Five Human Resource Issues for the Next Five Years
1. Access to Labor:
* Greater availability of foreign labor, but must understand “red tape” and restrictions—Good employees are available from many parts of the world and are willing to travel here, but the restrictions may be a challenge for some producers. | |
*Local reputation is increasingly more important—Word gets around. If an operation has a reputation for lacking concern for their employees, being on the low-end of the local pay scale, or having a “difficult” atmosphere to work in, it will be challenging for that operation to attract the best employees. | |
*Need multiple resources for contacts and applicants. | |
*Keep majority of turnover in introductory positions. | |
*Travel expenses—As gas prices go up and other travel expenses inflate, our “local” labor pool will shrink. |
2. Accountability and Behavioral Issues:
* Develop documentation to support expectations: i.e. Job Descriptions, Employee Policy Handbooks, Operating Procedures, Performance Reviews, Job Application Forms (with itemization of skills), etc. | |
*Establish clear processes and guidelines for communications: i.e. Staff Meetings, Written Communications, Documentation of Activities, Separating Family and Business, etc. | |
*Production targets are essential. | |
*Must have clear expectations and up-to-date employee policies: |
3. Competitive Wages and Benefits:
*For introductory positions—must be competitive with local opportunities that offer the same pay and compensation. | |
*For mid-level positions—must be competitive with similar positions and levels of experience available locally. | |
*For top level management—must be competitive with regional/national opportunities. | |
*Trend is toward more individual options for benefits, such as “shared” medical coverage, a variety of investment plans, etc. | |
*Unique compensation for long-term employees that are “maxed out” on salary. |
4. Local Competition:
*Local Manufacturing/Industry—Some local areas are seeing a resurgence in local manufacturing and light industry. | |
*Ethanol Plants—New plants are going up all over the country and will be highly competitive for some of the skill-sets that are hard to find—mechanical skills, management skills, trucking, operators, etc. | |
*Small Business / Service Industry—No sector of our economy has grown as much as small businesses. You may have several in your local area that you don’t even know are direct competition for your labor pool. | |
*Aging local population—In some areas, the local workforce is rapidly nearing retirement age, and is certainly reaching an age that is no longer interested in working in the weather every day. These employees are not being replaced with their children or grandchildren—at least not at this point in time. |
5. NO experience or work background:
*New to the workforce. | |
*No agricultural experience whatsoever. | |
*Producer’s lack of experience in training—It is hard to do a good job of training when we learned our skills through “osmosis”….. | |
*Safety issues due to lack of experience, time/extra cost of training, may not stay long, turnover increases. |
Strategic Plan for Labor:
*Need to develop overall strategic plan for Employee Management. | |
*Must be willing to develop social atmosphere in the workplace that is accepting of different cultures and backgrounds. | |
*Emphasize personal development of all employees. | |
*Establish company culture and atmosphere that limits liability. |
Meeting Recruiting and Retention Challenges in India
India’s economic growth is continuing at a rapid pace, with gross domestic product growing at 9.3% in 2007. This country of 1.1 billion people is now a major player in the world economy and is an important destination for Western companies.
However, as more and more foreign firms enter India, its tight labor market is a major hurdle. White-collar salaries rose by an average of 15% in 2007. HR management has become a central part of doing business and can cause rapid business deterioration if handled poorly.
The fast development of Indian HR makes it vital to keep up with standard practices. This will helpsthe current state of recruiting and retention practices to help businesses run smoothly in India.
Infosys employees vent anger on HR issues in blogs
Employee activism is on the rise at Infosys, India's second-largest information technology services firm, which employs close to 114,000 in India and across the world.
The company's effort to tame the disgruntled employees, who were earlier venting their anger in public forums and some social networking sites like Facebook, Twitter and YouTube, by giving them a blogging platform on its intranet, seems to have back-fired.
So much so, the company's HR Head, Nandita Gurjar claims to be getting thousands of negative reactions to her blog postings in the company's intranet 'Sparsh'.
This has forced her to set up a team of six to moderate the blogs and 'My voice', the dedicated website the company has developed to seek the opinion of employees on important policy matters. Infosys is understood to have changed some of its HR policy decisions, coming under severe attacks by the employees in these blogs and 'My voice'.
