Rahul Mehta, a software engineer, changed three jobs in two years. He was upping himself to a better salary and a better post. ?It was remarkably easy. I had calls from many firms and I was at a loss to decide which to pick up.? But in the past six months, Mehta has stayed put in the firm he is now working in.
?When I joined this firm, I had some perks which were exciting like international travel, for instance. But travel has been frozen now for a year. Videoconferencing equipment has been purchased by the company and we are into videoconferencing in a big way. I have heard rumblings of a salary freeze at the top echelons, but nothing has happened at my level so far. I am not too happy being here but I don?t want to make any wrong moves in this volatile financial situation. I shall bide my time and then decide.?
The effects of financial meltdown is resonating in office corridors with bosses scrutinising at the micro level like ensuring computer terminals are shut when the employee is in the canteen taking his customary half hour lunch break. ?Not only team leaders but also the top bosses walk through cubicles to check the computers are shut down when we are leaving for lunch,? says Craig Scott, a 22 year old, who is working for an IT firm. ?The canteen has air condition. But now the notice from the management is to switch it off. It gets unbearable in the canteen but the bosses are not prepared to even discuss the issue.?
Some companies saw the grim reality even before the picture emerged on the Indian financial map. They planned a strategy which would see them safely on the coast. Like Kansai Nerolac Paints Ltd, for instance. Informs PD Pai, VP ? Finance, ?We implemented cost cutting measures a couple of months earlier, as there were indicators especially from the auto sector that a slow down seemed imminent.? Besides function-specific cost measures, the company has issued directions for ?drastic? cuts in some areas ? tours and travelling expenses are to be taken only if it is critical. Employees must use company?s transit accommodation facilities so as to eliminate hotel stays, adds Pai.
Employers understand that the pill has to be sugar coated. So some companies give prizes to employees to help the company trim costs. Employees are enthusiastic about this change, though.
Says an employee of Bharati AXA Life Insurance says, ?A contest is on in all our branches spread across 20 states in India and covering 10,000 employees for top three ideas on cost management. A prize will be given every month for an original idea,? he says. The contest threw up an idea which the company will shortly put into practice. ?We found that our agent form runs into 24 pages and we have suggested to the company to shorten it to four pages.?
The company has focused on three aspects ? travel, utility and operating expenses ? for cost cutting. ?We have been instructed to go in for air travel only with budget airlines and also to seek corporate deals with them. Tickets have to be booked at least a week in advance to avail of discounts. Any outstation travel is sought to be completed in a working day so that the employee does not have to stay in a hotel and fly back the same day itself.? Video conferencing is encouraged. The company has also reduced the number of house keeping staff and the excess have been redeployed.
Says V.Srinivasan, CFO, Bharti AXA Life Insurance, ?Some of our other cost management measures include savings on electrical consumption by ACs and lights with the help of competition across branches, restructuring of modular office space across all branches. There are currently 10 more such measures which are in different stages of implementation, with a potential saving of Rs 1 crore annually.?
The recession is ricocheting across all sectors. Everyone is tightening their belts, says an IT analyst. ?From excuses in terms of hiring to attrition, it is a wake up call to the industry. Most IT companies had indulged their employees and now the latter can?t complain. This quarter, there is a bright spark with a fall in attrition. IT graduates are now moving from software to the manufacturing sector and core engineering sector as there are no jobs available.?
The job market is going slow on recruitments and expansion and employment firms are finding it a challenge to find jobs. Says Mahesh Sheka, Managing Director, Dialajob ? a recruitment solutions provider, ?Since January, there has been a freeze on new recruitment in some firms. There has been no increment or minimum increment in the salary and no promotions. There is a reduction in employee benefit and family perks like free trip , parties , tours.? Every small measure counts. Avers Vikas Sharma, Director, Supreme Infrastructure, infrastructure sector company, ?We have seen good positive impact on the outflow of administrative expenses which affects the operating margins?
The term cost cutting is a ?dangerous? term for most employees. They wonder what will be the end result of the exercise ? attrition or trimming of costs and perks. Cost cutting is not necessarily achieved by downsizing employee strength, explains Shankar Velayudhan, Executive VP, (India, Europe) Mindteck (India), a global Technology and IT Services Company. He spells out the company?s plans. ?We decided to postpone plans to lease new office spaces, temporarily freeze proactive hiring to avoid any potential overheads, accelerate entry level training program, called ?Mindteck Academy,? to churn out more ready-to-deploy fresh engineering graduates, increase focus on contracting employees and restrict international travels. The core objective is to keep the expense sheet flat and not incur any additional/non budgeted expenses for next few months.?
Employees fear these new measures will be the norm. Not true, say all the company heads that FE spoke with. Vinit Durve, VP – Corporate Human Resources, Zicom Electronic Security Systems Ltd; which has put a hold on international travel, hiring, infrastructure investments, et al, says, ?There will be a review done after three months as it is expected that the situation would continue to be sensitive for the next six months.?
Global recession is compelling companies to revisit their profit margins and look for ways to maximize it. Chender Baljee, MD, CEO Royal Orchid Hotels Ltd, says what can be reigned in is salaries, food and beverage costs, light and power cost, advertisement and sales promotion, and guest supplies. ?Hotels can do this without compromising on guest standards by creating awareness among the team members about the same.?
Some firms have pulled the plug even when there is no fear of a shock for them. Like a French firm, which has in the past two months stripped off two ?major? perks, says Gaurav Prakash. ?Free transport and evening snacks have been withdrawn. We are not even affected by the global recession. But the company has decided to be cautious.? The Diwali gift from the company has not been trimmed. He says, on the contrary it has been upgraded. ?Last year, it was a gift voucher for Rs 850 and a box of chocolates and this year the voucher is for 1000 along with a box of chocolates.? Still no one is complaining too much. ?We are glad that we have not been been given the pink slip,? they say gratefully.