Ajay Soni, Business Leader
Talent & Organisation Consulting

Sonali Chatterjee, Project Leader
Best Employers in India 2009 Study

The economic downturn is now a topic of discussion in boardrooms, classrooms, cocktail circuits, gossip groups and even among friends getting together casually. The most discussed aspect is its impact on corporates and how they are faring in these testing times. Not surprisingly, organisations are cautious in their approach to business, customers are prudent in terms of purchase, employees are wary about their jobs and shareholders are keeping their fingers crossed hoping for a speedy recovery in the markets.

So, in such a scenario, what is the significance of a study on the best employers of India? Why is such a study required? The answer is simple: it will help organisations to learn about the human capital management practices of these employers and draw valuable insights from their case studies, which will, in turn, help them cope better with the economic crisis.

The study brought to light some of the underlying principles that govern the practices of best employers.

Focus on the Long-Term

The Best Employers operate in the same difficult market environment as other organisations. However, they have learned that an increased focus on key HR practices, and making minor adjustments without losing sight of larger goals, allows them to sustain their growth and prosper now or when things improve. They believe understanding their employees and doing what is best for them are critical factors that will determine their success. In fact, they are like marathon runners who see this crisis as a blip in the long-term success of their organisation.

As one of the Best Employer CEOs puts it: "The Best Employers Study is still relevant to us, possibly more so. The crisis has impacted us and we need to manage our business with utmost seriousness at this stage. However, continuing to be a good employer during this period is even more important in order to leverage market opportunity when the tide turns. We cannot afford to have a demoralised workforce at that point. It would be corporate hara-kiri."

Walk the Silver Line

The Best Employers see the economic downturn as an opportunity rather than as a threat. They are using this slump to consolidate their resources and for long-term planning. Our conversations with the Best Employers CEOs show that they believe this is the perfect time to find and retain good talent. They believe it is the right time for the organisation to create a competitive edge by keeping important investments going, cementing customer relationships and invigorating the workforce. They consider investing in employees in these times as a strategic decision that will contribute towards future business success.

This approach is underpinned by comments from many of the CEOs who indicate that they are taking direct action to retain talent by making other cost savings. They will continue to reap the benefits of such an action through increases in productivity and profits over time.

Enhance Productivity

The Best Employers are also using this time to be more productive. All of them are using their performance-management systems to align their employee goals to those of their organisations. Employees with high potential are considered a critical group, as is evident from their different rewards structure at 80% of the Best Employers.

Organisations are using creative ways to cut costs. Most of the HR directors reported that the focus on cost-cutting was in non-human capital areas such as travel and other expenses. Most organisations are trying not to have large-scale layoffs, but are being creative in how they manage their human capital.

More use is being made of part-time work, employees are being asked to take accrued leave and to be more flexible in their approaches to work. Many organisations are limiting future hires in an attempt to protect current hires. The HR budget is being spent on learning and development, with most of the Best Employers saying this is the right time to invest in people who will help them ride out the economic crisis.

Let's Talk

There is an increased focus on communication. And rightly so. The Best Employers are ensuring that their team leaders are constantly in communication with their employees on the business realities and possible business scenarios in the immediate future. They talk to them about the steps they are taking as well as the bets they are making for their businesses in the long-term.

This will inculcate a sense of urgency among employees and create a dynamic workforce. Managers have also been briefed on how they should handle employees. Interestingly, even contractors and temporary employees are being included in the regular communications at counselling sessions. Clear communication channels help employees take all cost-cutting measures in their stride and make them look at the organisations’ long-term goals sympathetically.

During a slowdown, uneven resource utilisation among different work groups can be a cause for concern in organisations. At the Best Employers, leadership teams take a balanced approach to resolve this situation. They provide cross-training to ensure improved utilisation of employees. In these times, a broad-based approach is more important than a specialised one. Re-deployment is being used strategically to ensure that employees from lines of businesses that are not doing too well are suitably trained and moved to areas doing well.

The Best Employers understand that such situations call for a closer monitoring of their businesses. Thus, the leadership at these organisations spends more time with employees closely reviewing the business and in taking course corrections, as well as guiding employees on how they should contribute to the business.

A Strategic Choice

But what is the relevance of being a Best Employer during these times? One of the Best Employer CEOs said: "Today, it is much more significant to become a Best Employer. Such a recognition helps distinguish the boys from the men. To be a Best Employer in such times is a tall order. It is my belief that keeping an engaged workforce today will uncork immense value creation for business tomorrow."

Some of the Best Employers, who were listed in last year’s study too, feel more strongly about being in the elite list. "To be selected again in the list reinforces our commitment to our employees. We want to keep doing the good things that will make their work experience with us unique and rewarding during very challenging times. It is critical to us.", said one of them.

Interestingly, it seems the downturn has not affected the Best Employers as adversely as others. They have performed much better and seem to be on more stable ground in terms of handling the economic crisis. And this is not just a chance outcome of survival tactics of these companies. It points more towards a sound business strategy that strongly imbibes the tenets of being a best employer, which will hold them in good stead in the uncertain times that lie ahead.