Although news about India’s IT sector is generally positive, the recent controversy around IT businesses firing employees for moonlighting has broken the trend. For those who are unaware, moonlighting refers to full-time employees who simultaneously take up other work. While some IT leaders have taken a harsh stance on the practice, I believe that the issue is much more nuanced than employees wanting dual employment or IT firms demanding loyalty. In this blog, I want to talk about how moonlighting is affecting the Indian IT sector and why there needs to be greater transparency between IT professionals and their employers.
Moonlighting: The Controversy In India’s IT Industry
Let’s start with a brief timeline of what happened: Infosys, the second-largest IT firm in India, sent an email to employees on 16th September 2022, warning them not to engage in dual employment. Less than a week later, Wipro, another Indian IT giant, fired 300 employees for moonlighting. Rishad Premji, the chairman of Wipro, even Tweeted about it, calling the practice “cheating – plain and simple.” Amidst this, India’s minister of state for Electronics and Information Technology, Rajeev Chandrasekhar, called out IT businesses saying moonlighting was an acceptable practice. He stated, “This is the age of employee-entrepreneurs and companies must now understand there has been a structural shift in the minds and attitudes of the young Indian tech workforce.” In his opinion, moonlighting was indicative of the entrepreneurial drive of younger individuals in the IT industry.
Having worked with several young professionals from the IT sector, I can certainly understand the psyche of employees practising moonlighting. It shows their desire to earn higher wages and financial stability in exchange for offering their in-demand skills. With a majority of IT professionals still working from home post-pandemic, they have more time and bandwidth to take up other work. According to a survey by Mumbai-based Kotak Institutional Equities, about 65% of IT employees said they or someone they knew had been moonlighting or pursuing part-time opportunities while working from home. So, why are IT businesses cracking down on moonlighting so seriously?
Well, India’s IT industry generated $227 billion worth of cash influx in 2022 (which is about 7.4% of the country’s GDP!) as they are the first choice for outsourcing and offshoring IT operations. India’s share in global IT offshore revenue has been more than 50% since 2009. I’m confident that this is partly because we have a productive, reliable and skilled IT workforce. Another reason is that we have a cost advantage over developed nations such as the United States and Japan. Think of this: the estimated average for hiring a talented Indian developer is as low as $15 per hour, whereas one from the United States could cost an IT company between $50 and $80 per hour.
While the Information Technology minister was right to say that moonlighting was a common practice in global IT workforces, it leaves the Indian IT sector vulnerable, which is still struggling to regain the productivity and output levels it had before the pandemic. The practice of moonlighting might distract employees from focusing on their full-time job, leading to a further dip in productivity. You don’t need to look further than Infosys’ income tax e-filing portal launched in 2021, which was riddled with glitches for months. Uncharacteristic of Indian IT benchmarks, right?
To make the issue worse, IT professionals who moonlight for competitors cause additional damage to IT firms that are already struggling. Wipro claims that the 300 employees they fired were doing the same; to quote their chairman Rishad Premji again, it was a “complete violation of integrity in its deepest form”. Looking at the bigger picture, the IT industry simply wants to retain India’s superiority in global outsourcing and offshoring operations. The way the situation is breaking, emerging IT destinations such as the Philippines and Vietnam will quickly become preferred alternatives if we cannot deliver the required productivity and output.
Yet, a vast majority of IT professionals have given their support to the movement. There is no explicit rule in the employment-related sections of the Indian Penal Code (IPC) that prohibits individuals from holding two jobs at once. Hence, it is up to the employer to specify an ‘exclusivity clause’ in their contract that states dual employment is not permitted. For entrepreneurs or freelancers, this poses a challenge. If a full-time IT professional creates open-source projects or monetizes a YouTube channel about IT practices in their free time, it should not constitute a breach of their employment contract.
This is why I’m of the opinion that moonlighting cannot be outright abolished as it stifles the entrepreneurial spirit of the younger workforce. IT professionals should be able to work on side hustles or passion projects, as long as they are able to perform their full-time duties. With the rise of the hustle culture, more employees than ever are looking for new ways to generate income – IT workers are not exclusive. While maintaining the efficiency of Indian IT professionals is critical, it cannot be at the cost of employees’ freedom to create new revenue streams.
Summing It Up
I believe that the moonlighting issue can only be addressed by a change of attitude in employees and the IT industry. While working for business competitors cannot be tolerated, I think employees should be able to work on personal projects within the IT space, as long as their employers are in the know. Higher transparency from IT employees who want to work on solo ventures in their free time is crucial to prevent the risk of low productivity at work. This way, learnings from personal ventures and projects might also translate to better proficiency and problem-solving opportunities at work.
Moreover, to reduce the tendency for moonlighting, IT businesses need to motivate and incentivize employees to grow and learn within their ecosystem. This might be in terms of better compensation, flexible work schedules or other benefits. Most of all, IT professionals should be encouraged to develop their own ventures and side projects. Promoting an entrepreneurial mindset will benefit not just the employees, but the IT industry and the Indian economy too.
