Keeping Employees Motivated and Engaged in a slowdown

Slowdown has taken companies by surprise We are down from 4 years of 9% growth to 5% growth From 20% attrition to 6% attrition Financial system has gone into a complete downward spin

We are down from 4 years of 9% growth to 5% growth

From 20% attrition to 6% attrition

Financial system has gone into a complete downward spin

Slowdown has taken companies by surprise Lack of availability of capital New projects which companies ventured into may not get funded Many startups face closure Marginal players in most businesses badly affected Companies who kept bench or made advance offers stuck

Lack of availability of capital

New projects which companies ventured into may not get funded

Many startups face closure

Marginal players in most businesses badly affected

Companies who kept bench or made advance offers stuck

Who is doing well and who is not ? Worst Affected Sectors IT Real Estate Financial Services Construction Engineering Media BPO Better off Sectors FMCG Healthcare Education Telecom Insurance

Worst Affected Sectors

IT

Real Estate

Financial Services

Construction

Engineering

Media

BPO

Better off Sectors

FMCG

Healthcare

Education

Telecom

Insurance

Manpower Excesses in the boom years Relaxed Quality standards in hiring High tolerance towards Non Performers Massive salary increases Many people are currently overpaid Over promotions Organisation charts have put on many layers Poor Leadership in many areas Lack of availability of talent Management is partly to blame

Relaxed Quality standards in hiring

High tolerance towards Non Performers

Massive salary increases

Many people are currently overpaid

Over promotions

Organisation charts have put on many layers

Poor Leadership in many areas

Lack of availability of talent

What does the slowdown mean for employees? Growth and profits under pressure Targets not being met Stock Prices fall ESOP less attractive Company affordability reduced Do more with less Difference in ability between performers and non performer More stark than ever Employee morale declines Many employees have less work Even good people question own competence

Growth and profits under pressure

Targets not being met

Stock Prices fall

ESOP less attractive

Company affordability reduced

Do more with less

Difference in ability between performers and non performer

More stark than ever

Employee morale declines

Many employees have less work

Even good people question own competence

What does a slowdown mean for employees ? Pressure on companies to re-look at salaries Especially the ones who are overpaid Companies may relook its deployment of manpower To ensure that good people are in the right jobs Employees under pressure to adapt to an environment that they have never seen Especially those who are good performers

Pressure on companies to re-look at salaries

Especially the ones who are overpaid

Companies may relook its deployment of manpower

To ensure that good people are in the right jobs

Employees under pressure to adapt to an environment that they have never seen

Especially those who are good performers

HR dilemmas companies face…… How do we retain our good people ? What do we do with our non performers – do we keep them or do we let them go ? What do we do with people who are good but may not be required now, for at least a year or forever? What do we do with people who are good but overpaid ? What do we do with people who are good but in the wrong role in the company

How do we retain our good people ?

What do we do with our non performers – do we keep them or do we let them go ?

What do we do with people who are good but may not be required now, for at least a year or forever?

What do we do with people who are good but overpaid ?

What do we do with people who are good but in the wrong role in the company

HR dilemmas ….? Do we differentiate between businesses doing well and businesses which are not ? What about organizational culture in times like this ? What should be the role of senior management ? Do we flatten our structure – improve the tooth to tail ratio ? What do we do with ESOPs which are underwater?

Do we differentiate between businesses doing well and businesses which are not ?

What about organizational culture in times like this ?

What should be the role of senior management ?

Do we flatten our structure – improve the tooth to tail ratio ?

What do we do with ESOPs which are underwater?

What works for one need not work for the other………. Is it a fight for survival? OR Are you just carrying some extra staff but are still reasonably profitable ? Fight For Survival You need surgery If you are still ok Do the right things slowly Many of your competitors will self destruct

Is it a fight for survival?

OR

Are you just carrying some extra staff but are still reasonably profitable ?

