The present state of recession in the IT Industry – as a Human Resource Manager how are you going to undertake Human Resource Planning at Macro Level to tide over this crisis?
Human capital formation is acknowledged as one of the most potent sources in contributing directly and significantly to economic growth. As a result even the objectives of economic planning and priorities thereof, began to be shifted away from purely growth oriented development strategies to those that recognize and partly remedy the past neglect of such social sectors like population, planning, health, education, housing, social security and other social services. The objectives of HRP at macro level are to ensure that the organisation:
a) Obtains and retains the quality and quantity of human resources it needs at the right time and place; and b) Makes optimal utilisation of these resources.
Human resource planning is the formal process of linking organizational strategy with human resource practices. It is about perceiving organizational practices as a whole and not piecemeal. In a competitive climate, organizations need to use models and approaches that secure ‘uniqueness’ of operations along with enhancing ‘organizational capability’.
Today, the world is going through, a global economic turmoil. This recession affects almost all the fields especially IT field. To overcome the adverse effect of the economic slowdown, we should plan an effective human resource policy at macro level. Human resource plan is designed to pay attention to shaping the priorities of the H R function than on supporting activities relating to the organization’s functioning as a whole.
The economic crisis of 2008/2009 has touched every industry and profession, radically altering the hiring landscape. Major layoffs, rising unemployment, and lowered profits have reshaped the way workers are hired and fired, and dramatically highlighted the need to rethink workforce planning. Now, the question lingering over the heads of business leaders everywhere is: What will the successful post-recession business look like?
Here, we wanted to find out how what steps they are taking in response to the crisis, how their priorities and practices have changed, and what they predict the HR landscape will look like as the economy recovers.
This study is focus on the following objectives:
1.How HR Processes got affected by Recession?
2. What was the Reactions of Recession?
3. What HR steps Companies are taking to prepare for Recovery from Recession?
4. What are the Envision on post-recovery staffing model?
5. What are the Roles of Temporary Workforce?
6. What are Managed Serviced Program & its Benefit?
First let us brief about Recession. A recession is a contraction phase of the business cycle where significant decline in economic activity lasts more than a few months, which is normally visible in real GDP real income, employment, industrial production, and wholesale-retail sales.
The current economic recession has hardly spared any country on earth. Rich countries like USA, UK, Germany, Australia, Japan, and Canada almost all the rich countries have got badly hurt from the recession. So, there is no reason to be surprised to know that Indian economy is also getting hurt from the global economic recession.
As a Human resource manager planning is one of the most important sources in contributing the economic growth. To overcome from the recession in IT industry I would like to retain and obtain pure quality of human resources all ways at the right time and at the right place. I ensure that all the resources are utilized properly .I as a human resource manager responsible for corporate plan along with organizations purpose as the top most priority. The KRA at macro level are:
1- Determine the requirement level in the organization keeping recession in mind.
2- To get the best from the resources available within the organization.
3- Assist productivity bargaining.
4- Evaluate cost of man power in any upcoming new projects coming.
5- Analyze the cost of all the overhead and value associated with it with the function
6- Need to decide whether certain activities need to be sub contracted.
7- Need to provide best training in order to retain talent.
8- Anticipate redundancies.
9- Need to forecast future requirement.
10- Serve as a basis of management development programme
The human resource planning is one of the most crucial, complex and continuing managerial function. It is a multi step function with various issues. The issue which needed to cater first are 1- Deciding objective and goal.2- Estimating future organizational structure ,3- Auditing human resources,4-Planning job requirement and job description.5- development of human resource plan.
In the recession time in the IT industry it is very important to relate future human resources to future enterprise need so that the return on investment on human gets maximized. The company’s human resources mamager is as much an advocate for the organization as it is for the employees. The responsibility to serve the interests and needs of both can be challenging, especially during a recession when it could difficult to sustain both the company and its workforce. The HR issues during a recession demand an even greater commitment to achieving stability for the company and assuring employees that they won’t endure the harsh effects of a recession.
Strategic direction is an ongoing discussion between HR and company’s leadership. During a recession, HR Manager’s involvement in developing the company’s strategy should be a priority. Workforce planning, compensation structure and employee satisfaction aren’t just HR goals — they’re organizational goals because the workforce is company’s most valuable resource. Sustaining company’s operations and its profitability largely depends on employee productivity. The communication between HR Manager and the company’s leadership should be candid, frequent and must include communication with employees about the company’s direction.
