Economic Slowdown - An Opportunity

Economic slowdown is bound to pose some major challenges for corporates, but it does provide some interesting opportunities too, especially from an HR perspective.

Post the meltdown, employee expectations with regards to salary hikes during job changes are bound to mellow down. We already have reports that the average salary jumps during job changes are lowering to levels of 20-25%, down from 35-40%. While salary used to be the key factor for job changes, post the downturn, employees are likely to become wiser and take a more long term perspective when changing jobs. One can sense that job security will hold a more premium position, in the list of priorities, than it has done in the past.

Long Term View

Another fact that the downturn has highlighted is the importance of working in a reputed, professional and values based firm. There are organisations that at the very first hint of hard-ship will retrench employees and we already have enough examples of that. However, in the past, since the economy was booming and nearly all sectors were doing extremely well, even a remote thought to downsize hardly arose in the minds of most companies. More importantly it didn’t occur in the minds of the employees or prospective employees. Hence, since the industry was too bullish, job security was never a key deciding factor for employees when they went looking out for a job.

However, the current situation has made retrenchments a real possibility and we have even had few companies showcasing the same. Hence, in future, I reckon employees are going to lay a premium on the management ethos and culture of the organisation before they make a change. Organisations which are deemed to be employee friendly and having a professional management culture will hold an advantage in hiring talent than the companies which are perceived as more cut throat having a hire and fire culture.

Employer Branding is key

The above factor is hugely advantageous to the reputed professional organisations for attracting talent and it also provides an opportunity to the rest to improve their respective employer branding by working on building a professional work culture and show-casing the same through media, industry bodies, academic institutions etc. Indeed, this provides a very exciting proposition to HR professionals across corporate India. As of now employer branding has not really taken off in corporate India but, hitherto, I do see that in the medium to long term, this aspect will gain prominence and will become a key deliverable for HR professionals.

HR taking charge

Not very long ago corporates were running from pillar to post to hire talent. A high percentage time of HR professionals was devoted to recruitment. Steep growth paths of corporates across sectors left hardly any time for management to develop leadership pipeline to sustain and manage future growth levels. However, the current scenario of lower future growth prospects does provide a good opportunity for corporates to reflect and devote more time and focus on building a healthy leadership pipeline, so come the next phase of high growth, the companies have a strong bench strength to manage the growth trajectory. Now is the time when organisations can really put their might behind developing robust talent management processes in their set-ups. The most effective talent management systems are owned by the top, ably facilitated and supported by HR. However, in the initial stages HR must take the ownership to drive the process, prepare coach and hand-hold senior leadership to lead it while HR eventually acting as a facilitator.

Another key focus area for corporates is going to be increasing employee productivity and efficiencies. The current meltdown provides an opportunity for organisations to ‘review the way they work’. In order to improve efficiencies and productivity to better their top-lines and already stretched bottom lines, companies start exploring innovative ways to improve their systems, optimise costs, decrease inventories, reduce cycle times and introduce great value innovative products. The name of the game is ‘innovation’. HR can play a key role in building an environment and culture of innovation within the organisation.

So, one can see quite a few silver linings, leave alone one, in today’s environment consumed by the dark clouds of gloom and doom. The trick is to start working on these opportunities, so when the next steep growth phase comes, you are right in front of the pack to gain competitive advantage.



Ref: Randeep Sisodia