SAPPHIRE HR Weekly - News from the HR world

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SAPPHIRE Weekly

News from the HR World XLRI Jamshedpur 30th October, 2006 School of Business & Human Resources

NEWS India Work Force Management Corporate India’s talent search According to a 2005 McKinsey study, only 25 per cent of our engineering graduates, 15 per cent of finance and accounting professionals and 10 per cent of professionals with any kind of degrees, in India, are suitable for working in multinational companies. In the next two years, India needs to find around 500 to 750 CEOs and another 10,000 functional leaders. If that is the demand over the next two years for business leaders, one can imagine the humongous demand at middle and lower levels. K Sudarshan, managing partner at EMA Partners, an international CEO search firm, (who also provided the above estimates), says: "There is a huge gap between demand and supply for chief financial officers (CFOs) and human resources professionals—both leaders and professionals down the line." At the entry level, Sudarshan feels that shop-floor engineers are a real problem as many of them are moving to finance and management. "And today, with spouses working, many engineers are not ready to move to remote locations." Considering that India, according to an HR industry estimate published in October 2006, will have 47 million surplus employable people by 2020, professionals agree that it is time for some HR value addition. To find out more click on the title. Churn better, not more - The skill lies in managing CEO attrition The demands of quarterly performance from a CEO are key today—and not just in India. From 2000, when one out of every five CEOs of the 200 largest US companies left or lost their jobs, the trend had grown worse—peaking in 2004 and 2005, with performance a major reason. But a reversal has been seen in 2006, ascribed by leading HR experts to stringent regulations, greater board oversight and higher calibre talent. In India, on the other hand, given the dynamics of business growth, CEO attrition is bound to get worse. In the past five years, 66% of India Inc has changed CEOs (86% in MNCs and 57% in Indian business houses). And the situation is particularly worrisome in sectors that are maturing, such as financial services, ITeS and BPOs. To find out more click on the title. Infosys presses panic button on talent, Wipro says take it easy Information technology heavy-weights Infosys and Wipro seem to have contrasting takes on the question of a crunch in human resources in Indian IT industry. With the IT sector set to see a recruitment overdrive in the coming years, to maintain growth rates, the supply of talent has emerged as a key question mark over the industry. As many as 10 lakh people are likely to be hired over the next two to three years in the IT sector. “The limiting factor for India’s growth will be availability of trained people. It is the biggest challenge for the sector as IT companies increasingly battle for talent pool in the country,’’ says Infosys human resources head T.V. Mohandas Pai. “While the number of engineering colleges in the country have increased in the last six years from 523 to 1,352, the quality of students is a cause of concern,” says Pai. Wipro chairman Azim Premji, however, says, “There is adequate talent available in the country and no need for panic’’. Both Infosys and Wipro have incidentally begun their own schemes for creating talent supplies. Infosys has started a programme called Campus Connect at over 100 engineering colleges in the country under which teachers are trained to teach the latest technologies in use in the industry. Wipro has started the Wipro Academy of Software Excellence (WASE) programme, in collaboration with the Birla Institute of Technology and Science (BITS-Pilani), to hire BSc graduates and train them in software engineering over a four-year period. To find out more click on the title. Compensation What's your worth? A booming industry has led pharma companies to hunt for and retain professionals through lucrative compensation packages. Suresh Tiwari, Vice-President, Human Resource, Eli Lilly India advises that the most appropriate way to do the compensation benchmarking in the pharmaceutical industry is to have CTC or TCC (cost-to-company or total cost-to-company). This ensures an apple-to-apple comparison between the company and the market. Mohinish Sinha, Associate Director and Head HR Practice, PricewaterhouseCoopers believes that due to the tremendous growth in the pharma sector and limited industry ready workforce, there has been significant increase in compensation in the pharma industry. Chakraverti points out that the average increase in salary in the pharma sector over the past three to four years has been in the range of 12–15 percent per annum, across all levels. In fact, at certain levels it is better than other sectors As per PwC, the average increase in manufacturing has been between 20–25 percent and in R&D between 30–35 percent in the last two years. Marketing compensation has also increased between 15–20 percent. Most pharma companies have a benefits-heavy structure where cash component is low but other benefits like car and housing is paid for senior and middle management levels. Companies do take care of the internal equities while deciding the compensation of new recruits. "In fact, many pharma companies have recently done salary normalisation in an effort to maintain internal parity," discloses Sinha. To find out more click on the title. Recruitment Expats keen to work in Indian banking sector The Indian banking sector is becoming a hot destination for expats. Headhunters say expats from South East Asian countries are now keen to work for Indian financial services companies, specially banks. They prefer to work in the investment banking, retail and corporate banking, corporate affairs, global markets and microfinance space. Today, the salary drawn by a executive and middle level officer in India is comparable to that offered in Singapore," said Nita Law, regional head HR, India and South Asia, Standard Chartered Bank. Raj Katra, senior vice president and human resource head, ABN Amro Bank says, "Salaries in India are increasingly aligning to those in developed markets while the cost of living is significantly lower, giving the expat greater bang for his buck, speaking literally. An India stint is perceived as a huge professional growth opportunity, given India’s rising stature as a key global player and a huge market, making India a hot professional destination. Expats spend anywhere between two to five years in India." To find out more click on the