Outdated labour laws and red tape strangle growth of IT-BPM industry | Sunday Observer

Outdated labour laws and red tape strangle growth of IT-BPM industry

21 May, 2023

Information Technology and Business Process Management (IT-BPM) industry in Sri Lanka, is the fourth largest foreign revenue earner for the country. In 2022, the industry brought US$ 2.1 billion to Sri Lanka.

The IT-BPM industry employs around 150,000 people and the indirect employment opportunities it generates is close to 250,000. Out of the 150, 000 direct employees, around 80, 000 are taxpayers. The IT-BPM industry aims to provide increasing opportunities to attract future talent into its knowledge-based workforce.

The Sri Lanka Association for Software Services Companies (SLASSCOM) is the national chamber for the knowledge and innovation industry in Sri Lanka and acts as the catalyst of growth in the IT-BPM industry. SLASSCOM does this by facilitating trade and business, propagation of education and employment, encouraging research and innovation, and by influencing a national policy framework of value to the industry.

SLASSCOM has over 200 member companies with a 40,000+ employee base. The SLASSCOM Board supported by the Past-Chairmen and an Advisory Board determines the priorities and goals for SLASSCOM. It aims by 2025 to generate US$ 5.0 billion of revenue, create 200,000 direct jobs and establish 1000 IT/BPM startups.

In the current context, SLASSCOM is facing several challenges or limitations to achieve the above objectives and targets. Sustaining and encouraging investor confidence is one of the biggest challenges. For some foreign investors the infrastructure here is not adequate. Also, the cost of operation and the return on investments are becoming challenges with recent price increases in many items and services including electricity tariff. We should take examples from countries like Philippines Vietnam and India which are the emerging countries in terms of this industry.

We are also facing an issue with regards to brain drain. In recent times about 25,000 IT-BPM professionals have left Sri Lanka. They have migrated with families and have settled in foreign countries, so their revenue won’t come to Sri Lanka. There is a skills gap, because of this. This industry is fast evolving.

We talk about Artificial Intelligence (AI) and robotics. The industry has evolved dramatically.

About 10 years ago we used the telephone to talk only, but today we use the phone for everything other than talking. The industry is changing rapidly, so therefore we need people who have the required skills.

The flexibility on policies and procedures is another challenge. It is very difficult to reach out to the Government institutions to get procedures done such as approvals, accreditations and so on.

As an example our organisation recently facilitated an Australian investor. We wanted approval for around 300 people to come and work in Sri Lanka, but they asked for a letter guaranteed by the Government, so there won’t be any disruption.

So we were all chasing Ministers and bureaucrats to get a letter but to date we have not received it. There is a lot of red tape. When the investor comes it is very difficult to get in the clearance from the various agencies. So we need to address these issues.

It is very important to initiate reforms to labour laws and the labour sector to support the growth of this industry. In this sector over 50 percent of employees are females. Most of our business enterprises cater to clients in countries like UK, US, Australia.

Their working hours are not compatible with ours. So therefore we need to change our working hours to mirror their working hours. Under the current labour laws female employees canot work after 8 p.m. So we need to change these laws. We can attract a lot of female employees to this industry because it suits them.

There is a debate on the five-day working week and four day working week. In terms of maintaining the 45 hours work per week I suggest we work on Monday, Tuesday and Wednesday for 12 hours, plus 9 hours on Thursday.

So it’s 45 hours. It benefits both parties. The employees will enjoy three off days instead of two per week and the companies will be able to save a lot of cost in terms of the infrastructure running the office.

They can save on electricity, water bill, security, transportation and so on. These are the things that all the other developing countries are offering as they seek to maximise competitive advantage. The investors will be very happy to say that you know Sri Lanka is a four day working country compared to five days. Employees have more time to attend to family and personal matters etc.

In our industry 50 percent of staff still works from home. But still work from home is not legalised in terms of our labour laws. A theft can happen, some misconduct, accident can happen. But there’s no coverage from the insurance because work from home is not legalised.

Therefore, authorities can easily amend the law making work from an extension of employees normal office work. India has done this very easily and successfully.

The performance of an employee is one of the key areas. This directly affects productivity. Some are underperformers and this directly affects a company’s cost and income. For example from 10 people if only nine works, still we have to pay for 10 people. What is our policy in terms of managing poor performance.

We can’t remove non-performers due to labour laws. We have to change laws to become more professional.

The above has been compiled based on the views expressed by Shanaka Fernando – Director and General Manager of WNS Global Services and Director of SLASSCOM during a public consultation session initiated by the Ministry of Labour regarding the amendment of the labour laws.