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Emerging trends of human resource management


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Emerging trends of human resource management

  1. 1. Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)88 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010EMERGING TRENDS OF HUMAN RESOURCEMANAGEMENT (WITH SPECIAL FOCUS ONINFORMATION TECHNOLOGY INDUSTRY)Eme rgin g Tre n d s of Hum an Re sou rc e Man age me n t (Wit h Sp e c ia l Foc u s on I n f orma t ion Te c h n ology I n dust r y)Ms. Amrita GargHuman Resource Executive, Teerthanker University, MoradabadMs. Anshika SharmaLecturer, Department of Management Studies, IFTM, MoradabadMr. Manish Ranjan PandeySenior Lecturer, Department of Management Studies, IFTM, MoradabadABSTRACTHuman resource is a relatively modern management term having been coined in the1960s. The origins of the function arose in those organizations which introducedwelfare management practices and also in those that adopted the principles ofscientific management.Since 1990 due to liberalized government policies, Indian scenario began to change.Human resource became one of crucial driver for development and change. As theviewpoint of management towards its employees began to change, role andcontribution of human resource as a talent pool also become so vital that most of theorganizations started to focus their vision and mission statements on the people whowork for them.With the boom in the technology sector in 2000, newer and newer ways of attracting,recruiting and managing tenant in the companies also started to emerge. This papertries to identify various trends which came into existence as a result of technologyrevolution in the country and make a comparison between pre and post liberalizationHR trends in IT industry.Keywords: Human Resource Trends in IT industry, Online Recruitment Systems,Human Resource in Pre and Post Liberalization Era.GENESISHuman Resource is a term used to describe the individuals which comprises theworkforce of an organization, although it is also applied in labor economics, forexample, business sectors or even whole nations. Human Resource is also the name ofthe function within an organization charged with the overall responsibility forimplementing strategies and policies relating to the management of individuals (i.e. thehuman resources). This function title is often abbreviated to the initials HR.Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010 89Human resource is a relatively modern management term having been coined in the1960s. The origins of the function arose in those organizations which introducedwelfare management practices and also in those that adopted the principles ofscientific management. The use of the term, human resources by organizations todescribe the workforce capacity, is available to devote to the achievement of itsstrategies. In the simplest terms, the objective of an organizations human resourcemanagement strategy is to maximize the return on investment from the organizationshuman capital and minimize financial risk. Human Resources seeks to achieve this byaligning the supply of skilled and qualified individuals, and the capabilities of thecurrent workforce, with the ongoing and future business plans and requirements of theorganization in order to maximize return on investment and seeks to secure the futuresurvival and success of the entity. In ensuring such objectives are achieved, the humanresource function purpose in this context is to implement the organization‘s humanresource requirements effectively but also pragmatically, taking account of legal,ethical and as far as is practical in a manner which retains the support and respect ofthe workforce.The Human Resources function may set strategies and develop policies, standards,systems and processes to implement these strategies in a whole range of areas forwhich the following would be typical of a wide range of organizations.
  2. 2. 1. Recruitment and Selection (Resourcing)2. Organizational design and development.3. Business transformation and change management4. Performance, conduct and behavior management5. Industrial and employee relations6. Human resources (or workforce) analysis and the management of workforcepersonal data7. Compensation, rewards and Benefits management8. Training & development (Learning management)Implementation of such policies, processes or standards may be directly managed bythe HR function itself, or the function may indirectly supervise the implementation ofsuch activities by managers, other business functions or via third-party externalpartner organizations.HUMAN RESOURCE MANAGEMENT TRENDSIn organizations, it is important to determine both current and future organizationalrequirements for both core employees and the contingent workforce in terms of theirskills/technical abilities, competencies, flexibility etc. The analysis requiresconsideration of the internal and external factors that can have an effect on theresourcing, development, motivation and retention of employees and other workers.The external factors are those largely out-with the control of the organization andinclude issues such as the economic climate, current and future trends of the labormarket e.g. skills, education level, government investment into industries etc. On theEmerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)90 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010other hand internal influences are broadly