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EMERGING TRENDS IN HUMAN RESOURCE MANAGEMENT A CHALLENGE TO THE ITES

Raunak Narayan*

ABSTRACT
Todays euphoric corporate environment has posed daunting challenges for human resource management. While demand for manpower is rising, supply is not able to keep pace. While wage bills are bloating, quality of manpower is deteriorating. And while, there is a surfeit of graduates, their employability is low, due to poor skills. This is just the ideal setting for the management to shed its decades of inhibition take centre stage and dictate strategy alongside other key functions such as finance, marketing and sales. Human resource management (HRM) is a process of bringing people and organizations together so that the goals of each other are met. Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Globalization of the world economy and several other trends are again triggering changes in how companies manage and utilize their human resources. The Indian Information Technology Enabled Services (ITes) industry has been one of the great success stories of modern India. An industry that did not exist two decades ago is now the bread and butter of the nation and the envy to the world. It has created international benchmark for quality, proving to the world and to ourselves that Indian companies can compete globally and win on quality. It has demonstrated what can be achieved by unleashing the power of middle class, first generation entrepreneurship in India. Hence, The ITes organizations which is working on the principle of attracting, managing, nurturing and retaining their employees is moving ahead with the competition and is having competitive advantage over other organizations. And to adopt this principle, now it has become very essential to face the challenges posed by the new trends of HR. It is this theme upon which this paper has been worked out.
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KeywordsHuman Resource Management, Information Technology Enabled Services (ITes), Competitive Advantage, Attrition, BPO

INTRODUCTION
In the life of any nation, company or individual, movement is life and stagnation is death. Therefore, as long as companies are growing, they are fully alive. Organizations must move continuously from one process to another, from one strategy to another, and from one structure to another. So long as we are renewing these kinds of things and re-looking at them, thats where growth and achievement comes in. Human Resource Management (HRM) has evolved considerably over the past century, and experiences a major transformation in form and function primarily within the past two decades. Driven by a number of significant internal and external environmental forces, HRM has progressed from a largely maintenance function, to what many scholars and practitioners today regard as the source of sustained competitive advantage for organizations operating in a global economy. Human Resource (HR) is the only function where building capabilities takes placebuilding capabilities of organization and individuals. And that is why HR will have to build organizations whether it is ITes or any other. Building, grooming/preparing people, building different kind of mindsets, defining roles and making them understand what kind of society and landscape is going to emerge, become extremely important. ITes is defined as outsourcing of processes that can be enabled with information technology and covers diverse areas like finance, HR, administration, health care, telecommunication, manufacturing, etc. Armed with technology and manpower, these services are provided from eenabled locations. ITes is a catchall term used for the myriad processes that ant bureaucratic entity undertakes in servicing its employees, vendors, customers. The Indian Ites industry has rapidly opened up, expanded, matured and with a wave of consolidation has scripted new initiatives.

*University of Calcutta
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With substantial evolution being witnessed, India has become the ideal and most preferred offshore destination. Numerous factors such as supply of skilled manpower, global standard telecom infrastructure, proactive and positive policy environment and friendly corporate tax policies have given India an edge in the global marketplace. In spite of offering distinct advantages such as cost competitiveness, highly skilled labor and a high level of service maturity, the industry witnessed certain unique challenges especially in the area of HR. Of myriad HR-related challenges faced by the industry, the critical ones are the attrition and scarcity of professionals equipped with necessary domain knowledge and communication skills. Despite being global phenomena, these challenges have become a matter of concern in Indian ITes industry. EMERGING TRENDS IN HR Over the years, highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. This calls for future skill mapping through proper HRM initiatives. Indian organizations are also witnessing a change in systems, management cultures and philosophy due to the global alignment of Indian organizations. Hence, it is necessary for the management to invest considerable time and amount, to learn the changing scenario of the HR in the 21st century. In order to survive the competition and be in the race, HR department should consciously update itself with the transformation in HR and be aware of the HR issues cropping up. With high attrition rates, poaching strategies of competitors, there is a huge shortage of skilled employees and hence, a companys HR activities play a vital role in combating this crisis. Suitable HR policies that would lead to the achievement of the organization as well as the individuals goals should be formulated. Some recent trends that are being observed are as follows: Traditional HR Practice Administrative Role Reactive Emerging HR practice Strategic Role Proactive

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Separate from Company Mission Production Focus Functional Organization People as expenses

Key part of Organizational Mission Service Focus Process based Organization People as key Investments/ Assets

