In a season of layoffs and pay cuts, select companies are not just hiring, but also compensating better, here's why
This year has been particularly good for 25-year-old Vignesh Sridharan. The management graduate from XLRI has joined as a trainee in the sales and marketing division of Reckitt Benckiser, a company he interned with last summer and got a job in October. The company held on to the offer even during the pandemic, and Sridharan was onboarded in June. He is currently operating out of Kolkata.
In a season of layoffs and pay cuts, Sridharan is mindful of the happy confluence of three factors - luck, choice of sector and the value of sticking to commitments that recruiters make. All three played out in his case. Among his batch of 180, the majority had no issue of any sort, either in getting a job offer or in onboarding. Sridharans choice of the FMCG sector has helped him too. Irrespective of any crisis, essential items will be in demand.
"Apart from three offers by one company , all the others in the 394 accepted offers stuck to their commitments and all students are getting onboarded," says Amit Karna, Associate Professor of Strategy and chairperson of placements at IIM, Ahmedabad
Some 2,000 km away, in her hometown in Surat, Kiran Sharda, 22, a student of IIM Udaipur, remotely concluded her first summer internship with a leading consumer and specialities chemicals company. "They call us the pioneer batch of this virtual world and it felt good," she says. Sharda is now waiting for her second-year online classes to begin. Her senior and a gold medallist from the Class of 2015, Angad Singh Abrol, after being part of two startup founding teams since 2015, chose this year "to take a pause from an entrepreneurial career and get deeper insights into product management." He recently joined as senior product manager in FarEye, a SaaS-based solutions provider for logistics players. "If you are skilled enough then every time is a good time to look for a job," says Abrol. The same applies for companies as well. If a company is good and is in a promising space, access to funds is not a challenge even in the middle of a pandemic, he adds. FarEye, he says, "raised $25 million in April 2020 and has expanded its manpower with remote hiring by over 12 per cent amidst the COVID-19 outbreak." He sees a clear trend in more hiring by tech-based solution providing startups.
So, why do some companies see sense in ramping up on quality talent instead of resorting to layoffs? How are managements, in times of cost-cutting, approaching hiring? What are they conveying to graduates, business partners and most importantly their own people? In some cases, it is driven by an expectation of a business rebound and in others, a confidence in respective brands and a simple demand-supply equation where good talent is available. There are companies from FMCG, finance, tech-based startups, healthcare and e-commerce sectors who are rejigging their businesses models to adapt to the new reality.
Much More Broad-based
Clearly, all is not lost. Those with access to deep pockets and in businesses with growth prospects are ready to hire. Amit Karna, Associate Professor of Strategy and the chairperson of placements at the Indian Institute of Management (IIM), Ahmedabad, told Business Today: Generally, most of the companies adhered to the commitments made this year. "Apart from three offers by one company, all the others in the 394 accepted offers stuck to their commitments and all students are getting onboarded. Only, this time we are expecting delays by a couple of months and perhaps by October, all of them will join," he says. Normally, around 80 per cent of students join by around July end but looks like for most leading institutions it would be around 60 per cent and by the October the remaining would join.
Nestle India Chairman and Managing Director Suresh Narayanan agrees. "Broadly, the spend levels on people this year will be comparable with any other year," he says, adding, "the good part this year is that everybody has received their salaries, increments and bonuses. Whatever benefits they were to get have been given. So there has been no change between last year and this year in terms of commitment to people or what they were supposed to be getting."
So, is this year no different from any other? "All the offers we made to summer interns were fully honoured. They spent eight weeks. We usually take in 20-25 students every year, and it continued this year as well. We onboarded them virtually and some of them will be selected by the company," says Narayanan. "In all, 24 management trainees joined in early June. Usually, in a year we take in anywhere between 18 and 25 students. This is something that we had also committed in all the offers at IIMs and other institutions. Those were all completely honoured and we did not renege on a single one. All those who have been given job offers are in the process of joining, virtually at the moment."
