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‘HR’s Next Agenda’ Ernst & Young - NHRDN HR Practices Survey 2008

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  • 1. ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey 2008 N S Rajan Regional President, NHRD (North) Partner, Human Capital, E&Y
  • 2. Contents ► About the Survey ► Our Approach ► Key Findings ► Way Forward ► About Ernst & Young Page 2 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 3. About the survey Page 3 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 4. About the survey ► ‘HR’s Next Agenda’ - The Ernst & Young NHRD HR Practices Survey, 2008 is the first of its kind study of the people practices in India ► Objectives of the Survey: ► The survey is intended to study the state of HR practices and the upcoming priorities of HR in India with a view to ► Create a baseline of current practices ► Provide directional guidance to the trends shaping the HR function ► Scope of the Survey: ► HR systems, processes and practices around Organization Vision, Mission & Values, Recruitment, Performance Management, Training & Development, Career Development, Compensation & Benefits, Rewards & Recognition etc were studied ► The survey coverage extended to Organizations with varying employee strength, turnover and industry sectors Page 4 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 5. About the survey ► 188 Organizations across 15 Industry Sectors responded to the survey Industry Sectors Respondents Industry Sectors Respondents Automotive 7 IT/ITes 44 Banking/ Financial Services/ 14 Media and Entertainment 8 Insurance Professional Services 15 Chemicals and Petroleum 8 Real Estate 9 Consumer Goods 8 Electronics/ Technology 10 Retail 11 Healthcare and 10 Telecommunication 7 Pharmaceuticals Industrial Products 16 Travel and Tourism 5 Infrastructure 16 Page 5 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 6. Our Approach Page 6 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 7. Our Approach ► The survey was carried out in the following phases: Administration Design Phase Analysis Phase Phase ►A stratified sampling methodology was adopted to identify participating organizations across 15 industries on the basis of type of industry, size and turnover of organizations ►A focused online questionnaire was developed to capture responses across various fields of HR ► The responses received to date were then collated and analyzed on the basis of the Survey Framework ► Dataobtained was also supplemented by qualitative insights from select senior HR professionals who were interviewed Page 7 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 8. Key Findings  How has the business environment changed? What are the trends that we foresee?  Are Indian organizations more surefooted on the global business stage?  What are the expectations that business has from HR professionals? Page 8 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 9. HR Strategy and Processes ► HR has a prominent seat at the table and is extensively involved in the strategic business planning process (90 % ) ► Large organizations believe that HR adds critical value to the achievement of business results (100%) ► Line managers involvement in HR strategy and implementation is high and will continue to increase (80 %) ► Limited focus on increasing effectiveness of HR processes ( 40%) HR’s next agenda:  Partner with business to reduce cost and improve efficiency  Increasing accountability of HR with 65% of the organizations planning to introduce effective measures of performance for HR Page 9 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 10. HR Strategy and Processes HR has evolved into making or breaking a business. This change has made HR into a business facilitator. Aquil Busrai IBM Page 10 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 11. Compensation and Benefits ► Increments unlikely to be beyond 8 -10% in the coming year ► Performance linked pay taking significant precedence impacting even junior levels (from 5% of CTC in 2002 to 12-15% currently) ► Financial Services has the highest incidence of short term performance pay ► Chemicals & Petroleum industry is high on benefits ► More transparency required in compensation practices (>50%) ► Low prevalence of Long term Incentives like ESOP HR’s next agenda:  Strong variability - link between business performance & pay  A Standard Global Compensation system across geographies Page 11 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 12. Compensation and Benefits Transparency is not about putting up compensation structures on the website. Employees must know that things happen here in a fair and equitable manner. Satish Pradhan Tata Sons Page 12 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 13. Talent Acquisition & Employer Branding ► Internal recruitment preferred to external recruitment ► Positive corporate reputation biggest draw for hiring suitable talent (100%) ► Well defined Employee Value Proposition highly co-related with organization size (especially for those with employee strength exceeding 1000) ► New hire coaching and mentoring more prevalent in Retail, Consumer goods and Health care ► Hiring to continue despite economic slowdown (with 70% of organizations agreeing) HR’s next agenda:  Focus on Employer Branding- Internal focus to ensure employee experience as per brand promise, External Communication Cells to build compelling stories of employer value proposition to key stakeholders  Strengthening Campus Relations Program through campus ambassadors Page 13 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 14. Talent Acquisition & Employer Branding The real challenge is how to attract specialized talent, together with building solid employee engagement. Anand Nayak ITC Page 14 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 15. Performance Management and Measurement ► Individual goals not well aligned to business goals (70%) ► Communication of performance feedback and ratings to employees are areas of improvement (70% ) ► Normalization of Ratings – important practice for rationalizing ratings and maintaining costs (80% ) ► PMS Linkages to bonus highest in Financial Services; to training highest in Consumer goods; to career management highest in IT/ITES HR’s next agenda: • Increased used of the Balanced Scorecard • Development of Reviewer coaching skills for providing relevant feedback and impartial ratings  Automation