Fight For Survival

You need surgery

If you are still ok

Do the right things slowly

Many of your competitors will self destruct

Strategies for Managing People in a Slowdown Enhancing Productivity Cutting Cost Retaining Good People Letting the non Performers go

Enhancing Productivity

Cutting Cost

Retaining Good People

Letting the non Performers go

Enhancing Productivity Identify key focus areas Get stricter (specific & focused) on performance Discriminate between performers and average staff by way of salary increases Hire good leadership Restructure to improve tooth to tail ratio Transfer good people from non performing businesses into good businesses wherever possible Don’t cut down on small expenses – like tea, coffee, staff welfare, AC

Identify key focus areas

Get stricter (specific & focused) on performance

Discriminate between performers and average staff by way of salary increases

Hire good leadership

Restructure to improve tooth to tail ratio

Transfer good people from non performing businesses into good businesses wherever possible

Don’t cut down on small expenses – like tea, coffee, staff welfare, AC

Cutting Costs Higher proportion of variable pay Gives people an opportunity to earn more if the economy improves Senior Management should lead by example Optimize expenses Shut down offices Minimise travel and out of town stay – use audio/video conferencing Take a call on non strategic & non performing businesses Downsize them if needed to to protect the main business

Higher proportion of variable pay

Gives people an opportunity to earn more if the economy improves

Senior Management should lead by example

Optimize expenses

Shut down offices

Minimise travel and out of town stay – use audio/video conferencing

Take a call on non strategic & non performing businesses

Downsize them if needed to to protect the main business

Letting Non Performers go Resizing A tough decision – but the need of the time Non Performers pull down the performance of the company and hurt everyone Ensure that you identify them properly and there is consensus Do it as a part of a process – Put them on a PIP – give them a chance to improve Be humane and transparent

Resizing

A tough decision – but the need of the time

Non Performers pull down the performance of the company and hurt everyone

Ensure that you identify them properly and there is consensus

Do it as a part of a process – Put them on a PIP – give them a chance to improve

Be humane and transparent

Letting Non Performers Go Traumatic for both the people who lose their jobs and those who ask them to go Could lead to other good people also leaving the company (its not the same anymore) Do it only as a last resort

Traumatic for both the people who lose their jobs and those who ask them to go

Could lead to other good people also leaving the company (its not the same anymore)

Do it only as a last resort

Letting Non Performers Go Explore options like leave without pay(sabbaticals), skill augmentation programs, reduced pay, severance packages Tell them that you will take them back when things improve Senior Management involvement essential – communicate well, be transparent, be compassionate, do it as the last resort Don’t make this a regular feature – don’t cut people every week

Explore options like leave without pay(sabbaticals), skill augmentation programs, reduced pay, severance packages

Tell them that you will take them back when things improve

Senior Management involvement essential – communicate well, be transparent, be compassionate, do it as the last resort

Don’t make this a regular feature – don’t cut people every week

Retaining good people You should not lose good people Can be self destructive Differentiate on salary increases Empower and Involve them in decision making Give them more responsibility Give them better jobs

You should not lose good people

Can be self destructive

Differentiate on salary increases

Empower and Involve them in decision making

Give them more responsibility

Give them better jobs

Retaining good people Be transparent, compassionate and fair Communicate well – don’t send conflicting messages Promise a review when things improve Introduce long term reward programs like Retention Bonuses and ESOPs

Be transparent, compassionate and fair

Communicate well – don’t send conflicting messages

Promise a review when things improve

Introduce long term reward programs like Retention Bonuses and ESOPs

Retaining Good People Take care of the insecurity factor Make them feel wanted Communicate regularly Involve more people in decision making meetings so that they understand the situation better Appreciate good work - Its almost Free!

Take care of the insecurity factor

Make them feel wanted

Communicate regularly

Involve more people in decision making meetings so that they understand the situation better

Appreciate good work - Its almost Free!

Thank You Hitesh Oberoi, Director and COO, Infoedge Ltd (Naukri, Jeevansathi, 99acres, Shiksha, Brijj, Quadrangle, Allcheckdeals)