within the control of the organization topredict, determine and monitor, for example the organizational culture underpinnedby management behaviors (or style), environmental climate and the approach to ethicaland corporate social responsibilities. In order to know the business environment inwhich any organization operates, three major trends should be considered:Demographics – It is the characteristics of a population/workforce, for example, age,gender or social class. This type of trend may have an effect in relation to pensionofferings, insurance packages etc.Diversity – It refers to the variation within the population/workplace. Changes insociety now mean that a larger proportion of organizations are made up of "babyboomers"or older employees in comparison to thirty years ago. Advocates of"workplace diversity" simply advocate an employee base that is a mirror reflection ofthe make-up of society insofar as race, gender, sexual orientation, etc.Skills and qualifications - As industries move from manual to more managerialprofessions, so does the need for more highly skilled graduates. If the market is "tight"(i.e. not enough staff for the jobs), employers will have to compete for employees byoffering financial rewards, community investment, etc.HR TRENDS IN PRE-LIBERALIZATION PHASEIn 1990 due to liberalized government policies of various countries the human resourcestarted floating from one country to another this led to diversification of workforce andcross culture took place as a result employees from one nation migrating to anothernation and bringing their culture with them this led to mixed organization culture sothe HR professional has to play major role in coordinating the workforce of differentculture in an organization.Evolution of Personnel management started in 19th century at that time there was aboom in industrialization which leads to increase in franchising and influence of tradeunions and harshness of industrial condition called for the better of industrialcondition. Second World War increased the importance of having personneldepartment because of producing large war materials the ministry of labor andnational services insisted to combine both personnel department and welfare officerwork on a full time basis.HR TRENDS IN POST-LIBERALIZATION PHASE
  3. 3. Corporate India has come a long way since Independence. Today Indian companieshave spread themselves across the globe and are moving to a borderless world.Similarly post liberalization and globalization a large population of Indians havebecome a part of the multinational and foreign units. In short, the Indian workforceand the industrial climate are both continuously changing. Thus at this juncture it isvery vital to understand the changing trends of the most valuable asset of anorganization – Its people. There is constant need to develop capabilities, leverage themEmerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010 91to ensure the growth and success of an organization and at the same time add value toan organization.The key players who have served as facilitators are the Human Resource professionalswho have moved beyond their administrative role to emerge as a strategic businesspartner. Their role has become very critical in providing radical solutions toorganization success. Today they no longer work in independent silos, but havealigned themselves with the strategic goals. With the changing market trends HR todayis faced with several challenges and people management issues in this talent – shortmarket. Human resource professionals need to think differently today and furtherexperiment varied processes & methodologies benefiting the human capital and theorganization at large.EMERGING HR TREND IN INDIAA look at the trends in managing people in this dynamic industry reflects thatAttracting, Managing, Nurturing talent and Retaining people has emerged to be thesingle most critical issue in lieu of the enormous opportunities spun off by the market.The new avatar of talent is the knowledge professional who is innovative, businesssavvy, quick on the uptake, has an instinctive ability to network, and possessingunbridled ambition. They are propelled by an urge to experiment, scan new avenuesthat can spur their creativity. The knowledge professional will gravitate to anorganization that is flexible, has strong values, a robust performance ethic and provideschallenging work on latest technology. This has led to companies proactively takingmeasures on three fronts. First, companies create an organizational ambience wheretalent can bloom. Second, they put in place systems that help unleash their potentialand third, they build a reward and recognition mechanism that provides value forpeople.HR TREND IN INFORMATION TECHNOLOGY INDUSTRYTechnology constantly generates unexpected consequence. The simple ability to sendinformation anywhere immediately, at minimal cost has so many ramifications. Themost obvious of the effects being in the reach and speed of dissemination ofinformation. The Human Resource trend in Information technology is discussed in thisstudy.Three significant growth trends in Corporate India are now pushing Hr Manger to looktowards technology for solution. First – an explosion in CEO – Level searches and hiresby Indian companies. People like Director of Tata Sons‘ Alan Rosting, Ranbaxy CEOBrian Tempest, and Managing Directors of Indian Hotels Raymond Bickson arefamiliar examples. Second, many companies are searching for middle and entry-leveltalent. Tata Consultancy plans to hire 800 people in the US this year, mostly offcampuses. Third, Indian companies are inheriting a large number of employeesthrough global acquisitions. For example, Tata Motors gained 1,000 global workersthrough acquisition in Korea and Spain. And Dr.Reddy added 340 workers through aMexican acquisition in November.Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)92 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010In this scenario- Role of HRM in integrating employees into the organization withspeed ensuring high levels of performance becomes more critical than ever. And its istechnology in the form of HR systems that is aiding the HR department in doing thistoday, keeping pace with the growing needs of Indian business.FINDINGS AND DISCUSSION
