The reported over 'Rs 100 crore' bribe for jobs scam uncovered in the Tata Consultancy Services Ltd (TCS) not only impacts its reputation, it would also have an Indian IT industry wide impact and some cleanup has to happen, said experts.
Experts said the TCS bribery for jobs scam would create doubts not only in the minds of its clients but also in the minds of other clients of Indian IT majors about the quality of people working on various projects.
The scam would also help clean up the human resource recruitment system as the staffing companies blacklisted by TCS are major suppliers to many large Indian IT companies.
Simply put, some employees of TCS accepted bribes from staffing companies and hired workers -- bribes for jobs. According to a news report, the scam has been going on for some time and the amount involved is around Rs 100 crore.
According to an industry official, the amount of scam is possible depending on the size of the company.
"For a $1 billion turnover IT company, about 60 percent of the manpower costs are $600 million. And 15 percent of the staff are contract employees, which is $90 million per year. Even a one percent bribe is huge," said CIEL HR Services Pvt Ltd, Managing Director and CEO Aditya Narayan Mishra told IANS.
Bangalore based CIEL HR Services is one of the leading Human Resource Services Company.
Be that as it may, TCS in a regulatory filing said on receipt of the complaint (from a whistle blower as per a news report) it had launched a review to examine the allegations in the complaint.
Based on the review :
(1) this does not involve any fraud by or against the Company and no financial impact;
(2) the issue relates to breach of Company's Code of Conduct by certain employees and vendors providing contractors;
(3) no key managerial person of the Company has been found to be involved.
The company said while skirting the issue of action taken against the employees and the vendors.
According to reports, the company has blacklisted a couple of its human resource vendors and sacked some employees.
"Some staffing company names are going around as blacklisted by TCS. The vendors supplying people to TCS also provide people to other major Indian IT companies. Those IT companies will have to check their hiring process," Mishra said.
According to him, the underhand dealings are generally done by small time human resources companies in respect of middle level contract or short duration employment.
"Companies go for short-term hiring because of (1) non-availability of skill sets in-house and (2) short duration of the job. Big companies have 10-20 per cent on contract," says Mishra.
In the wake of the TCS job scandal, the Indian Staffing Federation (ISF) with over 120 members in a statement said it has a robust due diligence process that precedes the acceptance of any staffing company as our member."
"We urge all stakeholders, including corporates and the Government, to consider engaging staffing companies that prioritize ethical employment practices and regulatory compliance," the ISF said.
The job scandal in TCS may be a major one but inducements to HR officials of corporates by private educational institutions has been there for a long time.
"It is true some second rung educational institutions do entice HR officials of corporate to send their teams for campus placement," Mishra said.
Be that as it may, TCS has to manage the damage to its reputation owing to the bribe for a job scandal.
"If the value of bribery suggested in this particular case is true, it certainly seems to indicate that it is a major corporate governance issue and needs to be addressed as part of mitigating brand reputation," a senior consultant told IANS.
"This scandal has tarnished not only TCS, but the entire ecosystem of HR recruiters and agencies used. Old whispers in corporate corridors are solid evidence today. This is not a TCS problem alone. TCS has made it public. . Let's respect transparency here," said brand expert and Harish Bijur Consults. Inc founder Harish Bijoor told IANS.