of Processes through web based PMS Page 15 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 16. Performance Management and Measurement Performance is an equally important part of the equation. Pay for performance can work only if both ends receive equal attention. Santrupt Misra Aditya Birla Group Page 16 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 17. Training and Development ► No budget cuts expected in Training and Development Activities over the next 1 year, time spent on training to increase (78%) ► Well defined training policy and training needs identification at all levels (70 %) ► Competency based needs identification and development still an area of gap ( 52 %) ► Organizations unable to determine ROI on Development spend, employees unclear on what skills they are expected to learn ► IT enablement of Training program management lacking HR’s next agenda:  “Action Learning” – On the Job training programs to replace classroom learning  Measuring effectiveness of training programs Page 17 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 18. Training and Development In the context of decreasing capital investment and increasing employee costs, HR needs to drive the supply agenda. K Ramkumar ICICI Page 18 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 19. Leadership Development ► Only a third of identified future leaders satisfied with organizational support for their development ► In larger organizations, leadership identified as a core competency ► Smaller organizations introducing measures to strengthen their succession planning process ► Chemicals and Petroleum, Electronics and Technology and Health care and Pharmaceutical industries indicate that top management considers leadership as a critical process (70%) HR’s next agenda:  Task forces of top performers across the hierarchy to work closely with the CEO on all critical business projects  Increased investment in leadership development initiatives Page 19 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 20. Leadership Development Leadership style should be conducive and enabling towards strategy, not a constraint Arvind Agrawal RPG Page 20 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 21. Organization Culture ► Information flow takes place in all directions in most organizations (60%) ► Larger the organization, greater is the emphasis on communication and feedback mechanisms ► Involvement of employees in decision making low (75%) ► Confidence and trust in subordinates is an issue (60%) ► Grievance redressal and whistle blower policies need strengthening (70%) HR’s next agenda:  Increased empowerment through delegation  Strengthen diversity programs and alternate talent pool programs  Idea portals to collect employee feedback and provide it directly to the leadership Page 21 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 22. Organization Culture Construct the social reality, shape values, and attend to the drama and vision of the organization. P Dwarakanath Page 22 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 23. Way Forward Page 23 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 24. Way Forward ► A snapshot of some of the interesting insights captured as part of the way forward for HR: Cost Efficiency Web Based Job PMS Sculpting HR Action Way Communication Learning Forward Centre of Programs for HR Excellence Workplace Competency Flexibility Based PMS Diversity Programs Page 24 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 25. Way Forward The true role of an HR professional is to be an alchemist… Page 25 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 26. About Ernst & Young Page 26 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 27. About Ernst and Young 140,000 people | 750 offices | 134 countries | 1 unwavering commitment Who we are India expertise Human Capital (India) • >4000 people • Among 5 global “Centers of People who demonstrate Excellence” • 139 partners integrity, respect, and teaming. • >60 senior professionals • 9 Locations People with energy, enthusiasm, • Industry expertise - 13 • End-to-end HR value chain expertise and the courage to lead. Industry Practices • Specialists in strategic people • Domain Expertise - People who build relationships solutions Assurance, Tax, Transactions • Strong business based on doing the right thing and Advisory Service Lines understanding & implementation focus What we stand for • Global delivery experience At Ernst & Young, we’re Strategy • > 50% - Repeat business committed to helping our • 90% clients rated us 5/5 on a people, our clients and our wider Customer Satisfaction index communities achieve their Sector Sector potential. It’s how we make a Experts experts difference. Value Performance creation Technology Process improvement experts experts We hold the #1 or #2 market position in 7 of our top 10 markets Page 27 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008
  • 28. Our India Offices Ahmedabad Bangalore Chennai Gurgaon Shivalik Ishan Building "UB City", Canberra Block TPL House, 2nd floor Golf View Corporate Tower - B 2nd Floor 12th & 13th floor No 3, Cenotaph Road Near DLF Golf Course Beside Reliance Petrol Pump No.24, Vittal Mallya Road Teynampet Sector 42 Ambavadi Bangalore - 560 001 Chennai - 600 018 Gurgaon - 122002 Ahmedabad - 380015 Tel:+91 80 4027 5000 Tel: +91 44 2431 1440 Tel: +91 124 464 4000 Tel: +91 079 66083800 Fax: +91 80 2210 6000 Fax:+91 44 2431 1450 Fax: +91 124 464 4050 Fax: +91 079 66083900 Hyderabad Mumbai Mumbai Mumbai 205, 2nd floor 6th floor & 18th floor Jalan Mill Compound Jolly Makers Chambers II Ashoka Bhoopal Chambers Express Towers 95, Ganpatrao Kadam Marg 15th floor, Nariman Point Sardar Patel Road Nariman Point Lower Parel, Mumbai - 400 021 Secunderabad - 500 003 Mumbai - 400 021 Mumbai - 400 013 Tel : +91 22 6749 8000 Tel: +91 40 2789 8850 Tel: +91 22 6657 9200 (6th floor) Tel: +91 22 4035 6300 Fax : +91 22 6749 8200 Fax: +91 40 2789 8851 +91 22 6665 5000 (18th floor) Fax:+91 22 4035 6400 Fax:+91 22 6630 1222 Kolkata New Delhi Pune 22, Camac Street 6th floor, HT House C-401, 4th floor Block 'C', 3rd floor 18-20 Kasturba Gandhi Marg Panchshil Tech Park Kolkata - 700 016 New Delhi - 110 001 Yerwada (Near Don Bosco School) Tel: +91 33 6615 3400 Tel:+91 11 4363 3000 Pune - 411 006 Fax:+91 33 2281 7750 Fax:+91 11 4363 3200 Tel: +91 20 6601 6000 Fax:+91 20 6601 5900 Page 28 ‘HR’s Next Agenda’ Ernst & Young - NHRD HR Practices Survey, 2008