Decoding 'Notice Period'

Notice period is one of the least fret upon topics in the entire recruitment process; on the contrary, it can be an important aspect that impacts various stakeholders in multiple ways. Whether it’s a layoff or voluntary resignation, policies of most organizations and local laws dictate the need to serve a Notice Period.  

Generally, the organisations tend to go for a ‘One size fits all’ approach and etch a Notice period for the entire organisation, without considering the fact that it can change from role to role. Rather, it should!

What should an ideal ‘Notice Period’ be? 30, 60 or 90 days?

In many ways, seen or unseen, it impacts 4 parties – the employee  transitioning from one organisation to the other, both the employers –current and new, and the recruitment / executive search  firm involved. How it impacts these stakeholders also depends on how ‘long’ the Notice period is. While longer Notice periods may make sense for certain senior executives roles, in most of the other situations it may end up disturbing the (job) market for the other expectants and even the organisations who are looking to recruit.

Over my years of experience, I have observed that while other countries have shorter Notice periods, more than 80% of the organisations in India opt for a 90 days Notice period. Some of the obvious reasons ‘stated’ behind keeping a longer Notice period are robust knowledge transfer, effective handover and accounting for the time to find a suitable replacement. While these are all relevant elements, they may not require 90 days in all cases. Yet whether it requires 90 days or not, the organisations will still end up consuming these 90 days because our minds are trained to pace out a process in a given time frame. The more time we have to carry out a process, the more time we’ll take. This essentially means Notice periods for most employees are wasteful. 

While 90 days is most seen, a probe into reality says otherwise. We recently conducted a Linkedin survey asking over 850 senior professionals their opinion on the ideal duration of a Notice Period. 82% senior professionals agreed that 30 day is the ideal as compared to 60 or 90 days. 

Dissecting the 90 day Notice Period 

The productivity of an employee in the Notice Period has different stories attached to it. A Notice period that runs a quarter long can be chosen only when the organisation is able to justify it with equivalent work’s worth. Unless that is taken care of, the organisation can easily preempt different shades of the leaving employee’s productivity. If an employee is trying to switch, then a three-month-long Notice Period can be very tedious when a lucrative role is open in the market. 

It’s also imperative to cognize the psychological mindset of the employee after they hand in their resignation letter. The lack of a smooth exit plan from the organisation can not only cause their productivity to plummet, but it also allows the employee in question to unconsciously create discontent  around other team members. 

We also cannot ignore the fact that candidates who are already serving their Notice Period or the ones with shorter Notice Period are preferred by hiring organisations over the ones with higher and / or non-negotiable Notice Period.

The clamour for a shorter Notice period  seems to be growing. Recently, 24,000 IT Employees united to demand a 30 Days Notice Period Instead Of 90 Days in a petition on Change.org. 

What it means for Organisations and the Market

A longer Notice Period also gives an opportunity to the candidate who has accepted an offer, basis which he’s already resigned, to again look for more or better options. This way the market gets distrubed as multiple open positions are occupied by one candidate. 

Eventually the candidate may just end up ‘negotiating’ with his current employer to match or better the highest offer (in terms of salary), if the employer wants him to continue. As far as the other organisations are concerned, they are left high & dry when this candidate eventually doesn’t turn-up on the date of joining.

This easily disturbs not only the organisations in question, but the whole market, as multiple open positions are vied for  by one candidate, at a given time. 

There are also instances where the organisation begins finding a replacement only towards the last stages of the employee’s tenure. Hence a straightforward and brief exit is a win-win for all, as it eliminates delays from both the ends.

Arriving at the Ideal Notice Period Duration

The discussion about varied durations of the Notice-period, depending on both contract type and role level, has existed since long. Organisations must ensure robust Talent Management / Pipeline to take-over roles that become vacant, in the shortest time possible. 

A cookie cutter approach is definitely not the best where most of the employees across different Functions / Levels have the same Notice Period. It should ideally vary according to the Level / Seniority of the Position in question.  The thumb rule here is: the shorter it is, the better.

A major component of a successful exit plan is getting a suitable replacement in place, at the earliest, to balance out any gaps. This is where search firms and HR teams can largely affect the entire process. By having a ready talent pool, and managing candidate relationships, recruiters can pivot the process and ensure realistic timeliness across both parties. 

As technology continues to advance, many companies are taking a modern approach towards acquiring and engaging with prospective candidates. Zappos, an online retail company asked interested candidates to join their “Zappos Insider” network and interact with the company. This not only allowed the company’s recruiters to have a pool of candidates at-the-ready when new positions opened up, but also kept chosen candidates warm. 

Summing Up

• It’s time to bring about a change in the ‘standard Notice period’ and adopt a more practical/pragmatic approach. This will ensure lower cases of ‘offer dropouts’ or ‘no show’ on the date of joining
• One size cannot fit all – Its imperative to identify the right Notice period as per the roles and its technicality/complexity.
• Innovative ways to build and maintain the talent pipeline is the new necessity and the key to efficient transition planning. It’s a change which will help the organisations drive productivity & talent. At the same time it will help the candidate spend his time and effort on meaningful activities rather than being strangled in stretched decisions and unproductive processes.
• Candidates must negotiate shorter Notice periods when discussing their offers with prospective employers 

Amit Kohli is the Associate Vice President at Catenon India.

He has expertise across sectors including Chemicals, Life Sciences (Pharmaceutical, Medical Devices & Biotech), Agriculture, Pumps & Valves, Building Materials, Automotive amongst others. Amit holds a Masters degree in Business Administration from University of Pune, and a Bachelors in Computer Application.

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