Companies are taking care of their star performers despite the slowdown
Karthik Raghavan, 30, was hired by a leading consulting company in 2016 in the final year of his MBA programme. He also had an offer from a large FMCG company but the consulting company was offering more money. Raghavan joined the consumer vertical and was soon among his team's top performers. Two years later, the economy was in the grip of a slowdown, with many companies asking their not-so-good performers to quit. In such a scenario, a meeting request from head of human resources (HR) gave him jitters. However, it turned out to be the most valuable meeting of his career. "The HR head said I was important for the organisation and since I had mentioned in my interview that I wanted to get a degree from a top American university, they were happy to fund me for it," he says. Now, he is back after completing a one-year master's programme at Yale, and the company has put his career on a fast track. "Due to the economic slowdown, increments haven't been attractive. However, they have taken care of my long-term career growth."
Raghavan is a typical case. In the latest Business Today-PeopleStrong Best Companies To Work For study, employees have listed career growth, compensation, challenges, work-life balance, flexibility and learning opportunities as reasons they love their organisations. This time, though, there has been a change in narrative - career growth doesn't necessarily mean an attractive compensation package. Companies are telling employees that higher designations and salaries are no longer indicators of growth. The aim is to make high performing employees future ready. "Companies are telling employees that they are handling businesses that are not growing, so in these tough times, they need skills to handle these challenges. They are talking about preparing them for the future," says Aditya Mishra, CEO, CIEL, a HR services company. Just as Raghavan's organisation sponsored his higher studies, offering executive MBA courses or even partnering with institutions that offer skill-based training in areas such as artificial intelligence and machine learning has become the norm. Career growth includes offering employees learning opportunities outside their comfort zone.
When Aarti Jain was offered a job as a supply chain trainee at Hindustan Unilever (HUL) in 2015 after her MBA, she had never imagined that she would take up a factory role. Jain, currently Manufacturing Manager at HUL's Kandla factory, says a factory role has unique challenges. But its been empowering too. It has enabled her to make a difference to the community around her. "When you are a woman in a leadership position (in remote locations, literacy levels are low and society is predominantly patriarchal), it requires immense patience and humility to not just find acceptance but also command respect," she says.
Laxmi Hatila, also from HUL, echoes Jain's thoughts. She was offered the role of Field Sales Officer at HUL's Project Ahilya (an initiative to include women in sales roles). Hatila says the learning on the field has been phenomenal. "I don't think anyone can prepare us for what we get exposed to when we are on the field. Each day, each customer, each market is different."
HUL is among the top 10 employers in the Business Today-PeopleStrong Best Companies To Work For list. The company's Executive Director, Human Resources, Anuradha Razdan, says the strategy of building the company's culture around the value of 'People with Purpose Thrive' has made a difference. HUL, she says, has enabled its 13,000 employees to discover what they want to do. "We are creating meaningful experiences for them and building a growth mindset so that they embrace challenges as opportunities."
Companies across the country, whether it is top retailers or firms in core sectors, are figuring out ways to reduce costs and improve profitability. Many have shut stores, pivoted business models and sacked employees. But they are also taking care of their star employees. Bangalore-headquartered fashion retailer Lifestyle International is offering employees growth within the organisation despite the slowdown. Instead of hiring fresh talent each time a new store is opened, it gives a chance to existing employees, especially front-end staff, to take up bigger roles. "We opened close to 50 Max stores and eight Lifestyle stores last year and ensured that at least 30 per cent employees at these stores were our own existing employees," says B. Venkatramana, Group President (HR), Landmark Group. The company has introduced an app-based learning management programme that enables employees to acquire additional skills. As a result, in the last one year, Lifestyle International has substantially enhanced its employee engagement. The company's pulse survey shows that the engagement level of employees in the last one year has been 80 per cent vis-a-vis 60 per cent in the past few years.
Senior HR professional and former CHRO of TATA SIA Airlines (Vistara), Varadarajan S., says the answer to talent management in a slowdown lies in an organisational design that is flexible and agile. "A fungible workforce allows the company to redeploy people across roles as per business requirements." Companies are adopting different strategies to redeploy their workforce. Varadarajan shares the instance of global BPO services firm Quatrro which, during the slowdown in 2008, chose to multi-skill employees. For instance, a finance person was trained in risk services. This allowed it to create an internal pipeline where each employee had two-three skills. It didn't hire anyone from outside unless it was absolutely necessary. During his tenure at Tata Teleservices, when the business environment was weak, they merged two job roles into one to control cost and reduce the need for layoffs.
