From talent crunch to 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
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.
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.
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.”
