Employee turnover is expensive. Replacing an employee who quits costs, on average, 21% of their annual pay. While it’s tempting to dismiss turnover as a fact of life in today’s fast-moving job market, new research shows otherwise.* Compensation could be a strategic tool for talent retention, especially when the going is tough.
Traditionally, Indian IT firms have been dependent on the US market for revenue generation. But they have been facing challenges since 2017 because of the US government’s protectionist stance and the advent of automation technologies. In a knee-jerk response to this situation, these companies decided to withhold salary hike for employees. However, most fail to analyze the implications of such measures in the overall context of strategic human resource perspective.
Human resources are one of the key components of any organization. In Indian IT firms, compensation is the key determinant of an organization’s ability to attract and retain talent. At a macro level, compensation packages are determined by market forces, but at the micro level it may vary because of the difference in increments given to employees performing similar tasks.
To understand the dynamics of small-sized Indian IT firms and the compensation policies, one should keep in mind three dimensions: business scenario, employee talent, and job vacancy.
interplay of three dimensions
Business scenario could be favorable or challenging. Since the 1990s, the Indian IT industry has been registering 15 to 25% YoY growth. From an organizational context, if the YoY growth rate is around 24%, the revenue, and along with it the strength of human resources, doubles in three years. This kind of growth rate can promote employees to the next level every three years even if there is no attrition. This is the most favorable situation for IT firms. When the growth rate becomes 18%, it takes four years to double the revenue and employee strength. As long as growth rates are above 15%, the scenario can be termed as favorable; companies can then provide salary hikes of 10% without impacting the margins significantly. The situation starts to become challenging when the growth rates fall to single digits.
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Denne historien er fra July - August 2018-utgaven av The Smart Manager.
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Building A Quality Culture
A strong company culture defined by its values, beliefs, and behaviors, has a profound impact on its products and services. More so in today’s VUCA world, where to stay relevant and maintain a competitive edge, it is critical for organizations to build a culture that focuses on quality. Suresh Lulla, author of Quality Fables, elucidates through significant examples how creating a culture of quality is imperative to driving success and productivity.
Customers For Life
The history of General Motors in India can be traced back to the 1920s, when it became the first automotive company to set up an assembly plant in the country. The relationship since then has not been as fruitful as GM would have hoped. GM’s flagship brand, Chevrolet, was introduced in India to build upon the success of the popular Opel marque. However, success has been fleeting at best—an issue that GM India is determined to rectify. It aims to do so by adopting a two-pronged approach: using customer feedback to influence product development, and delivering a superior sales-to-service experience.
The Digital Shift
… technology will radically disrupt HR in the near future. Indeed, it is already changing the way HR works and the role it plays and opening the door to a new type of “digital HR” function.1 The rise of digital and social media is changing the dynamics of HR and creating new ways of hiring, engaging, and retaining employees.
The Story Of Telling
“The best brands are built on great stories,”* this remark by Ian Rowden best captures the strategy of diligent brand building. Much more than attractive logos or the products themselves, what builds a brand is how successfully a story is woven around it. Brand marketers have to be good storytellers indeed.
Complexity Is Simpler Than You Think
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, shatter myths about excellence models such as Baldrige and EFQM.
Proponents of Isolation Never Become Victors
Multilateralism in the political and economic space has always led to frameworks that favor the mighty. WTO was no exception. With agriculture kept out of its purview, it could never become a truly fair and free trading system. China was the only large emerging economy that exploited relative openness in low-cost manufactured goods to take full advantage of the system. Other emerging economies could at best garner minor gains.
A History Lesson (From Year One) for Trump and the Brexit Crowd: Isolationism Has Never Worked!
Professor Stephane Garelli on growing isolationism.
A Win-Win Game
Business is not a sport where some stakeholder has to lose or fare badly for others to do well. Building an atmosphere of trust and transparency between all stakeholders will help companies retain them even during adverse times.
A Sustainable Model
With a total market value of $4.3 trillion and an employment base of at least 1.3 million direct employees and millions of others indirectly employed, platforms have become an important economic force.*Companies today are constantly looking for ways to build platforms—Infosys Ltd announced its plans of monetizing its platforms to make them a $2 billion business by March 2021. But are all platform businesses successful?
Custom Made
…three in four consumers said they receive too many emails from brands, and one-fifth said they could not handle the current volume…69 per cent have ‘unfollowed’ brands on social media, closed their accounts or cancelled subscriptions.*In these times, when the market is flooded with products and services, the most efficent way to engage customers is to offer them customized content. To achieve this, brands need to focus on observing the nuances of individual preferences.