title. India facing acute shortage of CEOs The shortage is creating some high value targets for headhunters—IAS officers and other bureaucrats, who are joining private sector jobs after resigning from the services or on retirement, experts say. "If you look around, so many companies in India are struggling to find top managers, and, at the highest level, CEOs ... any fast growing company is grappling with the issue of finding good business managers," said Gaurav Lahiri, Head of Operations at the Indian arm of Hay Group, an international management consultancy. The swift growth of India's economy has driven down the age of the average Indian CEO. It was 55 once; it is the 40s or even late 30s now. "There are two reasons for the shortage—one, most companies have not taken leadership development very seriously, and two, the way we Indians have been groomed, it is in the Indian DNA that scholastic achievement is more important. It makes us very individual centric," Lahiri said. A Hay Group study on Indian CEOs conducted over the last three years showed stark differences between Western and Indian CEOs. While Indian corporate executives are extremely intelligent and have deep entrepreneurial skills, the study said, they were found lacking in spotting and grooming talent, and interpersonal skills. To find out more click on the title. Nasscom to launch test for BPO jobs in Nov The Nasscom Assessment of Competence (NAC) - a capability assessment programme for potential employees in the BPO industry, is all set for a nationwide rollout from November this year. The NAC is aimed at addressing the talent shortage faced by the industry, he (Kiran Karnik) said. "The aim is to create a continuous pipeline of talent by 'transforming' the workforce into an 'employable' workforce". According to NASSCOM, only 25% of technical graduates and 10-15% of college students are suitable for employment in the IT and BPO industry. It is estimated that by 2010, India could have a manpower shortfall of 5,00,000 people by 2010. Of this, the BPO gap would be around 3.5 lakh. To find out more click on the title. International Talent Salary survey: war for talent One of the most obvious concerns for our sector is the war for talent that continues to dominate boardroom discussion in the UK. According to the survey an alarming 69% of respondents believe newly qualified accounting and finance graduates are not equipped with the necessary skills required to start work. The most common skill insufficiencies lie in the candidate’s limited knowledge of the company’s industry (26%) and lack of communication skills (22%). Survey overwhelmingly shows that finance professionals nominate career development as the number one factor in determining job satisfaction. When asked about what makes a satisfying work environment, 36% of accountants chose career development opportunities, ahead of the relationship with their boss (28%), salary (19%) and benefits package (11%). To find out more click the title. Work Force Management How to turn your HR program into a center for increased revenue Do you know whether your human resources program is cost-effective? If not, but if you make needed strategic innovations, your HR program will help serve as a catalyst for profits. The Harris Interactive study of 2,800 employees was underwritten by a coalition called the American Business Collaboration (ABC). It includes Abbott, Deloitte & Touche USA LLP, Exxon Mobil Corporation, IBM Corporation, Johnson & Johnson, PricewaterhouseCoopers LLP, and Texas Instruments. There are fundamental differences between men and women. Men want good salaries followed by balance between their work and personal lives. Women want to learn and grow on the job. Secondarily, both genders want good benefits. Salaried men want flexible work schedules and salaried women are more interested in a better balance in their careers and personal lives. Hourly paid men want job security and their female counterparts want benefits. Here’s why employees quit their employers: the data shows 49 percent of men and women look for companies offering good salaries. In fact, 25 percent of such employees are actively job hunting. Another 20 percent admit they could be enticed to leave for enhanced job security. To find out more click on title. Today's workplace climate exposes slackers You're laboring away at work. The paperwork keeps piling up and the boss is asking for more. Then you happen to glance over at a fellow employee - an employee who is lounging around, talking on the phone to friends and generally doing nothing productive. These co-workers, otherwise known as "slackers," may seem like nothing more than a minor annoyance. But studies conducted by Leadership IQ, a Washington, D.C.-based leadership training and research firm, reveal these underperformers can be damaging to a company. "We surveyed about 70,000 employees," said Mark Murphy, Leadership IQ's president and CEO. "We really wanted to understand how people felt about working with low performers. Eighty-seven percent said it made them want to change jobs." Pete Tzavalas, client relationship manager for Capital H Group, a business consulting company in Long Beach, said managers are often reluctant to address the problem of slackers in the workplace. "They don't want to deal with the confrontation, so they give annual performance reviews that say the employee `meets expectations,"' he said. To find out more click on title. Compensation IT salaries expected to rise significantly in 2007 Information technology professionals in the United States can expect starting salaries in 2007 to increase an average of 2.7 percent over 2006, according to a report released Tuesday. The Robert Half Technology 2007 Salary Guide says software developers will see the greatest starting salary gains of any job classification in 2007, with base compensation expected to rise 5.1 percent, to between $60,250 and $94,750 annually. Other key findings from salary guide are: Project managers will earn average starting salaries of between $72,750 and $106,250 annually, an increase of 4.1 percent over 2006. Quality assurance analysts can expect base compensation of between $52,250 and $74,500, a gain of 4.1 percent. Applications architects will see starting salaries rise 4 percent, to between $80,000 and $112,750. Base compensation for network security administrators will increase 3.7 percent, with starting salaries of between $69,750 and $98,500. Average starting salaries for IT auditors will rise 3.1 percent, to between $69,250 and $97,000. To find out more click on title. Regards, Shatdal Shrivastava Team SAPPHIRE PS: Pls send in your feedback at sapphire@xlri.ac.in