Description
The doc explains about challenges faced by the HR Managers and the various factors hindering the growth in an organization.
Defeating the factors hindering the growth
Challenges in front of HR managers in India
Defeating the factors hindering the growth
The rapid globalization of economies and businesses worldwide has forever changed the way companies do business. Today it is common for IT companies to announce a major expansion or setting up new operations in India. Companies are investing valuable time, resources and have even deputed key managers to manage things on the ground. Top management at the headquarters often does not have a complete picture of the challenges that needs to be conquered to succeed in India. Often times these challenges are not accounted to in the initial planning. As a result, the operations in India can have a series of false starts – which causes anxiety, stress and frustration throughout the organization.
The following report briefs some of the most important challenges faced by HR department and also gives some suggestions to reduce them.
Major challenges faced by HR manager in India today can be: ? ? ? ? ? Recruitment Process Training Performance Management Pay Structure Attrition and Retention
The problems mentioned above are discussed in detail one by one. The basic cause behind these problems is different in some cases than that of the western countries. Indian social and cultural factors also play an important role to drive them.
1
Recruitment: It is the number one challenge in any organization. This is because on the basis of selection of people your final efficiency of the firm depends. So the recruitments need to be done carefully. Further, while designing the recruitment process an HR manager need to have an answer for some points. These may include the reduction in cost of hiring and time to hire, listing down competencies required to fulfill the business strategy. As India is booming like anything in the IT sector, an HR manager in this sector has to deal with human assets so it becomes important and have a good quality of people in the organization. HR manager has to take the recruitment planning in very serious manner to ensure that he gets the best talent for the organization.
Training: Generally, the newly recruited peoples’ level of competencies and their job expectations can only be fully understood once they have entered the initial training program. Once people move up the ladder there is little time for training. There is a lack of leadership training on the operational level which is reflected on the work floor and consequently on the job satisfaction of the employee. The manager needs to chalk out a suitable strategy for training & development so that employees are well equipped to handle the challenges in advance.
Performance Management: Performance management is needed to assess the contribution made by each employee in the total output. This is used to judge the high performers, moderate performers and the low performers. The high performers need to be rewarded so that the middle level gets motivated. And the low performers need to be sacked because of very low or no effective role played; else this will lead the growth in wrong way. Now in India where seniority plays very crucial role or there are employee unions which does force HR manager not to take harsh decisions against low performers or the senior employees for not to have promotion.
Pay Structure: This plays a key role as the new job opportunities are opening in the country in various sectors because many new companies are setting their base in India. And these companies are offering 2
more incentives from those of domestic ones. So to keep hold of employee and to keep him motivated to work has become important thing these days. Again, considering an IT sector, which is one of the high paying industries and very competitive industry, they have to attract best talent, offer best possible compensation package to the employees. But the real challenge should be how HR managers are able to incorporate all the subsystems. Ultimately this would help the organization for achieving exceptional performance.
Attrition and Retention: Recruitment reduces once the organization is able to keep the loyalty of the employees. Attrition remains an enormous challenge as the average BPO attrition rate was 30-35 percent in two years ago in India. Attrition rate in BPO industries in the country is way high. At Nasscom Hewitt-Associates Survey shows that the cost of attrition is 1.5 times the annual salary of an employee. Costs are due to loss of productivity, temporary replacement, loss of knowledge and new recruitment and training. The attrition rate is linked to a number of causes, one being the average age of the employee. 87% of the BPO employees are under the age of 30. Some people link attrition to career opportunities. The work environment has rigid rules and strict monitoring and employees become affected by sleep disturbances due to working irregular hours. Last but not the least, regular poaching by competitors contributes to employees leaving the organization for a better salary, a better position or career opportunities.
The above are few of the important problems but not the only problems faced by HR team in the organization. Other problems such as bring desired metamorphosis, constant job enrichment, nurture leadership skills and motivating employees from time to time. Also reducing crosscultural barriers in communication is required as India has a lot of diversity in terms of language, culture and religions.
