As slowdown is getting deeper, corporate’s HR professionals are under severe pressures for working out innovative ways and means to submission of their management to cut unnecessary organizational frills and reduce fringe benefits such as bonus, LTC and other allowances, besides curtailment  in administrative costs.

The above findings are arrived at the conclusion of internal seminar conducted under aegis of ASSOCHAM here on Challenges to HR Professionals Post Slowdown in which over 90% HR professionals said, “there is virtual ban on fresh recruitments in private sector as attrition rate has almost subsided in all sectors of economy, barring a few in knowledge, banking/finance”.

Over 150 HR professionals of companies having affiliation with the ASSOCHAM participated in the internal seminar in which 135 said that a new paradigm shift has taken place among corporates as per which layoffs are being avoided, since attrition is virtually halted. “Sensitivities in majority of corporate management are arising for not dismissing employees as corporate restructuring is taking place with focus attach to human face”, said ASSOCHAM President, Sajjan Jindal while releasing the Chamber’s findings.

In order to compensate against lay offs, the management in majority of the cases is being advised by HR professionals to curtail to a legitimate extent of 10-15% wage cuts in total emoluments at middle and senior middle level and that of 25-35% at senior levels including promoters and proprietors.

Efforts are being put in the direction that only 5-7% wage cuts are being recommended for lower levels of employees as the focus is more towards cutting administrative costs such as optimum use of stationery, conveyance, electricity consumption is being brought down and generator facilities are being continued only for peak hours summer, said HR professionals.

Over 100 HR professionals above ranks of general managers came out with a finding that unions in corporate world have stopped wage revision demand and interestingly cooperate with the management by sumoto offering to be part with decisions that aim at curtailment in their annual allowances with a request that layoff should be avoided as far as possible.

Nearly 20% of HR professionals that participate in the internal seminar said that there are corporate houses even at times of slowdown who continue to follow HR policies of the past and hardly exert any unwarranted pressures on their HR executives for strategies that suggests wage cuts and even slight relaxation in corporates perks and perquisites.

Banking, finance and business outsourcing sector still has space to accommodate fresh recruits because these sectors are now open for revival and demand is picking in them at a steady pace, said HR professionals.

In other manufacturing sectors which also include steel and cement, recruitments are being avoided, although recovery has started picking in them. The reason perhaps is that their management is avoiding recruitment in anticipation that if demand slackens in future, this placement policies be avoided, said some of HR professionals.

According to ASSOCHAM estimates, since slowdown will remain their for another few months, the corporates will unveil their revival package after May 2010 as by then, the ASSOCHAM is of the view that the economy will start bouncing back on its growth path, said Mr. Jindal.

The Chamber expects the economic activity to pick momentum after the elections as the stalled projects would resume and fresh budgetary allocations would further boost the economy. The combined impact of these factors would be felt after the end of the fiscal 2009-10.

The investment scenario in the Indian economy has also taken the hit as both domestic as well as foreign investment dipped due to credit crunch and declining demand. The 70% HR professionals expect the investments to recoup by the end of the year 2009 as domestic consumption potential would pull the investors to the economy.

Source: ASSOCHAM

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