The market is known to be a great leveller. And right now, high-flying executives with top-rung banks will be experiencing its wrath to the fullest. Apart from the organisation and the economy, employees are the ones who feel the hurt at an extremely personal level. Many a times, such shocks can be career debilitating and could set talent off the course, something corporate India will have to deal with.
While the Lehman Brothers case has highlighted the severity of the threat, cases of mass layoffs and retrenchment are now beginning to surface all around. Earlier, layoffs happened in drastic cases where companies retrenched when facing bankruptcy. Layoffs were seen as the last resort. Now, changes in business models and even non-performance can amount to layoffs. Earlier in the year there were reports that IBM India issued pink slips to 700 employees, TCS to 500 and Yahoo! to at least 40 in India.
?When the 1998-99 Asian crisis happened, several foreign institutions, who were paying fantastic salaries, unheard of in India, wound up and many employees did not know how to deal with the trauma of losing a lucrative job overnight,? says a senior IT executive who managed to weather the storm and change his profession.
He quotes an incident about his colleague, a product of IIT and IIM, who came from a very humble background. He had to go through six months of psychiatric treatment after his employer Peregrine Capital closed shop in India. ?He had just bought a big flat for his parents, who had struggled to put him through his education and the shock of losing it all and facing the shame shattered him.? It is said that all senior executives were summoned in a conference room after a lavish lunch and asked to turn in their car keys and cell phones and were issued the pink slip. ?After that day, people in broking and investment banking firms shuddered when the boss suggested having a nice lunch at the local five-star,? he adds.
While in the earlier days, there were only a handful of Indians involved in such businesses, the numbers have now swollen as there are a lot of Indians working in the main offices as well as the back-up or outsourcing outfits. Experts reckon that there would easily be around 35,000 executives working with such investment banking or broking outfits (excluding pure banking businesses).
?Yes, there was a lot of trauma and stress for me and several others here at Lehman Brothers as the developments unfolded. There are still many who could not handle it and sought psychiatric support,? says Vaishali Pathak (name changed) who works on the derivatives desk at Lehman. She now breathes a sigh of relief as most of the businesses have been taken over by Barclays. ?Oh, we?re Barclay?s now,? she quips, but acknowledges that the going will not be the same again and there is a role clarity related stress now. Others too, especially in the offshore units, will be facing the trauma.
?But then this is a professional hazard,? says Rajesh Kundu, who has been through at least three such upheavals. The new generation of professionals had not witnessed a downturn and its harshness, and this will be an opportunity to get humble and stay steady when the days are heady, he adds. They will have to wait in the hope of better days to return.
And this is an education that many new professionals need to learn, reckons Sowmya Sen, a senior HR executive with a leading multinational. This is the age of competition and while there will be great gains, there will also be layoffs and salary cuts. Many top executives have seen the bright side of the boom and now this is a comeback to reality. Here, being grounded and managing lifestyles is really recommended, she adds.
?There is tremendous pressure to maintain material status amongst peers and this leads to over spending and financial mismanagement and thus the pressure to see constant income growth. So, when the layoff happens during a slump time, the fear of losing all the material stuff causes extra stress,? says Divya Vaidya a consulting psychiatrist in Mumbai. Sen adds, ?Earlier executives would shift jobs to manage their lifestyle and we had an issue called high attrition. Now, when layoffs are coming through, these executives are now facing the brunt.?
This can be a harsh lesson to be learnt for several senior executives who have probably even managed their lifestyles in a sound manner. The important point to note is that such counselling and education is hardly provided at business schools. Almost all of them have sessions about growing in an organisation and only a few sessions on managing bad times, but not managing businesses in bad times or personal crisis caused by professional turbulence.
?There are several avenues available nowadays for managing stress and spiritual expansion, but these things are not institutionalised,? Vaidya adds. A lot many executives have been taking to these programmes. However, there is a certain stigma that is attached to visiting a psychiatric consultant. Companies need to bring in experts in these matters into the company and bring in counselling as a valid management solution. Coaching and mentoring have been already established as management practices. It?s now time for counselling facilities, especially in times of stress, she adds.
A case is being made out for having clear communication, especially when rumours are floated about the company. Such rumours can cause panic and unnecessary pain. A lot many employees in a US company jumped the gun and left the company in a huff when they learnt that their company was being taken over by an Indian company. Since they did not have any background of the Indian company, it was assumed that there would be widespread layoffs and they panicked. A similar case was reported when Videocon took over Electrolux Kelvinator operations in India. Reportedly 40 middle-level employees quit the firm in a month after hearing the news.
In the present circumstances, many companies are targets for mergers, acquisitions, sell-offs and restructuring. And these can be stress generating triggers for employees. Also, at a time when the current crisis started, employees, both existing and prospective, of other banks and broking houses were wondering when their time would come. ?We had a tough time convincing prospective employees during interviews that we are sound and well capitalised,? says an executive with a leading brokerage house. Several people, and some of them senior executives, did not land up for interviews and meetings. ?And a lot of it, I think, was because we did not control internal communication, while we managed the external aspects of it,? she confesses.
?I always stress that the company should be in communication with the team members. And this is not just about acquisitions and mergers. While the need during such times is high, it could also be when a key team leader is being replaced or transferred or even leaving the company,? says Prabal Sarma, a training consultant. And many companies have this practice in place and are successful in managing this aspect of stress and change, says Sarma. He also asserts that there is a need for the top management to get proactive here and map out stress points for the team, right at the time of formulating plans to handle their strategic intent and fulfil their vision. There will be uncertain and unexpected moments, but most are not, he adds.
On the personal side, executives of corporate India need to brace themselves for more such moments in times to come. It might not necessarily be about the organisation going down, but even mergers, acquisitions and sell-offs in a globalising world. Job security related stress is surely expected to rise as corporate India climbs up higher on the growth curve and takes on global competition.