Indicators of the transition could be noted in little changes. HR employees, instead of sitting in a quiet corner of corporate offices, were sharing floor space with business employees; people in the function were no longer broadly branded as personnel officer but start specialising in areas such as compensation, training, recruitment and shared services. HR started hiring for line business and for its own from premier business schools. HR consultancies started sprouting up, advising companies on their compensation competitiveness and organisational design and behaviour. Most HR functions managed to rise to the occasion, partnering with business to push their organisational agenda amongst employees. All this was in a time of economic growth.
But the last six months have seen a 360-degree turn in the economy, with companies focusing on conserving, cutting and correcting expenses. Cost cutting revolves around employees, be it freezing recruitment or salaries, streamlining benefits, reducing training programmes and reward and recognition programmes and weeding out poor performers and excess headcount. HR teams have got into a fire-fighting mode and are executing management decisions. These rough times, per Prakash Bhide, president-corporate HR, JK. group, are occasion for HR to move from a business partner role to a business player and innovator role, actually scoring goals and taking hits like business does, so that HR is perceived as one with the organisation and, in turn, can become more proactive towards the demands of their function.
According to Pankaj Shankar, global head-HR, Infogain, an IT services company with over 1,000 employees in India, the downturn has forced employees to seek nothing more the stability of their job. Infogain, on its part, seeks to raise value of the work employees do for clients, and in the process, helping the employees to go up the value chain.
For example, Infogains clients are reducing their technology budgets and, so, are unable to invest in new ERP systems; for example, retail clients ask Infogain to integrate their home grown point of sale systems with newer Oracle applications, thus requiring advanced capability from Infogains software engineers. HR works with the management to build up this capability and, in this context, plays a strategic and tactical role by sharing with employees the new client business in the pipeline together with debriefs from clients to reassure and nudge employees to give the desired level of delivery.
From Shankars perspective, Infogain management is already going down the path of needing more from HR. The company, last year saw 25% to 30% growth, expects 15% this year.
JK group, a conglomerate of eight to 10 businesses with an overall headcount of 20,000 employees, of which 7,000 are contractual or casual and who have been the first in the pecking order of being made redundant, had to take some stern HR decisions during the downturn in its various companies.
Some decisions by the group are tactical, for instance, having plant block closures for 1 to 2 days per week, which reduce fixed costs such as contractual manpower costs--- a better option than cutting down on production per day, which reduces only variable costs.
The management agenda is to show solidarity with employees during tough times. About 300 senior people, from manager to president level, have taken a 5% pay cut at the Rs 5,000-crore JK Tyre. In the words of Prakash Bhide, This is a symbolic gesture rather than one which provides cost relief.
Bhide, expressing the vision of the future HR organization, says, Making tactical and symbolic cost reductions, be it that of pooling organisational frequent flyer miles or having a company president travel by train to a JK factory, are all well and good. The role HR really needs to play though is to encourage business to conceptualise new ideas at the drawing board and inculcate a culture of innovation in product development, processes and strategies. The rationale is, while competitors maybe fast to copy new products within a six months, they wont be able to do so with behind the scene operational and strategic innovations.