Feature

The ultimate victim

Whenever an organization faces adverse conditions, it is always the employees who suffer the most. Sudipta Dev on what could be done to lessen their problems

It is the employees who suffer the most when an organization faces tough times, which could range from M&As to recessionary market conditions to bankruptcy. Even those employees who are able to retain their job live under the fear of an uncertain future and feel mentally traumatized by whatever is happening around them. Productivity and morale are both affected adversely and this further aggravates problems for the organization. While there is no single solution, for the management, it is the time to be sensitive to the needs of the employees as this eventually hits the already shrinking bottom line.

This is an issue which has become a cause of major concern across organizations. Dr. Cabot Jaffee, Chairman, Global Talent Metrics and an HR thought leader stated that while on the surface one would expect that employees whose jobs have been spared would be grateful for it, but evidence suggests quite a contradictory version. It shows that that they feel overworked, threatened and vulnerable. “One of the most visible signs is lack of morale, which directly affects performance. At the time when business is contracting, employee morale threatens to make matters even worse.” This leads to “recession fatigue” amongst employees. It is a situation where the company experiences a series of problems that include a decline in productivity, deteriorating customer service, increased sick days, falling sales, higher costs, and lower profits.

Right organizational strategy

As organizations try to find out ways and means to combat declining profits, they need to realign their equation with their employees. Finding the right HR strategy could be the best solution. Kris Lakshmikanth, Founder CEO & Managing Director, The Head Hunters India, albeit believes that there is no right or wrong strategy, “Basically, HR is supposed to be the conscience keeper of the management. They are the bridge between the company and the management and they make each other understand their pain points, challenges, etc.”

Communication is the key to better employer-employee relations, in particular during these times when rumors are rife and there are many chances of messing up the work culture. “Maintaining transparency and installing an open-office culture is vital. Communicating with your employees is key to ensuring that you send those positive messages and assurances that the management is working to the best interests of the whole company. Other routine employee development initiatives should continue—“Its Business as Usual” and innovative workshops should be designed to maintain employee morale during these difficult time,” stated Nick Cox, Managing Director-Continental Europe & Rest of World, Hays Plc.

Impact of cost-cutting

It is important to introduce cost reduction methodologies with prudence and constantly explain to the employees the significance of the actions. Drastic and sudden cost-cuttings, particularly in salary packages, should be avoided altogether. Rohit Ramani, Director–Sales & Marketing, EmmayHR a leading executive search and selection company, explains why, “It leads to creation of panic, vexation and dissatisfaction among employees, which will further hamper and nullify the good work done so far.”

EmmayHR advises its clients to handle such measures with minimum damage to the workforce and reputation of the company. “The HR advisory should help them understand the reason and motive of their actions. Also, how their actions are contributing to the welfare of the company. It’s also important to note here that all cost cutting measures should not only be targeted at the employees. Employers need to show sensitivity and equal participation in this process,” pointed out Ramani.

Walk the talk

There are many initiatives that need to be taken, beginning from the top management itself who have to literally “walk the talk” by setting an example before others. “They should take a cut in salary or not take their bonuses. I call this self sacrifice to set the right tone and example for the rest of the company. In any successful company, you will find that the CEO sets the right example for the others to follow. If the organization has to have a salary cut, then the CEO should be the first one to volunteer,” said Lakshm-ikanth. This apart, the top management are cutting their own perks. For instance, travelling economy, staying in guest houses, transit/ service apartments, etc.

The recruitment scenario

The recruitment market presents a grim picture. It is a known fact that there is virtually no hiring by most IT companies, in particular lateral hiring has come to a standstill. From campus hiring to appointment of vice presidents, irrespective of the salary or position, offer letters have been cancelled at short notice. The situation is expected to remain unchanged till the end of the year. Apart from the recession, the Satyam debacle has further affected the IT recruitment market.

There is naturally a lot of concern regarding the fate of the 43,600 Satyam employees. It is believed that most of them will have jobs though the future of the bench staff seems uncertain, “For some this could mean relocating to tier III cities/towns. For others it could be taking salary cuts. For the rest it could mean a long wait before they get a job,” added Lakshmikanth.

Ramani asserted that an incident like this can serve as a reality check to the IT industry. This is probably probing fresh graduates/exiting professionals to be more receptive and open to opportunities outside the IT sector. According to him, for employees at the mid and senior level, within the technology space, there will be openings in tier I-II organizations and the same will be the case with people with niche skill sets. The problem will arise for employees at the junior level and those with vanilla skill sets where the supply will be greater than the demand.

Cox maintained a positive outlook, and said, “These employees are talented and have served the interests of clients for so many years; delivering value with the individual expertise and skill set they have across different domains. Recent events suggest the possibility of an acquisition either in part by multiple companies or as a whole—one of the main reasons of the acquisition will be to take advantage of the rich talent pool that Satyam has.”

He felt positive about the impact on the recruitment scenario as well as the opportunities are immense. There are global companies out there who have seen domestic companies in India deliver value through their services and they still remain committed to the Indian market with plans to continue sending processes to offshore locations in India. “As far as the effect of the Satyam scam goes, we might see companies getting cautious while signing new contracts or renewing the existing ones, but overall not much of an impact,” said Cox. As a new entrant into the Indian market, Hays is excited by the opportunities and sees that the market has huge potential, particularly in specialist recruitment space.

While there can be no single approach to finding a solution, every organization needs to make efforts to mitigate the concerns of the employees during these tough times, if not for anything than to retain the key performers whose low morale or eventual exit will hamper its already struggling business.

sudipta.dev@expressindia.com