"We realise that they should not take names and make personal attacks. But sometimes, from their perspective, they are in so much pain that they need your attention and which is why they make personal attacks. You can't react to it . . . because I don't think they are talking personally about you, as long as they are talking about a position. It's part of the game," said Gurjar.
8 HR issues entrepreneurs face while scaling up issues
When you started out, the entrepreneurial energy kept the company going. Being a small team, every body knew what everybody else was doing and there was 'collective will' to make things happen.
- Commitment to core values without compromise
- Planning and execution orientation
- Identify key roles and key persons
- Don't have wrong person occupying a role
- Build or bring in senior talent that is necessary
- Identifying and enshrining the right behaviors
- Recognizing & promoting right capabilities and behaviors
- Letting go
This is the most difficult piece. It is very difficult for entrepreneurs and their immediate team to let go of every detail of execution and let the people in the organization perform; do the strategic thinking and let their people execute. Because nothing is ever perfect except when they do it themselves. There is too much emotional content in their relationship with the organization and perhaps 'over-ownership'.
Human Resource Problems in Knowledge Process Outsourcing (KPO)
Potentially massive savings in wage and benefit costs continue to drive the global offshoring movement, but companies are facing a wide range of people management issues both overseas and at home, according to a major study released by The Conference Board, the global research and business membership organization.
But offshoring continues to pose risks as well as opportunities. “Does cheaper also mean riskier?” the new study asks. “As labor demand rises in offshoring markets, offshorers and potential offshorers would be right to wonder how long the arbitrage opportunity will last. Will labor supply continue to meet growing demand?”
Already, increases in demand for IT skills are driving up pay levels, especially in such centers as Bangalore and New Delhi in India.
The study emphasizes that companies must look beyond wages to consider benefits, training and other costs before they outsource and also consider transportation, cultural and other expenses related to offshoring.
At home, companies are learning they can quell some of the disruption springing from offshoring by designing plans to aid employees who lose their jobs to offshoring, overcoming resistance from disgruntled workers and maintaining both morale and a positive image among remaining employees.
The study points to a number of actions that companies can take to build cooperation and sustain trust, including:
Ø Involve managers at all levels in important decisions.
Ø Foster openness and create a sense of fairness.
Ø Promote a culture in which people believe in their colleagues’ and leaders’ competence.
Ø Promote cross-cultural health, awareness, and cooperation.
Top 5 HR Challenges for Indian Organizations : A Current Perspective:
§ Managing Knowledge Workers
Essentially, here we are looking at different kind of people who does not obey the principles of management for the traditional group. This boils down to higher educational qualifications, taking up responsibilities at a lesser age and experience, high bargaining power due to the knowledge and skills in hand, high demand for the knowledge workers, and techno suaveness. The clear shift is seen in terms of organization career commitment to individualized career management. Managing this set of people is essential for the growth of any industry but especially the IT, BPOs and other knowledge based sectors.
§ Managing Technological Challenges
In every arena organizations are getting more and more technologically oriented. Though it is not in the main run after the initial debates, preparing the work force to accept technological changes is a major challenge. We have seen sectors like banking undergoing revolutionary changes enabled by technology. It is a huge challenge to bring in IT and other technology acceptance all levels in organizations.
§ Competence of HR Managers
As it is more and more accepted that lot of success of organizations depend on the human capital, this boils to recruiting the best, managing the best and retaining the best. Clearly HR managers have a role in this process. Often it is discussed about lack of competence of HR managers in understanding the business imperative. There is now a need to develop competent HR professionals who are sound in HR management practices with strong business knowledge.
§ Developing Leadership
It is quite interesting to note that there is less importance given to developing leadership at the organizational level. Though leadership is discussed on basis of traits and certain qualities, at an organisational level it is more based on knowledge. The challenge is to develop individuals who have performance potential on basis of past record and knowledge based expertise in to business leaders by imparting them with the necessary "soft skills".
§ Managing Change
Business environment in India is volatile. There is boom in terms of opportunities brought forward by globalisation. However this is also leading to many interventions in terms of restructuring, turnaround, mergers, downsizing, etc. Research has clearly shown that the success of these interventions is heavily dependent on managing the people issues in the process. HR has a pivotal role to play here.
Career Development
Surveys show that salary is one of the top considerations of Indians in choosing jobs, but it is only a minor factor in employee satisfaction. If you want employees to stay at their jobs, one of the best motivators is career development.
