Talent Crunch > Cash Crunch

Ahyderabad-based retail chain was frantically looking for its head of HR two months ago. Two weeks ago, the same company suspended the position. Faced with an economic downturn, the company is tightening its belt. “The suspension of the position is a function of caution,” says the head of the search firm that had the mandate to hire for the position. This retail firm is not very sure of its expansion plans. The company is, though, going ahead with its plans to hire a CIO and a sizeable workforce at the entry level that’s needed to run its operations. This is just one instance of change in hiring strategy among companies. While there is no blanket freeze, every vacancy is being reviewed for its immediate justification.

A software services major has decided to do more with less. From the heady days (which is just six months ago) of a hiring philosophy that said “if a candidate is good and there is no post, we will still hire”, the company has hit a hiring reality check in the form of “only the bill-able resource gets hired”. At the same company, a 30-something project manager now finds himself working on a project involving 200 people instead of 50-people team he was handling earlier. Corporate India has swung from a situation of talent crunch to cash crunch and has swung so quite suddenly. What does this change mean for you?

Skills of the moment
. Ability to adapt to a changing environment quickly
. Ability to cut the frills and manage cost better
. Cross-functional exposure to develop multi-skills

Ajay Soni

Companies are looking to
Shed excess weight,
But the Right Kind of Weight At Maruti Suzuki offices in Gurgaon, a bunch of 20-odd managers get together with the top management for what is called “informal tea group meeting”. Earlier, these meetings used to happen once in two months without any specific agenda. Now they take place once every 15 days and with one clear agenda: the company’s strategy from now to March 2009. “It’s part of our retention strategy. We are re-enforcing internal communication in a big way to keep up the morale of our employees amid the overall negative sentiment,” says S.Y. Siddiqui, Managing Executive Officer (HR, Finance and IT) for Maruti Suzuki India. Hiring is as per our plans and there is no downsizing, says Siddiqui.

Companies such as Maruti have enhanced their internal communication as part of their retention strategy. “You cannot afford to demoralise your good performers. When the business recovers, companies will need them,” says E. Balaji, Chief Executive Officer, Ma Foi Management Consultants. So, just as companies are trying to get rid of excess staff, they are placing equal emphasis on retaining the “right” staff. This is because getting rid of key people in a bad market will be a double whammy.

Right-staffing is happening because there is a much sharper focus on differentiating high performers from others. “Years of hyper growth have resulted in a culture where mediocrity sometimes flourished. Here is an opportunity for companies to bring performance orientation back into managing their human capital,” says Padmaja Alaganandan, Business Head-Human Capital for Mercer.

In times of economic uncertainty, as is seen today, employees are anxious about the future and feel that opportunities for advancing their careers in a particular company or industry are limited. “Therefore, the main challenges from a Talent Management perspective are retention of key talent and ‘rightstaffing’, says Tanuj Kapilashrami, Head, HR, HSBC India.

Some HR experts also stress that the slowdown is not going to reduce the demand for high performers. This is because in times of overall negative sentiment, talent is a big differentiator.

“When organisations are swimming against the current, they need the horsepower of the talent,” says Ajay Soni, Business Leader-Organisation and Talent Consulting, Hewitt Associates. Subsequently, retention of the key talent becomes the key.

For HSBC, talent management is a long-term investment and while the returns are realised at regular intervals, the investment has to be continuous, irrespective of the economic cycle. “It takes the brightest to grow the organisation when the going is good, and it is the same bright lot that will see an organisation through the tough times,” adds Kapilashrami. In the current environment, there is a slowdown in hiring across the board in India and the projected increase in the next few months for HSBC will be 4-5 per cent, she says.

S.Y. Siddiqui Specialisation Is good, But multi-skilling Is even better While retention of talent is in focus, organisations are giving undivided attention to three factors—productivity and efficiency; getting the best of cost incurred; and optimum use of the assets. The key for employees is to see how they can contribute to each of these and be ready for the domino effect of organisations tightening their belts. Be prepared for most of your salary increment becoming inflation-hedged. Anything that will add to the cost and has no direct link to revenue generation will be postponed. But this also means employees who are in client facing roles are in relatively safer position and better insulated from the downturn compared to employees in support function roles. The mantra for now is adapt and tweak your skill set as per the new requirements and, while you are at it, multi-skill, say HR heads. At Pantaloon Retail, there is no change in the way talent is being managed. But, Sanjay Jog, Chief People Officer, Future Group, wants his workforce to acquire a new skillset. This is because before slowdown became a reality, Pantaloon Retail started a process nine months ago with the objective of optimising its costs. This was done with the help of introducing technology in merchandising management. As a result of this technology, information on inventory etc. will be available faster and more easily. Subsequently, people will have to start planning faster. “Planning as a competency is hot at the moment in our company as this system is being completely implemented by November-end,” says Jog. Maruti Suzuki has also introduced a specific training activity prompted by the slowdown a month or two ago. The objective of this training in value analysis and training value engineering is to be more cost-effective. “The focus earlier was growth and now, it is profitability. Employees will do themselves good to understand that these two require different competencies,” says Hewitt’s Soni. So, what are these different skillsets? The growth phase was about creating new opportunities and meeting customer demands. That required a lot of innovation. Now is the time to cut frills, manage costs better and enhance customer satisfaction. “Adaptability will keep you ahead of the curve,” adds Soni. Sanjay Jog Even in this market There are hot sectors for hiring At the moment, India Inc. is in wait-n-watch mode, but some sectors are looking up in terms of hiring. “In the current and next quarter, hiring across pharma, healthcare and life science promises to be good while recruitment in education and energy will be reasonably OK,” says Ma Foi’s Balaji. Agrees Naresh Malhan, MD, Manpower India. Legal process outsourcing will continue to grow; health and pharma will continue to look promising, he says. There’s more good news for domain specialists in technology and other niche areas. Domain specialists across sectors will still call the shots. For organisations looking at strengthening their DNA, this is the time to hire the right talent at the right cost. “For smart organisations, now is the time to build leadership pipeline,” says Hewitt’s Soni. For smart employees, now is the time to enhance their roles in their organisation. Says Gangapriya Chakraverti, Business Leader, Information Product Solutions business, Mercer Consulting (India): “Employees are key stakeholders of any company and have been a part of the success story till now, so at a time when chips are down for the business, employees need to support the organisation. Tough times can make companies and their employees stronger for the future.” Source : Businesstoday.com

