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.?

Human resource consultants believe if the slowdown continues, India could see lay-offs in similar scale to the US. Even labour minister Oscar Fernandes seems to have accepted the reality when he has warned of tough days ahead. ?I would not like lay-offs, but reality is reality, if there is no market for a company?s products, lay-offs become inevitable.?

Though most organisations swear employees are their most important asset, they also point out that sustainability, productivity and growth now take precedence over employees.

But Manish Sabharwal, chairman of TeamLease Staffing Solutions, a top job agency, believes companies do have to take their share of blame for the current situation. ?Businesses operate on a simple premise, which is that revenues must exceed costs. The last five years in India saw some wild optimism; some justified and some unjustified. The rising tide lifted many leaky boats and many people and companies confused luck with skill. If you build capacity ahead of demand and the demand shrivels, there is no other choice but to rationalise all costs. We must never forget that companies don?t pay employee salaries but their customers do,? he says.

Industry players believe that employees need to understand that the organisation?s existence itself is at stake if it continues to ignore wasteful practices.

Still facing lay-off is the toughest moment of truth for any organisation and the employees. ?Losing your job is a tragedy. In the current scenario, we don?t have many options to choose from, and it will probably be a compromise on both salary and the job we want to do,? says a recent victim of lay-offs at Lehman Brothers.

Sabharwal feels, ?Job cuts in the organised sector will continue till revenue and costs get back in balance or demand picks up. But we must keep things in perspective; job or salary cuts only affect 4% of India?s labour force. 96% of India?s labour force works in the unorganised sector and for them job security, workplace security and social security are anyway a distant dream.?

But how should these 4% labour force cope up with the situation. What should an HR manager do in such a situation where he or she has to say to an employee that his services are terminated?

Dealing with layoffs

According to Srivastava of Datamatics, the message should never be abrupt or a bolt from the blue. Neither should the HR team stoke rumours. The HR managers should tread with utmost sensitivity; counsel the individual, understand and lend an ear to his or her problems, try their best to assist in dealing with the situation. Like all bad news, breaking it is the worst part. The individual who is being retrenched because of an economic downturn should be convinced that all options were exhausted before the management resorted to this measure.

Experts believe constant communication by HR managers is vital in such times. And the best managers are those whose employees are not completely taken by surprise by such an announcement.

However, layoffs are still a comparatively tough job in India; employees get anxious and reactive, which is not the case in the US, where employees digest and assimilate the news before taking any further decision. But this could be because, in India, a support system for the retrenched individuals is totally absent.

Says Monisha Advani, managing director, Emmay HR, ?Outplacement is a serious business in markets like the UK where companies are very conscious of both their responsibility towards employees being made redundant as well as their own reputation. Outplacement cells on companies? premises, assessment centres to allow a fresh calibration of the individual?s competencies, occupational therapists and psycho-analysts to help impacted personnel to cope with the change all feature as part of the support system provided by companies conducting retrenchments.?

That could be a starting point for Indian companies embarking on retrenchments. And a way to make lay-offs more acceptable and painless for individuals, organisations and the political leadership.