Affected HR Processes by the

Recession
The recession affects different HRM Processes. Some HR Processes
can be affected by the recession very hardly and other processes can be
completely immune from the recession impact. The HRM Function has
to react very quickly and the response has to include the whole HRM
team as all employees have to help the most affected employees to
keep the level of the satisfaction.

The organization needs to save the costs and it needs to identify and
potential additional source for the cost saving and starting a new growth
era. The HRM Function has to prepare a new HRM Vision and a new HR
Strategy for the coming period as the cost cutting is not the only way to
build a stronger organization fighting with the recession.

The most affected HR Processes are the following:

1. Recruitment - The first HR Process with the change in the

recession. The job vacancies are cancelled and the HRM
Function should come with a new recruitment strategy. The
organization can hire a new set of skills and competencies to
strengthen the position of the organization on the market
2. Training – The training are cancelled as it is a quick cost
cut. The training can be later focused on more specialized
training session and more internal training courses can be
introduced.
3. Compensation and Benefits – The department can be
asked to bring a new compensation scheme, which will save
the costs and motivate employees to be more proactive.
4. HR Front Office – The HR Front Office have to be present
at clients all the time as they will need a strong guidance and
facilitation during the recession.
The HR Processes are heavily affected by the recession, but the
HRM Function has to take this as the opportunity to change and to bring
new ideas on the scene. The recession is the best time to design a
completely new approach of the organization to its human capital.
g.abhijit
Re: HR PRACTICES FOLLOWED BY IT COMPANIES w.r.t RECESSION
HR PRACTICES FOLLOWED BY IT COMPANIES w.r.t RECESSION:

Hi I am Abhijit Ghosh, a Business Development Manager with an IT company. My

observations related to HR practices, followed by IT companies during recession are:

1. The employee's increment has been postponed

2. The salary (as per the appointment letter) of the employees has been reduced (Wipro)

3. Job responsibility has been increased so that everyone stays late and works hard

4. Some, good companies (specially Small and medium scale IT companies, not large
ones) are still hiring (because it is a good time to shop - as the cost of the employee is
less, you know)

5. Personal use of Internet, telephone and any other items including car has been totally
stopped.

6. Reimbursement is given after havoc verification 

7. Some of the leaves (even national leaves) have been made as working days

8. You, as an employee in any IT company, will find it difficult to get a leave approval

I think this recession will not be over very soon. So we have to get habituated with this
situation and work hard, innovate, cut cost (but not on key employees) and also enjoy the
other part of the professional world.

***YOUR COMPETITORS ARE ALWAYS READY TO SHOP FOR YOUR KEY PERFORMERS.
TAKE CARE OF THEM DURING RECESSION.....!! 

Ref: Infosys, Wipro, TCS, HCL, HP, Microsoft, Sun (corporate)...... and eDominer,
MORPHOUS, NetEdge, UG Soft (SMBs)

Managing employee psyche tough in a slowdown’

The slowdown has thrown up a whole set of new challenges for HR, says Nandita Gurjar, Senior V-P and
Global HR Head, Infosys Technologies..
  
Nandita Gurjar: This is the best time for companies to build a brand internally with employees.

Anjali Prayag

The priorities of a company, especially of HR, change drastically during a slowdown. From bringing in
cost-cutting measures to dealing with forced attrition to managing morale, HR assumes a different role
each time.

“Believe me, it’s tougher during a recession, because HR for the first time is facing the problem of
managing the psyche of the trapped employee,” says Nandita Gurjar, Senior Vice-President and Global
HR Head, Infosys Technologies.

In an interaction with The New Manager, Gurjar says this is the best time for companies to build a brand
internally with employees. She also talks of how India’s leading IT company is adopting recession-based
HR practices such as better communication, a Performance Improvement Plan, variable pay and cost
efficiency in managing human capital.

How do priorities for an employee-friendly organisation change during a downturn when compared to an
upturn?

Whether in good times or downturns, it’s never ‘cool’ for HR. There is always enough work, though there
are some shifting priorities. As an organisation, employees are our utmost concern and at Infosys, during
a downturn or an upturn, the larger realities remain the same; i.e. keeping the employee engaged. The
focus is now shifting from recruitment to allocation of benched employees and ensuring that they are not
on the bench for too long.