Attrrition rates drop dramatically !

Hi

one of the remarkable feature is that the attrition rates have dropped dramatically.

Read the article and share your views.

Raghav
Founder HRinIndia
Indias Biggest HR Network
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HR Guru & Strategist
Bangalore, India
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More Employees Stay in Their Jobs

by Sarah E. Needleman

A growing number of professionals are saying "no, thanks" to prospective employers asking them to change jobs.

Spooked by the shaky economy, 46% of U.S. middle managers polled in mid-September said switching employers in the current environment is risky, according to a survey by Accenture Ltd. Just 13% of respondents said they were actively looking for a new job, down from 30% the last time Accenture conducted a similar survey in 2005.

The findings are echoed by search-firm recruiters, who say they are having to work harder just to get professionals to hear out job opportunities they have to offer. And dire tales of people losing their jobs shortly after being hired, although rare, are helping to spread caution among workers.

Many employees are hesitant to join new companies because "there's a level of uncertainty," says David Smith, managing director of talent and organization performance at Accenture, a global consulting company. It's unclear whether a different employer will be able to provide sufficient job security, training, advancement opportunities and other benefits. By contrast, they know what's available to them where they work now, he says.

The Accenture survey, to be released Thursday, polled via the Internet 322 middle managers, including account supervisors, associate vice presidents and sales managers. In its 2005 survey, which polled 225 professionals about their job outlooks, Accenture didn't ask about perceptions of risk because the economy was strong at the time, a spokesman says.

Professionals who are considering switching jobs should carefully vet the financial health of a prospective employer, job recruiters say. To protect themselves, job candidates also should try to request that a severance package be included in any employment contract.

Though the hedge fund followed through on a promise to pay the candidate a $32,000 sign-on bonus, he was left initially without a job, says Mr. Weiss, who adds that this is the first time he has seen a job fall through at such a late stage of the process. The IT professional recently was hired by a foreign bank, the recruiter says.

Search firms say they are finding it harder to lure prospective candidates. "We have to really create for them something that is a sure thing," says Robin Bland, a senior recruiter at QuestPro, a search firm in Dallas that specializes in the insurance industry. "We have to bombard them with information about a potential employer so they feel secure about it."

Candidates also are taking longer to make up their minds about a job offer, says Aaron Brooks, managing director at Chicago-based search firm Mergis Group. "Companies need to realize that candidates are more in the driver's seat than they might think," he says.

Professionals should consider that when an employer needs to lay off workers, "sometimes it's last in, first out," says Dale Winston, chairman and chief executive officer of Battalia Winston International, an executive-search firm based in New York. In other instances, an entire division may be cut.

Kevin Burke was laid off earlier this month as a vice president of finance at a large chemical manufacturer after just seven months at the job. He had relocated his family for the position from Ohio to Missouri, where he bought a home. He says the company was having financial troubles and eliminated the department he worked in. "I certainly was surprised," he says.

Mr. Burke, 41 years old, had left behind a similar job at an automotive manufacturer. Despite the upheaval, he says, he doesn't blame his latest employer for what happened. "Market conditions dictated this result," he says. "Nobody expected the economy to burst as it has."

Workers may have good reason to be cautious about making a career move at such an economically volatile time. Consider what happened to an information-technology professional who resigned from his job at a New York investment bank. In late September, the employee accepted a written offer for a management job paying $120,000 a year. Days before he was to start, the new employer, a New York-based hedge fund, decided not to fill the position, citing upheaval in the financial markets as the reason, says Ron Weiss, a partner at search firm BMW Group Inc., who had introduced the parties to each other.

Job candidates may be able to protect themselves to some degree by asking prospective employers some direct questions, says Paula Marks, an executive coach and managing partner at Gilbert Tweed Associates, an executive-search firm in New York. For example: What's the financial status of the company? What is the employee turnover like? Do you expect the company to be sold anytime soon? When was the last time you had layoffs? What criteria did you use for those layoffs?

Meanwhile, do some research on your own, adds Ms. Marks. Search the Web for news articles for insight into a potential new employer's financial status and layoff history. If it's a public company, review its 10-K filings with the Securities and Exchange Commission -- documents that summarize a public company's performance. Networking is also critical, says Ms. Marks. Seek out referrals to past and present employees at the company you're considering joining to get their opinions and more information about the organization.

Candidates also should try to secure a severance package as part of their employment contract and have an attorney review it before accepting a job offer, says Ms. Marks. Propose the same size package your current employer has promised you if you were to be dismissed, she advises. Should you want another amount, offer what you're most comfortable with. If your request is rejected, consider turning the offer down. "You have to protect yourself," she says.

It's wise to weigh the pros and cons of a job change with a professional career coach or mentor, says Ms. Marks. "Don't discuss it with friends and family. They bring their own baggage, their own fears."

Source : wallstreet journal