  4. 4. As per the research plan, the researchers are gone through various available literaturesshowcasing the trends in Human Resource Management features and practices acrossthe industries and found the following key trends in such practices:1. The country which has been such a popular people resource for the IT industry theworld over, is struggling with numbers to meet its own demand. To meet theoverall software and services (domestic and export) target of $87 billion by 2008,according to the Nasscom-McKinsey report, the country will require a minimum of2.2 million knowledge workers for its domestic needs. This implies that the presentstrength, which stands at 12,00,000 (December 2004), has to increase about twice,not just in quantity but in quality as well.2. According to industry estimates, majority of the demand for manpower will be inthe area of IT-enabled services. While Nasscom puts the requirement at 11,00,000,MIT says IT-enabled services and e-business will need 12,70,000 workers by 2007.Experts insist that since this sector does not require very highly skilled manpower,we can easily meet this demand. "IT-enabled services is a wonderful opportunityfor India and for such services you don‘t need highly skilled professionals. You justneed smart graduates who can speak English, all you need to do is train them. Forinstance, in a call center, they need to be trained on accents and customer services,"3. Emerging concept of 4 R’s among Human Resource Managers:Recruiting Retaining Retraining RestructuringSigning bonusFinders FeeAlumniconnectionsNon-techsStudentsInternsRetention bonusProject payReduct FTE/samepayTelecommutingExternsJob sharingRecognitionprogramsJob rotationTeamassignmentsSkill inventoriesCompetencydevelopmentCertificationBroad job descriptionsFlexible compensationprogramsFlexible jobsPositive problemsolvingspiritSource: Hr Trend in IT Industry, War talentEmerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010 934. HIRING TRENDS among IT Companies in last few years:The above chart shows that the recruitment of engineers and IT professionals in theindustry is growing at the Compound Annual Rate of 14.5% approximately. The directemployment in the IT-ITES sector was 1.3 million people and the indirect employment
  5. 5. was 3 million approximately.5. SALARY TREND also shows that Along with abundant growth opportunities, ITsector is one of the highest paying sectors. The average increase in salary in ITsector across the levels was around 16% and the average increase in the ITeS BPOsector across the levels was in between 16%-18%.6. The Indian IT services industry, which has been a forerunner in creating andimplementing innovative HR strategies, is expected to focus more on strengtheningthe middle management cadre. The IT industrys challenge seems bigger as thesector is facing an acute shortage of skilled manpower, rising income levels and theproliferation of new job opportunities.7. During the recovery period, many companies have adopted various advancedtechnologies in their work life like human analytics, human capital management,early warning systems and others. These technologies help increase the efficiencylevel and meet the ever increasing needs in this competitive world."8. Pankaj Shankar, global head (HR) at the technology solutions company InfogainCorporation, says that acquisition and retention of talent will not be the onlychallenge. "Apart from talent acquisition and retention, leadership development,aligning and integrating peoples performance with business goals, management ofintellectual capital and compensation management would also require attention ofHR managers in the coming year," he adds. The Indian IT services industry, whichhas been a forerunner in creating and implementing innovative HR strategies, isexpected to focus more on strengthening the middle management cadre. The ITEmerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)94 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010industrys challenge seems bigger as the sector is facing an acute shortage of skilledmanpower, rising income levels and the proliferation of new job opportunities9. Nine Major HRM Trends and Strategies to deal with global slowdown include:(Source- HANNA HUMAN RESOURCE)Trends ResponseTransportation Support and FlexibleSchedulingNoneTelecommutingFour-Day Work WeekOrganized CarpoolsPublic Transportation DiscountGas Card Reward SystemJob Sharing41.4%37.9%31.0%17.2%10.3%6.9%6.9%Environmental ResponsibilityPolicy (Go Green)Informal Policy implementedNo Policy with Plans to Have One in 2009No policy with No Plan to Create OneFormal Policy Implemented31.1%25.0%25.0%17.9%Use of Online CommunitiesUsed in the Workforce.
