In 2012, HR professionals were engaged in becoming strategic business partners to organisations. That attitude was necessary to deal with challenges ahead. As HR heads were trying to be seen as change agents, they worked hard to understand the business, as good as the top leadership, to offer real time solutions that would have significant impacts on business. They tried hard to induce technology into HR. Some succeeded, for others it resulted in an unsatisfactory attempt.
In the services sector, where wage to revenue percentages are very high, this has become a necessity. A few, however, have used technology to its best. The focus of organisations being more on business consolidation, and on increasing profit margins by controlling costs, has led to many compromises at the HR front. The flip side of it is that HR personnel have become more vocal (thanks to the frustration due to cost control measures) and started playing a lead role in advising CEOs that compromising on HR activities would only take them further to the ground. But the battle continues as CEOs remain focused on margins.
With the country’s estimated GDP growth in 2013 pegged at 7.6 per cent and various states going in for elections, a policy implementation freeze at the government level has occurred. Human Resource practitioners are worried that a lot of initiatives at the company level will once again be put on the back-burner. This led them to ring the warning bell in 2012 itself, cautioning senior management that if the organisations do not change their attitude towards HR activities in 2013, they are sure to kill the company’s progress.
In 2012 as regards compensation, the overall median salary increase across sectors remained 12 per cent with manufacturing and infrastructure and real estate sectors having reported highest increment figures for 2012-2013 at 15 per cent. Financial services sector had been most conservative in increment projection for 2012 – 2013 at 10 per cent.
With India, and thus major companies, riding on the uncertainty wave, I view chances of most companies holding fixed salaries with minimum increases and working on larger variable components. This component will rise from the present 16 per cent average.
2013 is likely to see most organisations driving performance through stricter KRAs and banking on sharper performance management systems which will throw accurate data. It will enable them to take the right people development decisions. A good PMS is essential for an organisation’s growth. Better the employee performance, greater are the chances for meeting margins and budgeted revenues.
In terms of leadership development, getting good ready-made leaders from the market will become difficult. Hence most companies will have to develop leaders from within. Performance management systems will have to be adhered to; perfect employee evaluations will have to fall in place so that the system throws up accurate scores. These scores will then have to be progressed into actual development programmes at each category and level. Those who fall under average to good performance will have to be put through refresher courses so that they move into the excellent performer category. Those in the excellent performance category will have to be put through a star programme which will clearly draw out their career progression plans and show them a growth chart. The CEOs of tomorrow will have to be developed from within; else retaining good employees will remain a distant dream.
With several mergers and acquisitions in the offing, the most prominent activity in 2013 for HR will be, firstly to be a part of the M&A team which does a thorough HR homework before acquisition, and organisational integration post acquisition. HR will play a crucial role in advising CEOs on whether the acquisition is worth the effort. Policy, structural and cultural integration will be crucial and HR will be in a position to lead from the front.
With the world embracing technology at a faster speed than expected, the leaning towards quantity of labour is shifting and the concentration is on quality of labour in the manufacturing units as well.
Technology will take the lead in HR in 2013. More processes will be automated, MIS getting sliced in 100 different ways to reach accurate people conclusions will become a reality. Talent management technology will be used extensively to help HR hire better, manage performance and build dynamic compensation structure.
Creativity and innovation in dealing with employees will be of prime importance when it comes to employee retention in 2013. Sectors like ITeS, pharmaceuticals, health care, FMCG will make retention a priority.
In terms of talent acquisition, the battle will continue in 2013 too. Creating your own talent pipeline will become the need of the hour.
Overall, 2013 will be a year with maximum usage of technology, dynamic compensation linked to company performance and a larger chunk of salaries as variable pay. Policy, culture and organisational integration will be the prime focus and creating leaders from within will be the norm.
