close watch on workers. The V.V. Giri National Institute of Labour - a reputed autonomous institution of the Indian government on labour issues - had conducted the study.

The findings on labour issues in the call centre business must be looked at in the proper perspective. Outsourcing is relatively a young industry in India - both in terms of number of years it has been around and in terms of average age of employees. It has become the darling of the urban middle class because it provides job opportunities even for arts graduates and those without any prior knowledge of computers or having any professional degree.

Young people also get attracted to the sector because of the relatively higher pay packets they get, as also fancy designations with the 'executive' or agent tag. Other perks include free pick-up and drop service.

The only downside parents of such youngsters and they themselves, in many cases, feel is that they have to work at unearthly hours. Night shifts are a must because most call centres work according to working schedules of Western clients.

While adverse health and social effects of working at night have been reported periodically, for the first time insecurities and vulnerabilities of call centre workers have come to light in a structured study. The reason behind these insecurities is said to be the so-called dualistic model of labour organisation followed by call centres.

In this model, they have core group employees, mostly managers and team leaders who are permanent employees, while the peripheral group consists of workers or agents who are easily substitutable. The inherent weakness of such a model is that it breeds insecurity among employees.

Coupled with other factors such as work-related stress, disruption of biological rhythm of body and a target-oriented approach, this model makes workers insecure and they tend to leave on their own or they are sacked for lower-than-expected performance.

The industry does not accept this finding and feels that workers leave not because of insecurities but because "at any given time, they have three job offers due to the skewed demand-supply position".

Instead of brushing aside new insights by an independent agency, the IT industry should take these as positive criticism. In fact, the end result of every such controversy has led to a positive outcome that has benefited the sector as a whole.

After the sting operations on data sale, Prime Minister Manmohan Singh himself reviewed data protection laws and the process to amend the Information Technology Act was speeded up substantially.

Similarly, programmes to train police in nabbing cyber crimes have been stepped up after the data theft incidents. And now, Kiran Karnik - president of India's software lobby National Association of Software and Service Companies - has announced that a set of human resources guidelines for outsourcing members of the association will be evolved. It is indeed a welcome move.

The outsourcing industry is also facing yet another hurdle - demand for allowing formation of trade unions in call centres and other similar firms.

Again, the industry leaders see no room for trade unions because all grievances of employees are promptly tackled and because all employees have an easy access to the chief operating officer. Yes, this may be the situation now but as the outsourcing firms grow - some of them already employ huge numbers like 20,000 workers - such informal arrangements may not be enough or may not work at all.

In the era of liberalisation, even hardcore trade union leaders dare not talk of having militant movements - such as those witnessed during the days of legendary trade union activist Datta Samant of Mumbai - in call centres. But nobody can deny that there is a room for an employee-led mechanism for redressing grievances. Don't call it a trade union, if you hate the word.

This is particularly important because the IT and outsourcing sectors have been exempted from following some labour laws of the land. Like the tax-exemptions that they enjoy, they have also been granted a "labour laws holiday" by several state governments, in their zeal to attract more investments and greenback. The need for such a mechanism will get more prominent as the outsourcing industry expands beyond metros and the number of smaller players grows.

It is high time there was a reality check in the IT sector. For some years now, the industry has lived in the shadow of dreams of becoming software superpower or knowledge hub of the world. This has bred a false sense of pride in the industry, often boosted by politicians in power for their own selfish ends.

So, any criticism, any uncomfortable question or demands for transparency are seen as part of a conspiracy against the IT sector. This is certainly not a healthy trend for the future of India's information technology and outsourcing industry. The "information technology is a holy cow" syndrome must end.

(Dinesh C Sharma is a New Delhi-based journalist and columnist on policy issues in science, technology, IT, health and media and he wrote this article for Indo-Asian News Service (IANS)