One addition to the hiring scenario is new roles getting created to cater to the changing business needs. Nitin Chugh, Managing Director and Chief Executive Officer of Bengaluru-headquartered Ujjivan Small Finance Bank, who has been hiring at senior levels, too, in the past few months, says roles like head of digital banking are proving out to be good decisions in today's environment. "Another senior role that we have now created is head of TASC (Trusts, Associations, Societies and Clubs). Smaller entities in this are an underserved segment and we could reach out to them now. Other than that, there were at least half a dozen senior-level positions that were replacements, which we also filled in the past couple of months like the head of liabilities, taxation, operational risk and CTO, among others," he adds.
"There were management trainees, too, who normally join in June, but this time are joining us in July in multiple locations. We have not laid off. We have been hiring for the past couple of years and reached a headcount of around 17,500 across the country. We have been at that level for the past six months and as and when new positions or replacements are needed, they are done. Like, in the past few months, we have added people in front office and senior level roles," he says.
Joining The League
Even biggies in challenging business segments are hiring. Consider construction and engineering major Larsen & Toubro (L&T). "Our construction division as a whole is hiring young engineers to commensurate with business needs. We are not reneging on any offers made in campuses in spite of the difficult economic environment and challenges that the pandemic has posed. We have decided not to renege on offers made and go by the principle in hiring that 'a promise-is-a-promise'," says Yogi Sriram, adviser to CEO and MD, Group HR at L&T.
"We are recruiting healthy numbers relative to others in spite of a challenging year ahead. We have a healthy order book that exceeds Rs 3 lakh crore and we will need these young bright, energetic engineerss for the present and the future. GETs (Graduate Engineering Trainees), PGETs (Post Graduate Engineering Trainees) and Build India scholars are the main source for our talent bank," he adds. In just GETs and PGETs, there have been 1,000 and 240 additions, respectively.
More Access To Talent
While companies seem conscious of the current challenges, they also have reasons for onboarding young professionals in times of layoffs. "We understand that in the current uncertain and volatile employment environment, there is an availability of great talent across functions... Currently, we have higher access to talent than we did previously due to the disruption caused in recent months," says Deepti Varma, director HR, Amazon India. "We have recently opened 20,000 seasonal employment opportunities in customer service apart from over 2,000 open positions that we are hiring for, across locations and levels. Some of the key roles we are hiring for include software development, operations, IT and support engineering," Varma adds. "We have honoured all hiring commitments, including internship offers. In March, we started onboarding hires virtually and extended that to launch a virtual student internship programme for corporate teams this summer."
Buzz And Business Prospects
One aspect across most hirings today is the perception of healthy business prospects, says Amazon's Varma. "E-commerce is one of the fastest-growing sectors in India, and this presents a unique opportunity for firms to deliver a superior customer experience."
Agrees Nestle's Narayanan. "As a consumer goods company, the blessing that we have is that business is still coming. As a company, we have a fairly clear idea about what costs we can cut such as establishment costs or conference costs or travelling costs, which in any case have got rationalised." Instead, the company is looking to invest more on people. It has just launched a 1,000 'Nesternship' programme to reach out to young professionals. "In the last four years, we offered around 1,000 internships and now under this initiative, we intend to do this in just the next four months. Of course, we will not be recruiting the 1,000, though some might become employees. The idea is to build the capability in them to see employment," says Narayanan.
And what about added costs. More importantly, why now? "There will be the cost element to it but that we are willing to absorb and we are confident of being able to digest it," he adds. What is likely to change is the composition of compensation in packages, which would be tuned according to the changing business requirements and will factor in elements like work from home.
Narayanan sums it up. "In a people-centric organisation, I will be betraying the spirit, if I say I am not going to spend on people and cut their salaries."
That, perhaps, is a message companies bucking the trend, are happy sending out.