Recruitment, employee policies and compensation are the top three areas of focus as per PricewaterhouseCoopers
The report ‘Managing the effects of the Downturn – Rethinking your approach to People‘ was released by PricewaterhouseCoopers (PwC) today. It reveals how Indian employers are dealing with, or plan to deal with people issues during this downturn. The report is based on an online dipstick survey of over100 respondents from over 12 sectors across industries
As per the report, the top three areas of focus that are being addressed by most companies during this downturn are recruitment, employee policies and compensation. While larger companies are modifying their hiring plans to align them with revised growth estimates, the smaller employers are focusing on talent and performance management. In fact, some employers are on the look-out for good talent that can now be acquired at an affordable cost. The report however confirms that most companies have frozen or deferred hiring and are adopting a “wait and watch” policy.
In the area of policies and practices, companies have imposed curbs on travel, allowances and benefits. Some are also outsourcing people related administrative processes such as payroll, attendance management and management of retirement benefits. As regards compensation, bonuses are being pared down, fixed pay increases are being moderated if not frozen, and benefits and allowances are being reviewed at least at executive level.
Sankar Ramamurthy, India leader – People and Change practice of PricewaterhouseCoopers, commented: “Most companies in India are gearing up for tough times but are avoiding knee-jerk reactions. Employers are uncertain about the extent, duration and depth of the economic slowdown and the timing of a recovery. Therefore, they are being cautious about spending and making investments, and this caution is reflected in the way they plan to manage human resources.”
According to the report, most companies are shying away from employee layoff as a way of controlling costs, with 84% of the respondents voting against it. In part, this reflects cultural factors at work and the reputation loss that employers fear they may have to deal with as a result of large-scale layoffs. A significant majority of respondents said they planned to re-deploy their workforce to activities and businesses that were relatively better off and that they were proposing to re-skill their workforce to make this possible.
Sankar Ramamurthy concluded: “Operational efficiencies and process improvement did not get sufficient attention in the past as CEOs and HR professional’s main concern was finding and keeping talent. With a shift in employee behavior, this is probably a good time to focus on redefining the role, effectiveness and efficiency of the HR function. Similarly differentiation in performance and rewards suffered at the altar of retention. But the current environment provides the necessary impetus to employers to drive performance management and differentiation.”
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