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Rediff.com  » Business » Meltdown: Is the worst behind us?

Meltdown: Is the worst behind us?

May 28, 2009 13:17 IST

You have had enough bad news on employers asking their staff to take pay cuts, forcing workers to go on unpaid vacations and resorting to layoffs. But here's something that signals that the worst may be over.

In a quarterly study released last week on hiring and firing trends in some of the world's most important employment markets, Antal International, a global recruitment services firm, said the current hiring levels for India are up 47 per cent after a substantial dip at the start of 2009.

Antal's CEO Tony Goodwin says the period of panic and gloom does finally seem to be behind us. Recovery may still be a good way off, but it seems we are now better prepared than we have been for quite some time, he adds.

The optimism about the job market in India showing substantive signs of recovery is shared by others as well. In its recent survey, Hewitt Associates said that more than 60 per cent of companies in India are still hiring and that salaries in India will grow by 8.2 per cent this year.

Though this is substantially lower than the average 15 to 20 per cent growth in earlier years, the fact is that it is still the best in Asia-Pacific.

A survey by the firm said none of the 'Best Employers' have reduced their workforce and the HR budget is still being spent on learning and development, with many of the Hewitt 'Best Employers' saying this is the right time to invest in people who will help them ride through the economic crisis.

Even globally, not everything is lost. There are many firms that are still willing to go to almost any length to hire talent. For example, according to research firm Universum USA's 2009 survey of more than 60,000 undergrads across the US, which is conducted annually for <I>BusinessWeek, </I>firms such as Walt Disney have started offering even pet insurance and Apple is employing people whose official job title is 'genius'. What is even better news is that the 100 'Ideal Employers' in the survey are still hiring in large numbers.

Others like Internet networking and communications equipment giant Cisco Systems is using collaborative leadership to retain talent. Cisco used to rely on about 10 top executives to take key decisions; it now involves 500 of them. Boards and councils that represent the whole business, rather than individual champions, drive key projects and new products.

Companies in India aren't far behind. Take Tata Motors, India's largest commercial vehicles firm isn't exactly in the pink of financial health and not many expected it to give increments this year. Yet, the firm has decided to go ahead with increments, signalling its confidence that the storm will blow over soon. The new increment structure will be announced on July 1. That's not all. The company has also reinstated most of the over-700 casual workers who were laid off from its Jamshedpur factory.

Tata Motors isn't alone. Consumer durables major LG Electronics India has handed out an average increment of 14 per cent to its employees compared to 15 per cent last year. The game changes completely as far as critical talent is concerned. LG, for example, has implemented more sharply-differentiated pay for high performers in the belief that the way the organisation rewards and recognises people helps produce the results the organisation wants.

As a result, LG is giving out bonuses equivalent to 90-100 per cent of its key performers' (15 per cent of the employees) fixed annual salaries and is sending 350 of its employees to watch the T20 World Cup in London next month.

PepsiCo India has also decided to give up to 25 per cent more stock options depending on performance.

The most encouraging sign - something that suggests that the worst may truly be over - is that while most Indian companies have frozen their hiring plans for the short-term, a majority of them still rule out layoffs as a way of controlling costs.

A PricewaterhouseCoopers survey said while over three-fourth of the respondents have frozen or deferred hiring, most companies are shying away from employee layoffs as a way of controlling costs, with as much as 84 per cent of the respondents voting against it. The survey was exhaustive enough as it was carried out across 12 sectors and over 100 respondent companies.

And, as the Great Places to Work Institute found, tough times haven't stopped good companies from continuing with the tradition of great workplace practices - treating people well, sharing information and answering questions, and investing in the employees' professional development.
Shyamal Majumdar
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