To leapfrog ahead of competition in this world of uncertainty, organizations have introduced sixsigma practices. Six-sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. These practices improve organizational values and helps in creating defect free products or services at minimum costs. Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization With the increase of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore, organizations are required to work out a retention strategy for the existing skilled manpower. To have a competitive advantage over rivals, organizations are working on the principle of Attracting, Managing, Nurturing and Retaining their employees. Companies no more believe in the tall hierarchical structures, and cubical with closed doors of the boss, but have given way for flat organizational structures with more spans of control and less chain of command. In place of being the autocratic leader or manager, they play the role of team builders, mentors, coach, or counselors. Following the principles of retaining the brains in the organization, the policies have become more and more flexible providing alternative and flexible work schedule. Flexi time, compressed week, job sharing, etc Organizations today are not only making the structure and policies employee friendly rather they are trying to improve the quality of work life where
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employees can enjoy their working and will be able to manage the balance between work life and personal life. They provide them the in-house facility of health club, yoga, meditation, alternative work schedule, picnics, and family get together where they can reduce their stress and strains. They also provide educational and medical facility. Training and Development are the other areas where organizations are trying to take the lead over other organizations so that employees can be made multiskilled to handle multiple tasks. The new horizon has opened up where the organizations competing are clubbing together to form the network of talents. Other areas where remarkable changes are being made are in communication pattern. Gone are those days when employees feared talking to their bosses. Things are replaced by cross communication, gang plank mechanism, open door policy, internet, intranet, mentoring, counseling, coaching, etc. Communication is no more restricted to form top to bottom rather bottom to up is encouraged more in the organization to make functioning more smooth and to have grievance free, satisfied employees. With the continuous rise in competition, business cannot flourish if individualism is prevailing in the organization. Therefore, to meet the need of the time the growing organizations are following collectivism culture, where working in groups and teams are emphasized. Performance appraisal has also taken a new shape. It is not confined to the boss and subordinates, rather more emphasis is being given on overall appraisal of the employees (360 degree appraisal). Employees are also given opportunities for succession growth. The ITes industry, which is rapidly growing industry in India, is not an exclusive of the above stated emerging trends; moreover it is mainly the cause and effected industry for the changes in HRM. Hence, it is very essential to know the challenges posed by those merging HR trends to ITes industry.
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CHALLENGES OF EMERGING HR TRENDS TO ITES Attracting and Retaining Talent

The ITes industry has, during the last decade, been probably the most attractive sector to work in. It has therefore been able to get nest talent. The challenge now is to safeguard and build on this prime position. Attractive compensation, challenging assignments, good working conditions and growth opportunities are amongst the main determinants of where talent gravitates, along with the indefinable glamour value of a company. Taking care of these parameters is a necessary task for the ITes industry. High level of Attrition

While India does have a large talent pool, not all are industry ready or equipped with the necessary skill sets to become useful to the companies. This means there is plenty of supply at the entry level but huge gaps in the middle and senior management levels. This has resulted in increased levels of poaching and attrition cases. Presently, the average attrition rate faced by this industry is somewhere around 30-35 percent. Not a serious career option

Another very critical issue of concern for HR managers is that most students and professionals working in call centers do not see this industry as a long-term career option due to the inherent nature of the job (monotonous and lacking challenges), most of the time there is low interest in the work. Mismatch of Expectations

Expectations mismatch leads to higher attrition. This is partly due to the perceptions created in the general public with respect to the career growth, type of work, compensation offered, competition, etc. Many a times, people are not able to create a work-life balance and often opt out. The right positioning will help attract the right profile of associates , which will
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automatically manage their expectations from the industry and this will, in turn lead to lower attrition rates. Communication Issue

Lack of effective communication is another contentious issue. The absence of regular, two-way communication between agents, their team managers and the senior management is a common complaint in the industry. High training costs

On an average, the ITes companies incur three types of training costsvoice/ accent, soft skills and process training. For a start-up, in the initial stage the training costs will be high. It generally accounts for four months salary of employee hired, though the actual training would be probably being for just a month. Generating motivation and increasing efficiency

Generating motivation and increasing efficiency is far more difficult in situations where the job is repetitive and routine, as in many ITes operations. This is a real challenge to managers. This is important because a key part of Indias value proposition as the outsourcing destination is based on productivity and quality- factors that depend critically on motivation. Compensation

Compensation is probably the single most important parameter in most cases. The challenge here is to provide an attractive package in context of rising expectations, and yet minimize overall cost escalation. In this situation, poaching people from other companies by offering higher pay packages is self-defeating for the industry as a whole. An important correction lies in ensuring an ever-growing and sufficiently large supply pipeline for fresh entrants. The challenges of workplace diversity

The future success of any organization relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge faced of workplace diversity can be turned into a strategic organizational asset if an organization is able
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to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages, and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena, which must be one of the important organizational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors. Dearth of innovative and efficient HR professional

AIMA 2003 report projected that tourism and IT/ ITes would generate between 20- 72 million jobs by 2020. Most of this employment-generation is happening in people-intensive sectors. Thus, the need for a strong HR backbone arises. Even at a very conservative estimate we are looking at least 5 million new jobs in the next five years. And a quick calculation would show that even if we need one HR professional for 1000 employees, one needs at least 5000 new HR professionals Few Solutions Moving towards B class cities