The solutions to these problems can improve the overall efficiency of the organization to the great extend.
3
Although selection decisions are not always based on exact fit between person and the job, being fair in selection process is very important. India has the largest pool of English speaking professionals in the world. India graduates about 260,000 engineers a year and about 2 million graduates. With India becoming a centre of all IT/Software/Service industry, the competition to attract the best talent has heated up. The demand for talent is estimated to reach 4 million by 2008 (according to McKinsey). This forces companies to develop complex recruitment process to reach out to this vast pool of talent. In addition to initial recruitment, companies have to work on employee retention as well. Attrition rates in India are far higher than that of in western. For the required demand of talent, almost all companies are going after the same set of people – this implies that every employee in a company will be approached by a recruiter from another company. So the retention policies and practices have to be uniquely developed for India. The policies of the western country are rarely applicable in here. HR need to be sure that the job profile they are looking for not only matches with the skills and competencies but also the job expectations of the candidate. An open discussion with the candidate will give insight into how long he will be staying with organization.
A trained workforce is a more productive workforce. Many employees in India may be good in written English, but they may need training in verbal communication skills. BPO operations or call centers need to provide voice/accent training programs. Even software engineers have to be trained in basic business etiquette and the standard business communication skills. The training programs have to be tailored to address the deeper cultural issues that enable new employees in India to communicate effectively with their US/EU counterparts. The training programs must be conducted by experts who understand the local Indian work culture and work culture of the parent organization. In addition, new employees have to be trained in technical tools – to make them productive in the actual work environment. Often times, training in specialized tools is not available in India. This might imply that trainers have to be flown into India or employees need to flown to US or Europe.
4
If an issue arises after doing performance management, several factors such as seniority; unions etc. can prevent HR from taking a strict stand. But these issues need to be sorted out creatively such as, by job rotations, new skill development. But to retain the top performers, HR should apply different theories. It should give them reasons to stay. High performers often are capable of motivating themselves – and one thing that motivates them the most is ambition. Thus an employee’s ambition is an advantage when used properly and a threat if not handled properly. They should see career development prospectus in the firm. Especially for high-tech workers in IT industry, HR should emphasize on three ideas for retention of the good performers: 1. Work environment (e.g. challenging work, atmosphere, physical environment) 2. Educational opportunities or Career growth 3. Quality of life
Finally, while designing pay structure, efficiency and fairness need to have equal precedence. Knowledge of compliance is also required. Internal alignment and external competitiveness helps to reduce employee turnover due to incentives. Now IT companies in India are having ESOP (Employee Stock Ownership Plan) with the compensation package as well. Management should ensure that right people get the right pay. System will not achieve its objective unless it is properly managed.
In a conclusion, the daily reality and the challenges for HR managers in India are truly different from challenges faced in the West. Even though the attrition rate is high in India, HR managers are very people-oriented, while their western colleagues are far more process and task oriented. The happiness of the employee and consequently the well-being of his extended family are important to the Indian organizations. The employee is given leave to take his mother to the hospital regardless of whether other siblings are available to do so. The employee is allowed to attend the wedding of a neighbor or to go and mourn a family member on the other side of the country. The well-being of the employee on a personal level is of benefit to the organization. Western HR managers should learn from this and take this into consideration when working with Indian colleagues.
5
Bibliography
? Robbins, Stephen P, Timothy A Judge and Seema Sanghi. Organizational Behavior (12th edition), Pearson Prentice Hall, 2007 ? ? ? ? ? ? www.shl.com www.expatica.com www.techtarget.com mcs-india.net arunkottolli.blogspot.com Milkovich, GT and Newman JM (2005) Compensation (8th edition), Tata McGraw-Hill, pg. 14-20 (Note on The Pay Model) ? McMillin, DC (2006, Jan 6) Outsourcing identities: Call centers and cultural transformation in India. E&PW, pg. 235-241
6
doc_171944569.docx
The doc explains about challenges faced by the HR Managers and the various factors hindering the growth in an organization.