If the company is recession-proof, meaning it provides necessary products or services, the role of HR manager is to remind employees that the company is forging ahead despite an economic meltdown. As the saying goes, the only sure things in life are death and taxes; therefore, the most recession-proof businesses are likely mortuaries and accounting firms. On the other hand, if the company will be affected by a recession, HR manager’s role is to assist company leaders in describing the business strategy for staying afloat and keeping employees apprised of the company’s status and direction.
The employee turnover during a recession could be minimal simply because companies that aren’t recession-proof are closing, which means there are fewer job market opportunities. Leaving a job with a company that is surviving the recession for another one that might not survive could be a bad decision. Therefore, HR’s primary job includes communicating with employees about the company’s status, what it’s doing to be profitable and what it needs the employees to do to ensure the company’s survival. This conveys two important messages. It says you care enough about your workforce to keep them informed and you value their contributions in helping the company make it through the recession.
If I am in a position where I need to hire additional staff, ensure that I am not making any cuts to current employees’ wages. That is likely to make employees wonder if their livelihood is a priority or if the company places more value on input from outsiders. Provide training for employees to take on new responsibilities instead of recruiting an external candidate to do the job. Effective crisis management doesn’t mean eliminating training for employees, according to The Boston Consulting Group 2009 survey of HR measures. In fact, the joint survey conducted with the European Association for People Management revealed that more than 30 percent of the companies that scaled back training — individual and special training — was less effective and demonstrated lower commitment levels during a crisis, such as a recession. Training also conveys the important message that you’re investing in your existing staff, training them to work cross-functionally and thereby preparing them for continued employment in case their current jobs are eliminated because of the recession. Layoffs
If HR must lay off workers, establish a communication strategy that gives employees plenty of notice before the actual layoff. Consult the U.S. Department of Labor Worker Adjustment and Retraining Notification Act, WARN, to determine if you meet the criteria for complying with WARN regulations. Ease the blow of unemployment by scheduling the layoff so it doesn’t coincide untimely with periods such as the year-end holiday season. HR should offer outplacement services to employees who are forced to seek employment elsewhere. Outplacement services can range from career counseling sessions with experts to resume-writing services or time off from work for interviews. Compensation and Benefits
HR might not be able to guarantee that employees will get year-end bonuses or even a wage increase, but HR can help employees figure out ways to increase their take-home pay. When employees have questions about their wages, tax withholding and liability or the cost of benefits, such as health insurance premiums and retirement savings ensure the company can provide answers. An HR benefits specialist can guide employees through the decision-making process by advising them to cut back on, say, charitable contributions that are being deducted from their net pay. The benefits specialist also can refer employees to resources for managing their finances, such as an employee-assistance program.
HR managers reported opting for a wide range of practices to respond to the severe pressures presented by the recession. These practices range from changes to pay and pensions, staffing and HR systems, to changes in working time arrangements. While pay freezes for some or all employees were common, pay cuts too operated in a substantial number of firms. Other pay-related measures adopted include lower pay or salary scales for new entrants, bonus cuts and changes in pension arrangements. In terms of headcount and staffing arrangements, changes were also pronounced in that most firms in the survey experienced redundancy (compulsory and voluntary) for some employees. Freezes on recruitment were also commonly instituted. The effects of the recession on a wide range of business and the subsequent pressures experienced by HR managers, was examined next in chapter four.
The HR managers present at the focus groups outlined in detail the ways in which they were required to cut and control employee costs in response to deep and acute commercial pressures. Where participants had been taken up for much of the previous boom years with recruiting and retaining staff, the main hub of activity now for most of the participants was on finding ways to control and reduce pay and headcount. Relative to the difficulties of doing this, other areas of HR practice received less attention, although some firms reported continued recruitment efforts for specific positions or new skills sets. Some firms also took measures such as selective pay rises or promotions to retain valued staff. Others operated formal talent management programmes, though these generally predated the recession. Staff redeployment was presented as a routine measure in responding to the recession in non-union firms, but appeared to be more problematic in unionized firms, where it sometimes cut across agreements with unions or lines of demarcation between different jobs.