Cos reviewing HR costs

By Sheetal Srivastava, TNN

Desperate times call for desperate measures. The adage seems to have found the perfect fit in the Indian corporate realm right now. While some firms are pressing on the panic button, the smarter ones are aligning support functions with other departments. A lot of the HR related work is being aligned with the training department of companies, and people from production are also helping out in sourcing manpower.

This is resulting in the reduction in size of the HR department. With companies looking to reduce cost across the board in the current recessionary market, reduction in HR spending too is high on the agenda of organisations. There is no doubt that this is a challenging time for HR. The question is, how are they coping with it?

“If reduction in spending is seen as driving cost efficiencies, then HR costs are going to be reviewed very critically. HR costs constitute a huge chunk of total cost of organisations today, especially in the IT/ITES sectors,” says Arun Rao, VP-HR, AppLabs.

So, whether it is a critical review of workforce strength, the annual increases, training and welfare budgets, every aspect would be reviewed. Therefore, HR spending is bound to be affected.

“Reduction in spending across all departments will affect HR spending as well. Things like staff welfare are likely to reduce,” notes Deepak Mohla, MD, InspireOne.

So, will the reduction in HR spending also lead to the downsizing of staff? “This could be an offshoot – depends on the perspectives of the organisation. If the organisation is carrying a huge people inventory and deployment is not seen in the horizon, then downsizing is possible,” adds Rao. However, the real people who are in peril are the poor performers who just seem to make up the numbers.

Also, resources which seem to prefer to be on “bench” than be flexible in terms of working on available projects are again likely targets, more from an attitude perspective. Rao further adds, “Organisations which have traditionally been meritocratic and believed in bottom five kinds of philosophy would be more stringent in its administration in this hour.”

In case of HR departments, people who prefer to do back-end transactional jobs are the ones who are likely to be most affected by the downsizing. Also, people who fall short of expectations in terms of their ability to partner with business would again be potential candidates for being shown the door.

“People and more so HR people would need to show their worth for organisations to remain invested in them,” adds Rao. In the current scenario when most firms are freezing recruitments, are HR departments looking to realign work profiles of its staff? “Surely, the recruitment arms are facing the slack today.

If people within HR teams, especially Recruitment and Learning, aspire to be techies, this is the time when organisations may be willing to grant them this wish,” says Rao.“Yes, HR is certainly looking at realigning roles with multitasking coming into play. There are less people doing more jobs now,” adds Mohla.

So, how does HR see its role in the current economic scenario? No doubt, it is a golden moment for HR even in such tough times. Yet again, they have an opportunity to leave behind the implementer tag and actually partake in the direction building.

The present times have given HR heads an opportunity to establish themselves as strategic partners as they lend crucial strategic directions to the organisations during these times which no other department is qualified to provide.

What remains to be seen is if they would battle against the odds and come out brave or not? That’s something only next few months would tell.

Source : Indiatimes.com