Due to the high demand and supply gap and scaling attrition numbers, many companies are moving towards B class cities like Chandigarh, Bhopal, Lucknow and Dehradun, to attract talent and set up their operations. In Karnataka, the ITes companies are looking towards Mangalore, Hubli, and Mysore rather than concentrating only in Bangalore. Looking for career oriented employeesthere is also a change in employee profile, with organizations looking for older and experienced people who will bring in stability. The requirement is for those people for whom salary is not just a pocket money, but a career opportunity. The ideal employees for BPOs would be people from the middle and lower-middle income households, who are willing to work hard and have a strong sense of responsibility and dedication towards their employers. Initially, though it might lead to scaling training costs, as the section might lack in basic communication and soft skills. Proper rewarding A research report says that in todays scenario.
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70% of your employees are less motivated than they used to be 80% of your employees could perform significantly better if they wanted to 50% of your employees only put enough effort into their work to keep their job

One might be aware of Employee reward covers how people are rewarded on accordance with their value to an organization. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship. Educating about career opportunities

The common misconception is that there are only three position in ITes or BPOs-that of an agent, a team leader and the project leader. There is however more to it. According to Deepak Dhawan, VP (HR) of EXL Services, there is an immense opportunity for professionals with a CA or MBA background: An individual can choose from managing quality, get into training, Sex sigma process, problem solving equations, relationship management, HR and workflow activities or business development. Government initiatives

Nasscom has recently started a project with different private players training institutes and academia in Andhra Pradesh, Karnataka and Kerala, for preparing employable ITes workforce. According to A. Sundararajan, IT secretary of Kerala, It will help chart out indicative domainwise manpower requirement projections from the industry. Skill set standardization, Government recognized certification in ITes, and inclusion of ITes as a discipline in graduate studies by universities will help in making ITes as a career choice by students. Creating effectiveness and efficiency through motivation

Empowering, engaging and energizing employees are established ways of creating effectiveness and efficiency through motivation. Organizational structures, systems and procedures are facilitators of these, and companies need to focus greater attention on these aspects. Providing an excellent physical work environment
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The ITes industry has to provide an excellent physical work environment. It needs to continue to be a leader in providing these facilities, including food, fitness and sports facilities. While these add-ons are not inconsequential, work satisfaction through challenging, cutting-edge assignments, and substantial growth prospects are definitely major determinants for retention. Consider the employees as a resource

The statement people are our greatest asset, though a clich that is often heard in corporate boardrooms is, nevertheless, true in most industries. However, nowhere are human resources as critically important as in the ITes sector. Human resources are not only the drivers and principal value-creators of the output of this industry; they are also the intellectual capital or the infrastructure investment. HR managers should evolve with new roles

With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, change mentor within the organization. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within the organizations. Improving employability

Despite the large number of students graduating, it is common to hear companies complain about not finding suitable candidates. The updating of syllabi and ensuring relevant content would be useful. In addition, it would be worthwhile to include some basic IT courses for the Science, Mathematics, and Commerce and Economics students. This would enable graduates in these streams to be considered for employment in a number of ITes jobs.

CONCLUSION
To conclude, change is necessary to survive. Those who change with the change survive and those dont vanish. What is today may be obsolete tomorrow. It is necessary to upgrade and restructure every time to withstand and face the situations. HR policies of the ITes organization should also be changed with the time and new strategies, policies should come up to retain the
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talents in the organization to increase the success ratio in todays competitive global environment. HR managers have to manage all the challenges that they would face from recruiting employees, training them, and developing strategies for retaining them and building up an effective career management system for them. Just taking care of employees would not be enough; new HR initiatives should also focus on the quality needs, customer-orientation, productivity, stress, team work and leadership building. REFERENCES [1] Dr. Nagaraju Battu (2007), Human Resource Development [2] Dr. Pritam Singh- HR, The Taskmaster, Times of India daily Ascent, 24th November, 2010 [3] Prof. Anitha H.S. Succession Planning, Benchmarking for Infusing Competitive Culture among Indian PSUs and Commercial viability of PSUs, Deccan Herald, August 25,2009 [4] Mrs. Soumya K.R. (2010) Assessment of training need and evaluation of training effectiveness on employees of select ITes in Bangalore [5] Dr. Alvin Chan (2010), Challenges of HRM [6] Rituparna Banerjee (2010), Emerging trends on HRM [7] Punita Jasrotia Phukan (2009), Changing HR paradigm in the ITes sector [8] K.P. Kanchana (2009), Emerging trends in HR [9] Sanjeev Sharma, Retention Strategies in ITes-BPO industry [10] www.bpoindia.org

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