• Therefore, the best employers in India carefully track career development.
• They hold regular one-on-one meetings on the subject, set and track goals, and provide training. Large companies tend to have in-house training facilities, and smaller companies are also increasingly providing funding for external training.
• Training might be for specific technical skills, or for more general skills like learning a new language. This makes employees more productive in the long run and also gives them the signal that the company sees them as a worthy investment.
One career-development incentive used by larger companies in India is internal company transfers. The Tata Group, a major conglomerate with business including cars, finance, steel, and BPO, tracks its talent and facilitates employee transfers across all companies in the group. This motivates employees by showing that they will not be trapped in one industry if they want to expand their marketability as an employee. With foreign companies, the possibility of transferring to an overseas job is also alluring.
Companies with these internal transfer programs often specify that employees cannot transfer until they have been employed for a set period of time, such as 18 months.
HR Problems at Jet Airways:
The case is about the retrenchment drama that unfolded in one of India’s leading aviation companies, Jet Airways (India) Limited (Jet), in late 2008. After showing the door to more than 1000 employees in a bid to streamline its operations, Jet was faced with immense criticism and opposition by various organizations and political parties.
ISSUES
» Analyze the HR problems faced by Jet Airways in 2008.
» Discuss various concepts related to hiring, firing, and compensation management.
» Understand the rationale behind Jet’s decision to lay-off employees and the reason’s behind its later decision to take back the sacked employees.
» Understand the importance of communication in an organization and analyze whether there were any loopholes in Jet’s organizational communication network.
» Understand the rationale behind the pay cuts initiated at the company.
» Understand how environmental variables could affect a company’s HR policies.
This is comes under the Industrial Disputes act 1947. 25-H Re-employment of retrenched workman.
RETAINING THE EMPLOYEES
In today's rapidly changing business environment, it is not only important to attract candidates, but at the same time to retain them. When an organization has a high employee turnover, it is important for the top management to immediately understand and analyze the causes and devise strategies to retain employees. High employee turnover also affects the morale of the other employees. These caselets discuss the causes for high employee turnover. They discuss the importance of having a good retention strategy and the role the management should play in retaining the employees
» Causes of high employee turnover in organizations
» Challenges faced by organizations in the process of retaining employees.
Nasscom estimates Indian IT
\Nasscom estimates Indian IT-BPO revenues to grow by 23-24 percent in FY09; it grew 29 percent last year in rupee terms to touch $64 billion. The underlying factor however remains addressing the shortage of skills and employee
Research on HR Outsourcing
• Mid-tier companies seeking HR outsourcing
• Chinese HR outsourcing market set to boom
• British study lauds Indian firms workforce training
• Getting HR metrics to work for you
• Is the Indian workplace ethically stretched?
Retention. Though western countries view India as a low cost destination, BPO employees contribute about $5 billion to the country’s GDP.
Repetitive low-end jobs, physical and psychological problems and inadequate growth opportunities are the major reasons cited for the high attrition rate. This disadvantage has increased the operating costs of BPOorganizations and is considered to be a threat to the industry.
BPOorganizations earlier paid huge salaries to attract a large number of employees. Though the high packages and sophisticated work environment in BPOs succeeded to attract a large pool of youngsters, they failed to sustain the pool. And the reasons range from physiological fatigue, psychological stress to fear of an elusive future.
Across the industry, there have been 12 typical causes of employee turnover
Features on HR Outsourcing
• Transforming the skills environment in India• Six tips to safeguard your BPO career
• Indian salaries likely to increase by 16% in 2009: Report
• The rise and fall of the BPO lifestyle
• Pace of effort required
• Sense of being overwhelmed
• Frustration of not being allowed to do a good job
• Repetition
• Day claustrophobia- being at the desk for extended time
• Rank and file regimentation
• The feeling of being scrutinized
• The feeling of not being appreciated by others
• Handling complaints and problems all day
• Odd work hours
• Pay
• Better opportunities elsewhere
By and large the pay factor is not huge and is often small, incremental differences. The challenge for HR folks then remains to address the following areas
• Broaden and extend the training of agent level employees and the responsibilities they have.
• Involving agent level employees in managing the centre -- quality improvement, forecasting, and collaboration with other teams and departments, establishing schedules, etc.
• Ensure everybody have an understanding of (and involvement in) the direction and values of the organization.
