Factoring the slowdown into HR

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: 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.”