Defeating the factors hindering the growth
Challenges in front of HR managers in India
Defeating the factors hindering the growth
The rapid globalization of economies and businesses worldwide has forever changed the way companies do business. Today it is common for IT companies to announce a major expansion or setting up new operations in India. Companies are investing valuable time, resources and have even deputed key managers to manage things on the ground. Top management at the headquarters often does not have a complete picture of the challenges that needs to be conquered to succeed in India. Often times these challenges are not accounted to in the initial planning. As a result, the operations in India can have a series of false starts – which causes anxiety, stress and frustration throughout the organization.
The following report briefs some of the most important challenges faced by HR department and also gives some suggestions to reduce them.
Major challenges faced by HR manager in India today can be: ? ? ? ? ? Recruitment Process Training Performance Management Pay Structure Attrition and Retention
The problems mentioned above are discussed in detail one by one. The basic cause behind these problems is different in some cases than that of the western countries. Indian social and cultural factors also play an important role to drive them.
1
Recruitment: It is the number one challenge in any organization. This is because on the basis of selection of people your final efficiency of the firm depends. So the recruitments need to be done carefully. Further, while designing the recruitment process an HR manager need to have an answer for some points. These may include the reduction in cost of hiring and time to hire, listing down competencies required to fulfill the business strategy. As India is booming like anything in the IT sector, an HR manager in this sector has to deal with human assets so it becomes important and have a good quality of people in the organization. HR manager has to take the recruitment planning in very serious manner to ensure that he gets the best talent for the organization.
Training: Generally, the newly recruited peoples’ level of competencies and their job expectations can only be fully understood once they have entered the initial training program. Once people move up the ladder there is little time for training. There is a lack of leadership training on the operational level which is reflected on the work floor and consequently on the job satisfaction of the employee. The manager needs to chalk out a suitable strategy for training & development so that employees are well equipped to handle the challenges in advance.
Performance Management: Performance management is needed to assess the contribution made by each employee in the total output. This is used to judge the high performers, moderate performers and the low performers. The high performers need to be rewarded so that the middle level gets motivated. And the low performers need to be sacked because of very low or no effective role played; else this will lead the growth in wrong way. Now in India where seniority plays very crucial role or there are employee unions which does force HR manager not to take harsh decisions against low performers or the senior employees for not to have promotion.
Pay Structure: This plays a key role as the new job opportunities are opening in the country in various sectors because many new companies are setting their base in India. And these companies are offering 2
more incentives from those of domestic ones. So to keep hold of employee and to keep him motivated to work has become important thing these days. Again, considering an IT sector, which is one of the high paying industries and very competitive industry, they have to attract best talent, offer best possible compensation package to the employees. But the real challenge should be how HR managers are able to incorporate all the subsystems. Ultimately this would help the organization for achieving exceptional performance.
Attrition and Retention: Recruitment reduces once the organization is able to keep the loyalty of the employees. Attrition remains an enormous challenge as the average BPO attrition rate was 30-35 percent in two years ago in India. Attrition rate in BPO industries in the country is way high. At Nasscom Hewitt-Associates Survey shows that the cost of attrition is 1.5 times the annual salary of an employee. Costs are due to loss of productivity, temporary replacement, loss of knowledge and new recruitment and training. The attrition rate is linked to a number of causes, one being the average age of the employee. 87% of the BPO employees are under the age of 30. Some people link attrition to career opportunities. The work environment has rigid rules and strict monitoring and employees become affected by sleep disturbances due to working irregular hours. Last but not the least, regular poaching by competitors contributes to employees leaving the organization for a better salary, a better position or career opportunities.
The above are few of the important problems but not the only problems faced by HR team in the organization. Other problems such as bring desired metamorphosis, constant job enrichment, nurture leadership skills and motivating employees from time to time. Also reducing crosscultural barriers in communication is required as India has a lot of diversity in terms of language, culture and religions.
