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The notice period Dilemma

Updated: Jan 19





The Great resignation fuelled by the work from home phenomenon has led companies to take drastic measures. In order to retain talent, companies have either increased the notice period or over indexed resources to safeguard their position. They have doled out unusual goodies and compensation packages to attract and retain talent. On the other hand it introduced a lot of remote/ work from home options and flexible work options that have significantly helped work-life balance.


Now, envision a 1 month notice period, the market will have a lot of readily available resources. Candidates will have less time to shop for multiple offers, less time to drive down the morale or disengage other employees. We can have a focussed short duration knowledge transfer and also keep recruiting costs low. Finally, it also keeps compensation levels at check.


The long notice period of 2 or 3 months in India versus 2 weeks in the US had a counter intuitive effect for organizations. Morale of well engaged employees suffered as people who were leaving had several options to choose from. They had offers with unusually high compensation thereby encouraging others to look out. Some of the disengaged and exiting employees have done more harm than help to meet deliverables while they were serving their notice period.


Prospective candidates had all the time in the world to shop for multiple offers and helped them raise the market level compensation sometimes higher than what the role is worth. This led to a lot of no-shows and created an artificially inflated compensation structure that companies had to pay to get resources and that in turn led to employee dissatisfaction within. The result has been a constraining of the market supply and demand dynamics. In general this drove a decline in employee satisfaction.


Summary: All companies in India should move from 2/3 months of notice period to 1 month and thereby create a dynamic talent pool.


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