There has been a muting of recruitment at the company, so we told the recruitment division that they must
become more responsible for ensuring that benched employees are allocated properly. Also, we asked
them to keep the interface with colleges going because they would have to go back to campuses when
the upturn happens. The department did a very good job and came out with a strategy. Each department
came up with what HR should be doing for the next two years.

What are the new HR strategies aimed at coming to terms with the situation?

Instead of reacting in a knee jerk fashion to what business wants, we are of the opinion that the principle
of HR cannot change. We are not a hiring and firing organisation. The management has come up with the
philosophy of keeping the flock together for the next two years. We should also ensure that people who
stay back don’t feel like trapped employees.

Who are ‘trapped’ employees?

For years now, IT has only seen boom times and employees have not seen a downturn. They always had
two-three jobs on hand and told HR ‘if you don’t give us this or that, we are leaving.’ But now the scenario
has changed and they feel ‘trapped’ in their organisations. Even HR has not been trained to handle the
psyche of the ‘trapped’ employee. We only knew how to handle attrition and picked up skills for retention.
It’s very easy to start viewing employees as ‘scared, cynical and frustrated’ and treat them like ‘you no
longer add value here, but you have nowhere to go.’ If the organisation takes this view, it could pass it to
on to employees through their body language. What kind of impact does it have on the performance of
employees?

It’s too early to say whether performances will be affected. There could be a negative psychosis that is
spreading. We also realise that it’s the best employees that make the shift and a turnaround. If you
damage their psyche, then they stop adding value and innovation stops. Pumping in the right philosophy
is very critical. We have advised all our managers that there should be a pouring in of communication.

Can you talk about a few cost-cutting measures that you have introduced?

We need to have a view that business is going to be bad and will get tougher. When we decided to
adhere to our plan for 20,000 campus offers, there was negative press, but we believed that we had to
stick to the offers already made. And all of us inside believe we have to pay a price for this, whether it’s
foregoing promotions, increments, variable pay, etc.

People on the bench are asking us why the company is taking in more candidates from campuses when
there is already a bench waiting to be deployed. We have assured them that those who have been
benched for longer will get priority.

I think it’s very easy to cut down on niceties like transport frills, food, coffee, gatherings and reward and
recognition, which will not save much for the company. We should also be concerned about the impact on
employee morale .

At Infosys, we may decide on budget cuts and not do away with parties and events altogether. We may
have larger gatherings, but we’ll not let go of events and reward and recognition schemes. You can’t
make everybody feel like losers.

We are cautious about any policies that come out now and are getting more sensitive about how we
communicate. At the same time, we are making sure the communication is honest and transparent. I think
the most important competency of an HR professional is personal credibility. Also I think this is the best
time for employers to build a brand for the company. In good times, you focus externally, during a
downturn, you must focus internally.

Are you planning to make your performance appraisal system more stringent? How are you going to
differentiate average performers from outstanding ones?

We have always had a strong performance management framework. As per the normalisation curve, we
put the bottom five per cent in the performance improvement plan. In the PIP, there has always been a
certain percentage (almost 50 per cent) of people that came back into the system after going through the
improvement plan for three months. This year, we’ll have to see how it goes. While the process remains
identical, what is different is that there would be no other job within the organisation that people can be
deployed on. Of course, we have no tolerance for low performers and I’d rather protect people on the
bench.

How is Infosys working towards bringing in more cost efficiency in the human capital area?

Our first call was to look at restructuring the senior management where people costs are much higher. At
Infosys, we don’t touch the entry level and junior managers because here costs are lower. We are
comfortable letting go of non-performers among the seniors. Then there was a cut in the variable pay of
senior management. This is also because the senior management which can make the upturn happen is
getting more responsible.

Is there a complete freeze on hiring at Infosys?

Hiring is happening but only in places where we don’t have skills. There are several internal job postings
and movement inside the company has increased by almost 50 per cent. We’ve told employees, for the
next two years, don’t protest and just get billed first.