Flipkart has announced that it will be moving 300 of its employees to Serco, a company that specializes BPO operations. This move has not gone down well with the employees, many of whom are reportedly mulling quitting over this transfer.
“Why should I work for a BPO?”, the Bangalore Mirror reported a former Flipkart employee as saying. The unnamed employee has the choice of either quitting or joining Serco. “I’ve worked with Flipkart for 2 years, and working for a BPO now feels nothing short of a demotion”, the employee said. Most of the transferred employees are from the marketing team that interacts with sellers.
Employees fear that working for a BPO will reflect negatively on their resume. They also believe that they will no longer be able to avail the perks that Flipkart offered them, such as cab services and flexible timings. Flipkart has grown rapidly since its inception in 2007 and currently has 33,000 people on its payroll.
“Flipkart’s decision to outsource few roles is a strategic move which will help us scale faster and also grow the partner ecosystem around us,” a company spokesman said. “We believe that realigning the organisation to business priorities is critical for keeping pace with the dynamic environment that we operate in.” Flipkart has also offered a 10% pay hike to all the transferred employees.
Transferring out noncore employees to the payrolls of a back-office outsourcing company is common practice in the information technology industry. “When a company has too many people on its payroll, it gets difficult to handle from the compliance perspective,” said Vaibhav Parikh, partner at law firm Nishith Desai Associates. “For example, PF, insurance, gratuity, etc., takes a lot of effort from the HR perspective.”
“Once employees are on an outsourced payroll, they don’t appear in the books of the company and, in turn, the revenue-per-employee is much higher, which is an important metric for companies,” Parikh said. Such outsourced employees also don’t get stock options either.
Flipkart, which was once the dominant player in the Indian ecommerce space, has been facing increasing heat from rivals like Amazon and Snapdeal. The company has also been in the news for its high-profile hires, which have included big names from Silicon Valley.