As the economic slowdown persists, India Inc?s HR heads have devised ways to deal with it: a snip at increments, a push for productivity, a freeze on hiring, and a recce at cheaper campuses. But bolder initiatives, like time-sharing, flexi-hours and working out of home, are still far way.
Says R Sankar, executive director, human resources, PricewaterhouseCoopers, ?Though some companies have slowed down hiring quarter-on-quarter and salary increases are expected to be modest, there will not be a wholesale shift in full-time hiring of employees.? But he sees changes, going forward. ?Certainly, companies will look at it in the future not just because of the economic slowdown but due to the cost of infrastructure, long hours wasted in reaching the workplace and lack of productivity, among other issues.?
A study by HR firm Hewitt Associates says companies are tightening HR processes to deal with the economic slowdown. Its study of 150 leading corporates in India, on the impact of the economic slowdown on compensation and salary trends, found that 63% organisations had factored in inflation and rising input costs in their salary increase budgets for 2009. The global economic slowdown, US sub-prime crisis and rising inflation have impacted Indian companies and the average salary projections for 2009 are lower by a percentage point at 13.9% from the previous year.
Hewitt mentions companies are looking to balance the pressures of inflation and lower HR budgets by raising productivity (57%) and redeploying manpower (31%). Meanwhile, 30% companies stated they had increased performance linkages to counter fixed-pay increases. Only 20% mentioned a hiring freeze or a slowdown in recruitment. Talking to FE, Sandeep Chaudhary, leader of Hewitt?s Rewards Consulting Practice in India, said: ?Flexi-work pattern is followed by some of the best IT companies in India, such as Wipro and Infosys, to have a proper work-life balance, which may not be linked to the economic slowdown. Several companies have outsourced work to cut costs. Outsourcing of work to India and East Europe by MNCs is part of that strategy.?
He, however, felt one impact of the slowdown would be that companies ?will rethink on the kind of talent it has been targeting. Rather than hire from IITs and IIMs, companies may look at tier-II and tier-III colleges?essentially look at new talent catchment areas.?
HR costs can be kept under control in the days of economic slowdown and there will be a move by companies to do that, In terms of how that will affect the workforce, Anjali Bhole-Desai, associate VP-HR, Tata business support services, said: ?As less as a year ago, absolutely every other person was sure that there were two other ?fabulous? jobs available in the market if she was not happy with the current one. It?s definitely not the same feeling today and everyone is extremely cautious before thinking of a shift. With the economic slowdown, the employees feel they are definitely better-off sticking to what they have in hand and are waiting and watching.?
To deal with the economic slowdown, it is important for organisations to slim down and improve productivity. And companies could be looking at cutting staff budget. Says Naresh Malhan, MD, Manpower India, ?Flexibility will be at the heart of the workplace of the future.?
The slowdown is bound to tell on the workforce one-way or other. According to D Subramanyam, vice-president, group human resources management, Minda Industries Ltd, ?This (economic slowdown) will result in less pay increases, withdrawal of benefits and a reduction in developmental and welfare activities, which will have an impact on the workforce.?
But some organisations have the foresight to see a recession before it hits them and accordingly provide for it. Yasho V Verma, director HR & MS, LGEIL, said: ?Ups and downs in the economy are a usual feature. Boom and recession are both the features of an economy and follows each other. That?s how the economic cycle works. We, at LG, acknowledge that this is a temporary phase. We are optimistic that the economy will boom soon. In our consumer durables industry, it is not possible to have flexible hours due to the services of various departments that are interlinked.?
Arun Jaura, group chief technology officer, Mahindra & Mahindra Ltd, says contract jobs should be seen as an option to cut employee cost and flexible working hours. ?Contract and mandate-based employment helps reduce long-term expenses and provides flexibility to individuals to juggle various assignments, as long as there is a non-compete provision.?
Flexi-hours and working from home has been a tried and tested formula during the dotcom bust in the Silicon Valley, USA. Said Anita Belani, CEO, Talent Management India, a consulting firm, ?Flexi-hours, besides providing flexibility to employees, helps organisations manage overhead costs.?
She added, ?Work from home is another popular option adopted by Silicon Valley companies in the wake of the dotcom bust and it worked well. The motivation was to reduce expensive real estate costs, and companies like Sun Microsystems were able to manage a lot of overhead costs through the option.?
Sandeep Kohli, national director, HR, Ernst & Young, said: ?Irrespective of the economic situation, it really makes great sense to offer flexible work arrangements both from the people and business perspectives.
While it offers a good work-life balance for the employee, it can cut down costs for the organisation, as also enhance employee retention.? If workforce planning is made an integral part of business plans, organisations can react quickly to changes in the business climate, rather than waking up one morning to announce large-scale lay-offs.