The solutions to these problems can improve the overall efficiency of the organization to the great extend.
3
Although selection decisions are not always based on exact fit between person and the job, being fair in selection process is very important. India has the largest pool of English speaking professionals in the world. India graduates about 260,000 engineers a year and about 2 million graduates. With India becoming a centre of all IT/Software/Service industry, the competition to attract the best talent has heated up. The demand for talent is estimated to reach 4 million by 2008 (according to McKinsey). This forces companies to develop complex recruitment process to reach out to this vast pool of talent. In addition to initial recruitment, companies have to work on employee retention as well. Attrition rates in India are far higher than that of in western. For the required demand of talent, almost all companies are going after the same set of people – this implies that every employee in a company will be approached by a recruiter from another company. So the retention policies and practices have to be uniquely developed for India. The policies of the western country are rarely applicable in here. HR need to be sure that the job profile they are looking for not only matches with the skills and competencies but also the job expectations of the candidate. An open discussion with the candidate will give insight into how long he will be staying with organization.
A trained workforce is a more productive workforce. Many employees in India may be good in written English, but they may need training in verbal communication skills. BPO operations or call centers need to provide voice/accent training programs. Even software engineers have to be trained in basic business etiquette and the standard business communication skills. The training programs have to be tailored to address the deeper cultural issues that enable new employees in India to communicate effectively with their US/EU counterparts. The training programs must be conducted by experts who understand the local Indian work culture and work culture of the parent organization. In addition, new employees have to be trained in technical tools – to make them productive in the actual work environment. Often times, training in specialized tools is not available in India. This might imply that trainers have to be flown into India or employees need to flown to US or Europe.
4
If an issue arises after doing performance management, several factors such as seniority; unions etc. can prevent HR from taking a strict stand. But these issues need to be sorted out creatively such as, by job rotations, new skill development. But to retain the top performers, HR should apply different theories. It should give them reasons to stay. High performers often are capable of motivating themselves – and one thing that motivates them the most is ambition. Thus an employee’s ambition is an advantage when used properly and a threat if not handled properly. They should see career development prospectus in the firm. Especially for high-tech workers in IT industry, HR should emphasize on three ideas for retention of the good performers: 1. Work environment (e.g. challenging work, atmosphere, physical environment) 2. Educational opportunities or Career growth 3. Quality of life
Finally, while designing pay structure, efficiency and fairness need to have equal precedence. Knowledge of compliance is also required. Internal alignment and external competitiveness helps to reduce employee turnover due to incentives. Now IT companies in India are having ESOP (Employee Stock Ownership Plan) with the compensation package as well. Management should ensure that right people get the right pay. System will not achieve its objective unless it is properly managed.
In a conclusion, the daily reality and the challenges for HR managers in India are truly different from challenges faced in the West. Even though the attrition rate is high in India, HR managers are very people-oriented, while their western colleagues are far more process and task oriented. The happiness of the employee and consequently the well-being of his extended family are important to the Indian organizations. The employee is given leave to take his mother to the hospital regardless of whether other siblings are available to do so. The employee is allowed to attend the wedding of a neighbor or to go and mourn a family member on the other side of the country. The well-being of the employee on a personal level is of benefit to the organization. Western HR managers should learn from this and take this into consideration when working with Indian colleagues.
5
Bibliography
? Robbins, Stephen P, Timothy A Judge and Seema Sanghi. Organizational Behavior (12th edition), Pearson Prentice Hall, 2007 ? ? ? ? ? ? www.shl.com www.expatica.com www.techtarget.com mcs-india.net arunkottolli.blogspot.com Milkovich, GT and Newman JM (2005) Compensation (8th edition), Tata McGraw-Hill, pg. 14-20 (Note on The Pay Model) ? McMillin, DC (2006, Jan 6) Outsourcing identities: Call centers and cultural transformation in India. E&PW, pg. 235-241
6
doc_171944569.docx