  6. 6. Communicate with CustomersRecruit Potential EmployeesBetween EmployeesNetwork With Blessing Prospects60.0%53.3%53.3%40.0%Tasks That Will be Outsourced in 2009Employee AssistanceBackground ChecksPayrollCompensation AdministrationOutplacementTrainingBenefits Administration78.9%63.2%47.4%21.1%15.8%15.8%5.3%Percentage of Workforce BeingDownsizedNo Layoffs1-5%6-10%31.1%35.7%10.7%Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010 9511.20%21-30%14.3%7.1%Strategies to Deal With IncreasedHealthcare Costs.Health Promotion Wellness ProgramConsumer Directed health Plan DesignsDefined Contribution Health PlanRisk Factor IdentificationBroader Absence Measurement Manager92.6%33.3%29.6%14.8%11.1%Solutions Used To SupportRetention Strategies.Training and Development ProgramsCompensation and BenefitsRecognition and Reward Program65.4%53.8%50.0%
  7. 7. Preparation for the "Brain Drain"Plan on dealing with the issue in 2009Do not plan on dealing with the issueActive Program in place to identify andtrain future leadersOn-Going Recruitment ProgramSolid Succession Plan48.3%13.9%13.9%10.3%10.3%Multiple Generations in WorkforceBaby Boomers (ages 44-62)Generation X (ages 28-43)Generation Y (ages 24 below)Traditionalist (ages 63-82)42.22%40.19%15.22%6.38%The above 9blocks are showing the 9 Human resource Trends of the year 2009 alongwith responses by various respondents in various ways. These trends includespercentageof workforce being downsized, Strategies to deal with increased healthcarecosts, solutions used to support retention strategies, preparation for the brain drain,multiple generation for the workforce, Transportation support and flexible scheduling,environmental responsibility policy, uses of online communication used in workforceand tasks that will be outsourced in 2009.10. The HR function is in for a very different year from last year and a tough one too: HR budgets are being reduced in 43% of organizations. 40% of organizations expect to be reducing headcount.The focus for the year ahead has changed dramatically from last year:- 2008 was ayear focused on recruitment and retention. And 2009 will be a year focused onorganizational restructuring and developing employee capability.Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)96 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 201011. IBM said-―IBM researchers have also developed a "Skills Planning" model foroptimal allocation of skills and job roles across an organizations multiple sites, tominimize the impact of a disaster at any one site. This model takes into accountvarious operational aspects, including critical workloads, skill levels, mobileworkers, multi-skilled workers, cross-training, operations in shifts, wage costs, andmulti-location communication or management overheads.‖12. Keeping employees ‗in-the-know‘- HCL Technologies has also oriented itself in asimilar manner, focusing on communications, to keep employees ‗in-the-know‘ andmaintain transparency. According to D K Srivastava, Global Head, Corporate HR,HCL Technologies, trust through transparency with all its stakeholders is the coreculture at HCL.―HCL Technologies has a well-fuelled mechanism set up to enable employees toenhance their skills; increase productivity and increase deployability. We have adedicated department that focuses only on training employees — the TalentTransformation and Entrepreneurship Development team,‖ Srivastava states.CONCLUSIONHuman resource Management will be the key area of focus in 21st century as incompanies and government organization put in place strategies to cope up with theeconomical crisis and recovery. The so called ―war for talent‖ is on the backburner asthe focus shifts to hiring freezes, benefits and compensation cost management, and
  8. 8. workforce reduction in the hardest- hit segment and as the the era of skill-basedworkers has arrived but if India wants to truly move to the global arena, it has tospruce up its workforce. Small may be beautiful, but not in the IT industry. In theknowledge era and a skill-based economy, it has become imperative that humanresources become one of the most essential ingredients of success. The growth of ITcompanies worldwide depends on its people and the intellectual capital it possesses.‗Knowledge workers‘ has become a buzzword in today‘s IT scenario. And if we look atthe top software exporters, they have been growing phenomenally in workforcestrength. To make it big in the global software market, India needs to increase its massof knowledge workers. The total human resource strength of the IT industry as a wholestands at 425,609. A company-wise break-up of this figure reveals that nearly 525companies constituting 35% of the IT industry employ an average of 58 persons each,750 companies constituting 50% of the industry employ an average of 275 persons each,and 150 companies constituting 10% of the industry employ an average of 726 personseach. At least 40 companies have more than 1,000 employees, while some very bigcompanies like TCS, Wipro, HCL and Infosys have staffs above 5,000 each.As we already know that Human Resource Management of the organization deals withthe individuals putting their hard work to meet the organizations goals. Managingpeople is the toughest element of any organization than land, machinery or finances.Every human being has its own degree of preferences, likings and attitude. So, HREmerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 2010 97managers have to take care of all these things in mind while dealing with the numberof people working in the organization.But, emerging HR trends of Information Technology industry cannot be managedproperly by the old traditional HR techniques. As it is commonly known that manlearns by experience. 