Focus : Dark Clouds

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
model.

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

shrikanthg@cybermedia.co.in