The essence is to make improvements, by improving upon the factors that cause them to be where they are. Second, as with any measure, factors must be accurate, complete and as unbiased as possible.
Research on HR Outsourcing
Mid-tier companies seeking HR outsourcing
More and more mid-tier companies are leveraging the benefits of HR outsourcing and soon the smaller firms would take this up at a scale that would beat the HRO operations of large corporations having 15,000 or more employees.
This has been stated in a new study conducted by Everest Research Institute, which found that the mid-tier companies (with an employee strength of between 3,000 to 15,000) are adopting HRO because of a growing supplier base that continues to bring forward focused offerings that support cost reductions, access to up-to-date technology and standardized processes.
“For a long time, HRO suppliers were mostly focused on larger companies with 15,000 employees or more. Serving these companies involves more complexity, more customization requirements and much longer implementation timeframes than the mid-market would require,” says Monica Barron, Vice President, HRO Research.
“To take advantage of the barely penetrated mid-level market, suppliers have developed profitable offerings by leveraging economies of scale and standardized solutions. This is why we’re seeing a significant increase in HRO suppliers - including offshore suppliers - and offerings focused on the mid-market buyer. And this, in turn, is really good for the buyer because they now have more suppliers and offerings from which to choose. The issue now becomes how to choose wisely.
Chinese HR outsourcing market set to boom
The outsourcing market for human resources is expected to gross more eighty billion dollars in China in the next year to 15 months.
A new study conducted by EquaTerra says that the Chinese market was moving at a very rapid pace and would grow by at least 25 per cent by the end of 2009. The market was valued at around 15 billion dollars five years ago.
As part of the study, the company sought responses from 15 top HR directors of foreign companies based out of China, who cited several reasons for not moving HR outsourcing to the region including data security and poor management control.
However, they were unanimous in the perception that over the next three to five years, a substantial part of HR administration functions would be offshored to China, including recruitment and payroll.
EquaTerra has however raised an alarm over the availability of skilled manpower to handle the growing demand from the outsourcing market, a factor that could well push some of the business India’s way.
British study lauds Indian firms workforce training
Indian companies, particularly in the IT and BPO segments have reached a point where they can teach the world many lessons on workforce training and development, a recent study has suggested.
The study, titled "How the Disciple became the Guru", released by the Kauffman Foundation and conducted by Duke University’s global engineering & entrepreneurship project team, is a research effort based on talks with leading Indian companies across sectors such as IT, BPO, banking and pharmaceuticals.
VivekWadhwa, the lead author of the study says that the researchers were surprised at India's ability in R&D despite a messed up education system. "It's not the universities that train these specialists, but the surrogate education system created by the Indian companies," said Wadhwa who is the Engineering executive-in-residence at Pratt School.
Companies in India go to colleges much before they hire in order to help students become employment ready, the study says and notes other such innovative practices developed by Indian companies to tap the talent pool. It refers to Satyam Computer's project of having 80 senior executives serve as mentors on university campuses and Infosys' initiative to hire and train final year engineering students for short-term projects.
Getting HR metrics to work for you
First the bad news. Attrition problems are getting any better for Corporate India. A new study reaffirms what we have known all along – the turnover is hitting firms where it hurts the most, their bottom lines. According to estimates, it accounts for more than 5 percent of a firm’s operating costs. And it’s not just one sector that is reeling from the blow. According to talent technology firm Global Talent Metrics, the annual attrition rates are as high as 30 percent across industries. BFSI with 44 percent and BPO with 35 percent are among the worst hit casualties.
As attrition reaches epidemic proportions, corporate boardrooms have turned into virtual war zones where HR heads and independent experts work out robust recruitment and retention strategies.
However, efforts alone don’t translate into rewards. A case in point is the use of HR metrics. A sound HR metrics program enables the organizational management to collect consistent information about employees, which alleviates decision-making. It also ensures that management and development activities remain relevant with the overall business strategy. However, over-enthusiastic HR heads forget that developing metrics requires a lot of thought.
Is the Indian workplace ethically stretched?
Did you know that 55 per cent of employees fudge travel figures or that 46 per cent believe that a call to their grandma in a faraway village at company expense is alright?
If as a manager, you are worried about increasing operational costs, then these figures should tell you exactly where to crack the whip! A recent survey by Team lease Services on workplace ethics found many more such behavioral shockers, something that Indian industry can ill afford at a time when competition is at our doorstep.