Neeraj Sharma, Director (Human Resources), FourKites, says while the company has been conservative about hiring new talent in the last one year, it has enhanced its focus on management best practices. "Earlier, we were on a treadmill, took empathy for granted. Today, we are focusing on training and development. Upskilling of talent has been the way forward for us at the lower level. We are offering online learning programmes. We are offering training in artificial intelligence and management."
During economic crises, companies reduce payouts to employees. But smart companies use this as an opportunity to reward the deserving ones generously to retain high ROI employees. Sharma of FourKites says his company is offering stock options to its high performing employees. Many even use slowdowns to hire good talent laid off by others, says K. Sudharshan, Managing Partner, EMA-Partners. "Well-run companies are continuing to attract talent despite the slowdown."
A salary survey by professional services firm Aon India has found that corporate India will give salary increments of 9.1 per cent in 2020, the lowest in a decade, but continue to reward their star performers. The gap in pay hikes between top performers and average performers is becoming sharper every year. The top 10 percentile performers will get a 12 per cent increase while the relatively low performers will get 7 per cent.
While the overall payouts have reduced, organisations are identifying high performers and offering healthy retention programmes, says Rajiv Burman, Founder of HR consulting firm GrowthSource. These are essentially big bonuses that the stars get at the end of a year or 18 months. Around 7,000 respondents of Business Today's Best Companies survey felt that the most attractive jobs come with hefty compensation and benefits. That is why companies are increasing the share of performance pay in the compensation package. This way employee's earnings get linked to the company's performance and business costs balanced with employee expectations. DTDC's HR Head, Shiv Rawat, says instead of giving a 10 per cent fixed increment, they may offer a 6 per cent fixed increment and 8 per cent variable pay. "Such strategies solve two problems. One is motivation level of employees, as from 10 per cent, theyre getting 14 per cent. Secondly, they are ready to take up challenges," he says.
To ensure only the highly productive employees get benefits, companies are incorporating strategies to differentiate talent. DTDC follows a practice called weekly action plan (WAP) and review weekly action plan (RAP). People share their WAP with reporting heads; it is reviewed on a weekly basis. "These practices keep our eyes open to see who is performing and who is not," says Rawat. WAP and RAP are now applicable up to the designation of regional functional head, the fourth layer from the top. Similarly, Fidelity National Information Services (FIS Global) has an internal tool for its India office called Return on Employee Cost (RoEC) that alerts managers about tenured employees with average ratings who continue to do the same work year after year. "Tenure doesn't count for anything, talent does. RoEC enables us to look at their performance critically and coach them to move up," says Mamta Wasan, Senior Vice President Human Resources at FIS Global.
One of the toughest decisions firms have to take during a downturn is to lay off employees. If not done well, it can have a long-lasting impact on the company's brand and employee engagement levels. Several companies are now ensuring that workforce restructuring is fair and employees get a soft landing.
When Vodafone merged with Idea in 2018, there were quite a few exits post the merger due to duplication of roles. The organisation, however, ensured that it took care of its high-performing employees. So, if there was role duplication in a circle, it offered the high performing employee a role with a promotion in another circle. If the employee didn't want to move, it tried to get her another role within the same circle. Only if that role was not acceptable to the employee was she offered a severance package. "The firm went out of its way to accommodate them," a Vodafone employee told Business Today on condition of anonymity. They also offered handsome severance pay to high performers who opted to move out.
Rational competency mapping is another area that is becoming important. "There is a craze among leaders to hire super achievers for every role," says Wasan of FIS Global. "Not every role requires a go-getter," she says.
Pink slips have become a way of life in today's volatile economy. While many companies are trying to do their best to take care of their high performers, it is important that employees also make themselves relevant. "Am I adding value to the organisation is the question that employees need to ask themselves, especially during a slowdown?" says Sudarshan of EMA-Partners.
Inputs from Joe C. Mathew