Focus : Dark Clouds

DQI Bureau
New Update

The IT industry used to be the proof-point for proactive HR management. But

of late, because of the overall gloom in the economy, many IT majors are facing

a slowdown and this is likely to impact recruitment. While going by the trends

many IT companies have put a freeze on new recruitments and slowly downsizing,

citing employee performance issues. Even while the downsizing in the IT industry

is happening in pockets and we are yet to see large scale lay-offs, nevertheless

the HR heads are going into the cautious mode.


Reflecting on the current economic landscape and its impact on IT, R

Chandrasekaran, president and MD, Cognizant says, Across industries, we are

seeing clients go through a process of rapidly re-thinking business priorities

and, as a consequence, re-prioritizing their technology and related spending.

What we are seeing though is a re-allocation of spend to different areasin line

with the revised priorities of the clients business.

The Current Dynamics

With the industry already in a state of gloom, the latest Stayam Computer

fiasco has put the Indian IT outsourcing industry in the scanner for what has

been called as creative accounting practices. It is believed there are much

more Satyams out there that follow some degree of accounting manipulations.


Says a leading HR consultant, What the companies have to do is to adjust to

the new normal. They need to look at the individual performance deliverables and

make it more realistic so that employees are not unduly pressurized and at the

same time work can be distributed. I think the bench staff in the IT companies

would be worst affected if project pipelines gets delayed.

HR Redefined

Talent crunch is a reality in India and employee engagement and employee

retention has started figuring on CEOs KRA list. Business leaders are looking

at IT for help on this front. The role of HCMS is felt more and more because the

solution makes HR management a whole lot easier. For instance, using an HCMS

solution an employee can access his performance status as on date and try and

take an audit of what it takes to achieve the set milestones.

According to a Yankee Group study, the growth of talent management

technologies will nearly double by 2009 and will exceed $4 bn, a compound annual

growth rate (CAGR) of more than 26% in the next four years. It is also believed

that HR managers will be benefited by on-demand, software-as-a-service

subscription model as it helps access talent management solutions at a very low

cost. Yankee Group estimates that over 2,300 companies worldwide adopted some

form of talent management technology in the last few years. Of those companies,

approximately 65% deployed their talent management solution in an on-demand


Today cost cutting is an oft repeated word. But in the name of cost cutting

downsizing or scaling down the HR size would not serve the panacea, as any

layoff will have a chain effect on working employees who will feel insecure

working for that company. Some experts say that while layoff would be inevitable

in a Titanic kind of situation, companies can rationalize costs by various

measures. For instance, cutting down on scheduled salary hikes and driving home

that its a temporary measure would instill confidence among the employees. The

road ahead for talent management looks uncertain. Companies need to innovate on

their HR practices and incorporate a high degree of empathy that will create the

bonding environment in these tough times.

Shrikanth G