50 years of introduction of computers has provided us the areasto be additionally addressed by the HR managers in IT sector. Indian IT industry is notan exception.Hence, the IT industry has been devising newer Personnel Management/ HRtechniques which specifically meet the needs of IT industry. The main reason for this ishigh standards of education and professional training required for this industry.Secondly, there is an excessive job demand for developed countries in this sector andhigh wage standards. So, HR managers mainly in developing countries like India findit very difficult to retain and recruit their manpower.Hence, it can be concluded that Emerging HR trends of Indian It industry are quitedifferent from the old economy industry. India is considered one of Super Power inInformation Technology and allied fields. Majority of world leaders in IT sector areoutsourcing their requirements from Indian IT Industry and recruiting Indian ITprofessionals. Hence, the Indian Government must allow the Industry to meetinternational competition and desired environment in respect of Labour Laws andfinancial rules must be liberalized for this Indian IT Industry. Moreover, HR managersin Indian IT Industry must keep the sensitive nature of IT professionals and state ofgreater opportunities outside in mind for devising HR policies for their organizations.REFERENCES1. Ashwathapa K. (2005) ‗Human Resource Management‘ Tata Mc Graw Hills, Fifthedition2. Kothari C.R., ―Research Methodology: Methods and Techniques‖, WishwaPrakashan, New Delhi, Edition 2nd, 2003.3. Mamoria C.B and Gankar S.B ( 2005) ‗Personnel Management‘ HimalayaPublishing House, Twenty Fifth edition.4. Pareek, U and T.V.Rao, 1981, "Designing and Managing Human ResourceSystems", Oxford and IBH Publishing Co., New Delhi.5. Rao, T.V. and Abraham, E.A.," A Survey of HRD Practices in Indian Industry, inRao, T.V. and Pereira, D.F., Recent Experiences in HRD, New Delhi, Oxford & IBH,1985.
  9. 9. 6. Trends of Human Resource Management (With Special Focus on Information Technology Industry)98 LACHOO MANAGEMENT JOURNAL, Volume 1, Number 1, July – December 201010. Technologies (Rank 2)Revenue FY11: Rs 25,997 croreRevenue FY10: Rs 21,355 croreGrowth FY11: 22%Infosys is the second largest IT company in India with 133,560 employees as of March 2011.Infosys is ranked 28th globally in the list of IT services providing firms.It has offices in 33 countries and development centers in India, China, Australia, UK, Canada, Braziland Japan.Image: Infosys campus, Mysore. Prev NextSharethisAskUsersWrite aCommentPrint thisarticle
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  21. 21. MoreALSOREADMOSTRECENTMOSTEMAILEDMOSTCOMMENTEDIndias best-managed companiesAmericas 20 most reputable companiesThe 10 luxury brands in the worldStunning images of the worlds biggest cruise shipAmul ads in 2011: Must-see hits!
  22. 22. Wipro (Rank 3)Revenue FY11: Rs 24,899 crore (Rs 248.99 billion)Revenue FY10: Rs 21,949 crore (Rs 219.49 billion)Growth FY11: 13%Wipro is the third largest IT services company in India and employs more than 122,385 peopleworldwide as of March 2011.Wipro is ranked 31 globally in 2011 in the list of IT service providers. The company does business ininformation technology, consumer care, lighting, engineering and healthcare businesses.Click NEXT to reaHewlett-Packard India (Rank 4)Revenue FY11: Rs 23,227 crore (Rs 232.27 billion)Revenue FY10: Rs 17,831 crore (Rs 178.31 billion)Growth FY11: 30%HP is one of the worlds largest information technology companies, operating in almost everycountry.HP specialises in developing and manufacturing computing, data storage and networking hardware,designing software and delivering services. It is headquartered in Palo Alto, California.Click NEXT to read moreImage: H-P Lab, Bangalored moreCognizant Technology Solutions (Rank 5)Revenue FY11: Rs 21,393 crore (Rs 213.93 billion)Revenue FY10: Rs 15,646 crore (Rs 156.46 billion)Growth FY11: 37%Cognizant Technology Solutions has beaten Wipro for the first time in the June quarter to becomethe third largest software exporter from India.Cognizant is an American multinational provider of information technology, consulting and businessprocess outsourcing services.It has been named to the 2010 Fortune 100 fastest-growing companies for the eighth consecutiveyear.Click NEXT to read moreImage: Cognizant office.IBM India (Rank 6)
  23. 23. Revenue FY11: Rs 14,132 crore (Rs 141.32 billion)Revenue FY10: Rs 12,388 crore (Rs 123.88 billion)Growth FY11: 14%Headquarted in New York, IBM is a multinational computer technology and IT consulting corporation.IBM has been present in India since 1992. IBM Indias solutions and services span all major industriesincluding financial services, healthcare, government, automotive, telecommunications and education.Click NEXT to read moreImage: IBM India