Coping with the pink-slip phase

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: Pink-slips have come to haunt India Inc as well. After an aborted lay-off attempt at Jet Airways, news of retrenchments in many companies has started trickling in. Industry chambers have warned of imminent massive lay-offs in the face of local credit squeeze and global downturn. The questions that vex most HR managers are how to avoid the pains of a necessary surgery, and how to make it as humane and rational.

“Looking at the current scenario, pay cuts and removing employees are the necessary evil steps we are forced to take,” says and industry player, not wanting to be identified. After all, pink slip remains a dirty word in India.

Though gigantic global corporations, like Citigroup, have announced massive job cuts, Indians still view lay-off as an unethical practice. Neither the political system nor the social ethos accepts lay-offs easily. Fearing the global trend of job cuts spilling over to India, Prime Minister Manmohan Singh had, early this month, urged industry leaders to refrain from large-scale lay-offs.

Still the tide of pink-slips may be unstoppable. Indian companies have already frozen recruitments and some have started lay-offs. The sectors that have been first impacted are information technology, financial services, aviation and real estate. In the old economy, the textile industry, which has done away with seven lakh jobs—both organised and unorganised—so far this year, may see a five lakh more jobs on the chopping block if the global economic downtrend continues.

IT is one sector where hiring and firing go hand in hand. Most IT companies are set up to have a clear picture at any time of its employees’ job engagement, according to Atul Srivastava, senior vice-president & head of corporate HR, Datamatics Ltd. Srivastava says, “In the IT/ITeS sector, companies do keep the bench option (non-billable resources) to take care of their future projects, training, leave, attrition and internal projects. The bench strength is normally between 10% and 15% of the total head count, and it is a line set by a company for itself. Whenever the bench strength crosses this line, lay-offs become imminent. Traditionally, cost-optimisation has been limited to overheads like travel, infrastructure and perks, and strategic initiatives like expansion into new markets, opening new offices.”