Key Challenges for HR Managers

Published by MBA Skool Team, Published on May 12, 2013

Today Human Resource Managers are facing various challenges in India. Some of these challenges are attributed to today’s turbulent times and some have always been there. While issues like Employee Motivation, Managing Diversity, Competency Mapping, Employee Engagement etc are same across industries, different organizations have laid down their own unique plans to tackle these. HR Managers though busy in understanding the staffing challenges ahead of a possible double dip recession, face a few challenges which they cannot afford to ignore. How HR Managers tackle these issues defines the difference between Functional HR Management and Strategic HR Management.

Few of the key challenges faced by HR Managers with utmost priority for sustainability of business and few of the unique ways HR Managers face these challenges are:

Productivity vs Wages

A projection of 10% annual revenue growth and 20% wage inflation over a period of 5 years would bring margins of IT companies down from 33% to 6%. According to Aon Hewitt, Indian salaries will increase 13% from last year’s 11.7%. Indians on an average expect 14% increase in income annually and 40% on job change. Only 25% of 4.5 lakh engineering graduate every year are considered employable by IT/ITeS Companies.

Since it is difficult to contain the rising salaries, HR Managers need to focus on getting more output from the employees. The first issue is employability of entry level professionals. This issue cannot be tackled by an HR Department of a company alone, rather HRs across companies or even industries need to come together to improve the employable talent pool by reducing the gap between industry and academia.

One such initiative has been undertaken by TCS (Tata Consultancy Services) under its Academic Interface Program called Insight. It is aimed at making the students ready with basic programming and soft skills to prepare them for the Industry. Under Insight program, TCS also runs T3, Train the Trainer, initiative to develop trainers within the colleges who can further train more trainers and students. The benefit of this program is not just for TCS, but also for the industry.

For the existing employees, companies are offering training and development solutions unique to today’s era. Conventional training is no longer viable for the corporates owing to virtual teams and nor is it convenient for employees as they demand flexibility. Raymond Retail has effectively managed to use SMS for learning. Every employee is sent a message every day in question and answer form. Every Sunday SMS test is conducted wherein employees need to respond to a question. Lucky winners are awarded every week who give correct answers.

According to Head Tata Administration Services (TAS), “Employees are demanding that they need to be equipped with knowledge and skills and companies are responsible for that.” Today one major reason for attrition is that either the employee feels job has become stagnant or the employee is not fit for the job. Here comes the issue of attrition and the next challenge for HR Managers.

Employee Retention

High attrition levels of knowledge workers are posing serious concerns for companies these days. Most of the hiring effort goes in replacement of lost employees and more efforts have to be made to hire for growth. Cost per hire is also going high due to lack of high quality candidates in the market. Hence, it makes it extremely important for the companies to retain the high performing employees.

A unique program is used in Wipro to retain employees who can seek opportunities in an internal job posting offering called Wings Within. Another program unique to Tata group allows Tata group employees to apply for positions within Tata Group Companies. The philosophy is if an employee is to be lost, why not lost within the family.

Despite all the measures employee retention is a major challenge; hence, to counter its effects on the organization, another major challenge faced by HR Managers is Succession Planning.

Succession Planning

Talent shortfalls are spread across industries, but the toughest positions to fill appear to be those of executives or of high skilled roles. Succession planning is not just necessary for continuity of operations of the organization but also its culture. With introduction of new people, the risk of distortion of workplace culture is always there. Hence, succession planning is increasingly becoming important. Though succession planning has been popular concept in family businesses for ages, its importance has been felt everywhere.

According to NASSCOM-People Matters Survey 2011, 70% respondents agree that succession planning is an area of highest strategic importance for their business while only 23% actually invest most of their time and effort on such activities.

Infosys Leadership Institute is a step taken by the IT major towards succession planning.  The goal of the Infosys Leadership Institute is to groom and develop leaders of tomorrow from promising Infoscions. At Infosys senior managers are involved in leadership development, based on the belief that “the company is the campus, the business is the curriculum and leaders shall teach”.

The article has been co-authored by Varun Arora and Kanika Bansal

[1] “IT/ITeS Winds of Change”, People Matters, Volume II, Issue 9, September 2011, Page 26-43

[2] “Employee and labour Welfare at the Tata Group Companies”, Management and Labour Studies, Volume 35, No.3, August 2010

[3] “SMSing the Raymond way”, People Matters, Volume II, Issue 9, September 2011, Page 48

[4] “Employee and labour Welfare at the Tata Group Companies”, Management and Labour Studies, Volume 35, No.3, August 2010

[5]“Contain Attrition with IT”, Dataquest, Saturday, February 05, 2005

[6] “IT/ITeS Winds of Change”, People Matters, Volume II, Issue 9, September 2011, Page 26-43

[7] “Developing Leaders @ Infosys”, Praxis, Business Line, June 2002, Page 38-43

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