Sunday, June 08, 2014

Recent trends in critical HR management practices

Nobel Prize-winning economist Gary S. Becker, who coined the term “human capital,” says that “the basic resource in any company is the people. The most successful companies will be those that manage human capital in the most effective and efficient manner.”

The present day economy has been titled as “Knowledge economy”.  In such an economy, it is people who make all the difference.  In political economy capital or market was important.  Talent occupies centre stage in the Indian workplace.  In view of this, managing and retaining manpower is becoming crucial to an organization’s success.  To achieve this, companies across sectors are focusing on some of the more critical HR practices. Some of the trends that have been noticed are:

Leadership development
Creating a pipeline of leadership talent is key to a business’ future growth.  It is imperative for the top level of an organization to make leadership talent management a priority, and put its money into long-term plans, as opposed to short-term ones. If companies are worried about their talent pipeline, they have to develop their people.

Work-life balance
No company or employee has found the Holy Grail of balancing work and life, but that is a work in progress. However, multinationals, information technology (IT) and IT enabled services (ITeS) companies have been able to promote the balance between career, family and leisure-time better. Other sectors have also been increasingly promoting a work-life balance.
Interestingly, most companies in India use benefits such as flexible timings, telecommuting, crèche facilities and concierge services as an attraction and retention strategy. Experts say companies should see the work-life balance as a business proposition since progressive companies carry business forward with employees and families.

Inclusion and diversity
With higher numbers of Gen Yers joining the workforce in India at a time when companies across the world have an ageing workforce on their rolls, conflicts are to be expected.  Therefore, companies are investing both time and resources in ensuring that all age groups are comfortable working together.
Organisations in India have also been focusing on making workplaces more representative. For companies such as ICICI Bank Ltd, Hindustan Unilever Ltd, Vedanta Resources, PepsiCo India, Shell Companies in India and Bharti Airtel Ltd, gender diversity has become a critical area of focus.

Health and wellness
The work culture at globalized workplaces involves long working hours, frequent travel, multitasking and tight deadlines - and all this often leaves employees mentally and physically stressed. Companies have begun to realize that healthy employees contribute to higher efficiency and productivity. Apart from medical benefits, companies are also offering yoga classes and health camps and have doctors on campus.HCL Technologies Ltd, for instance, like many other IT companies, has 24/7 medical facilities in all its centres. DuPont has an Intranet-based tool, which assesses an employee’s health through a questionnaire and makes recommendations based on the scores.

Right skilling
Right skilling, or matching jobs with a particular level of training rather than hiring overskilled workers, is gaining currency. Companies use this strategy to tide over a manpower supply crunch and to broaden their talent baseApart from IT and ITeS firms, organizations in the banking and financial services sector, too, have been increasingly hiring graduates and training them. The upside? Lower attrition rates and wage costs. Pai explains that when you have an over-qualified employee, it is very difficult to meet her aspiration levels and, therefore, the chances of the employee moving on to something more challenging are higher.

Managing ‘solid citizens
Organizations which neglect their solid citizens are doing this at their own peril, say experts. Unlike star performers who are potential leaders, and therefore more likely to move out of an organization faster, this group provides stability and bench strength to an organization. Experts say companies need to take a fresh look at solid citizens and invest time and resources in managing and developing this group.

Instant rewards
Recognizing and rewarding performers is one of the most effective tools to attract and retain the right talent. Companies in India are looking at rewards systems more seriously, and are adopting total rewards practices that include compensation in both cash and kind.
Apart from lifestyle perquisites such as a house, a car or a club membership, profit-linked incentives, deferred gratuity, and wealth-building programmes in the form of stock options and soft loans, companies are also including work-life balance programmes; competency pay packages where niche skills are compensated; and career opportunities, such as overseas assignments, new projects, etc., to reward staff. These rewards can be tailored to suit the top performers’ aspirations to achieve maximum effect.

Measuring human capital:
Evaluation of performance plays a key role, not just in rewarding an individual employee, but also in setting performance benchmarks. And hence, the need for fair and transparent performance management system. A strong performance analysis helps make human resources both efficient and effective.

Managing aspirations
As aspirations of organizations grow, so do those of employees. And, with the changing lifestyles and profiles of the workforce, personal and professional aspirations of employees are not just varied, but are increasingly on the rise. Experts say people as well as organizations have aspirations, and when the two get aligned, achieving business goals becomes easier.  Companies should be clear about goals of individuals as well as of the organization, and the role each needs to play. The firm should also communicate the goals, and have robust and reliable processes to execute them.

360 degrees feedback
Finally, recognizing the need to make performance appraisal systems more effective, an increasing number of companies are using the 360 degrees or multi-rate feedback process. Unlike the traditional appraisal system, which gives one-dimensional feedback, this one allows an employee to give feedback to her reporting manager, peers, direct reports and others. While most companies started using this system as a means for performance appraisal, most of them now use the 360 degrees feedback system to identify the learning and development needs of employees.
Since companies are finally valuing people and their softer skills, does that make it easier to hire good people? The answer is no.  In today’s business climate, attracting and retaining the best employees is very difficult. The reason is a combination of the change in business practices and the shift in employee attitudes. 
The business landscape has changed dramatically in the past decade as a result of many factors from the feverish hiring boom of the 90s to the economic slowdown in the later part of the last decade.  During this same period of time, employee attitudes have changed dramatically.  Exposure to widespread layoffs and corporate scandals has led to an erosion of company loyalty and reevaluation of career and life priorities by many employees. 
So now we have companies looking to acquire the best talent and a growing workforce of talented individuals who are no longer attracted by compensation alone, but who require and value intangibles as well.
The bottom line is this. In order to achieve professional growth and success in the next period of increased talent acquisition, technology professionals are going to have to step out of their comfort zone and develop the holistic, relationship-focused business skills that companies are requiring.

And by the same token, companies are going to have to take a more strategic and supportive approach to recruiting and retention if they want to find and keep the new breed of evolving talent.