For example if 55.7 per cent of employees fudged expense accounts, costs are bound to go up. And what about the majority of 63 per cent staff who believe that carrying out personal tasks at work is par for the course? So, if productivity is taking a hit, who is to blame?
The survey, which is fourth in the series on “World of Work” conducted by TLS, attempts to track the changing scenario at workplaces across India. Here are some of the findings of this survey…
Features on HR Outsourcing
Transforming the skills environment in India
Mumbai, Friday, Aug 29, 2008: There is a constant refrain in the Indian IT and BPO sectors that less than 20 per cent of the 300,000 and more engineers who graduate each year are employable in the software industry without huge investment in learning and training inputs.
The BPO industry too has been investing heavily in internal training as well as partnerships with colleges to get some modicum of capability in the millions of graduates who come through the education system in our country with degrees but without any core vocational skill to hit the growing running in any firm that employs them.
And in recent times, many other sectors like retail, hospitality and healthcare have joined the clamor for a better skilled workforce. Will the great Indian promise and the “demographic dividend” that previous generations have left as their legacy remain as potential success that never gets translated into economic success of the people?
Our educational apparatus has failed to deliver what the industry needs and no number of finishing schools which are now mushrooming all over the country will compensate for a structural malaise in the learning content and processes.
Six tips to safeguard your BPO career
The financial meltdown in the United States has started impacting Indian offshoring industry. While companies are busy taking steps to reduce their risks and seek fresh growth avenues to replace their US-centric activity, individuals who are employed in this industry too should consider their options.
And those of you who have reaped the rewards of the booming BPO industry and the fast-growing KPO business, now need to take a few steps backwards and rethink their career strategies. But, before that they should take a spot analysis on their levels of financial security. Here are a few tips to help you tide over tough times...
Stick around with big companies: Does your employer have shallow pockets? Then you need to worry a bit as these companies are more prone to a slowdown than the large companies. So, if you are thinking of a switch-over to a start-up, better re-think for a bit more. The large companies offer you better financial security besides intangibles like better terms for your loans. Of course, there is no surety that a large company cannot go bust... just look at the bloodbath in the US.
Indian salaries likely to increase by 16% in 2009: Report
Salaries in India are expected to increase by 16 per cent in 2009, one of the highest in the Asia-Pacific region driven by strong economic growth and pressure on employers due to soaring inflation, a latest report said.
As per a report by the Hong Kong based compensation firm HR Business Solutions (HRBS) pay increases in the Asia-Pacific region are likely grow even as the economies are expected to be impacted by the global slowdown.
"The forecast pay increase in India averaging 16 per cent is one of the highest among all the countries," the report stated. The HRBS 2009 pay increase forecast is based primarily on four economic factors — GDP growth, inflation, unemployment, manpower demand and past pay increase trends.
Elaborating further it said that the Indian economy is reported to be cooling, but still it is expected to achieve a growth rate of 7-8 per cent in 2008, which is among the strongest in the region after China.
"In addition, it has the fourth highest inflation rate of over 12 per cent in 2008 which increases pay rise pressures on employers. Labour demand is still robust and there is a lack of sufficient supply of the skills-set required by India's rapidly growing services, manufacturing, construction and retail industries to boot," the HRBS report added.
The rise and fall of the BPO lifestyle
What was going on in the mind of the scriptwriter of the 2007 hit movie ‘Life in a Metro’ when he scripted the story around a call center? The protagonist of the movie wants to make big bucks and rise to the top in the call center he works for and he uses unscrupulous means to achieve that. The issue is that lack of seriousness and scruples is how the BPO industry is being perceived today.
Ten years ago it was unfathomable for a plain graduate to earn a good income -- forget extravagant pay cheques. You had to support that graduate degree with something that made you more saleable in the job market -- an MBA degree perhaps.
And then things changed when India discovered the great BPO opportunity. Sameer Mehta did not even have his graduation result before he had his first job with a leading international call center. “I suddenly moved from a life of a paltry pocket money of Rs 1000 to a neat 16 k in my pocket. It was amazing and I was barely 19,” he quips. He was going to the coolest office wearing shorts and flip-flops with his hair gelled, back-slapping buddies (including women colleagues) on the way to his desk
