Article (October-2019)


Ironical to treat people as commodity in adversity

Dr. Viresh P Mathur

Designation : -   Sr. Vice President - Corporate HR

Organization : -  Balkrishna Industries Ltd., Mumbai


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How do you see the current economic slowdown, on a larger scale?

VP It's not a very heartening scene after the 2019 General Elections when a single party achieved resounding majority in the parliament. The masses and the business were very content hoping that the continuity factor in the governance of the country will bring in more growth and earnings to all. The impact of demonetization and GST introduction has been a debatable issue and the scars of both the actions were yet to settle down and we have the slowdown in the economy. Factually speaking demonetization seems to be one of the reasons for lower demands in consumption patterns. The temporary/contract workmen did not have much cash to spend which also impacted the demand for provisions and goods. There seems to be little hope that the economy will pick up any time before 2020 and that too with regular financial impetus by the government and business.

Is it restricted to India only because of localised circumstances or have reached to global level?

VP The problem has attained global prominence. The fall of a big international bank is one of the early signals of things to come. The overall sentiment is low. The political scenario in Asia and Europe is unstable. There is constant disturbance between US and China who are world leaders in production of goods and services. The social media and its driver companies are already under scanner for violating the individual's privacy. This has resulted into loss of confidence and has put a break on expansion plans of these companies. They already suffer from high manpower and high costs. There is a dip in demand from Europe due to environmental changes. The US being a big market is increasingly putting up lot of restrictions on trade with other countries. In India we have a dual problem to handle, low demand for goods and low demand in export markets due to cautious approach and over the board considerations to protect the bottom lines.

What are the factors that have triggered this downturn?

VP The factors for this downturn are economical, political, social and environmental. It seems that the fundamentals of economics have been compromised by adopting to impractical and motivated policies. The financial structures have weakened and the efforts of the governments to boost growth and revive consumer sentiments are yet to yield tangible results. In India the population is again a matter of concern; the infrastructure sector has a long way to go to provide basic amenities to the masses. There is shortage of skilled labour. It is acute for highly skilled operators/workmen. Due to this, import is a cheaper option. There has been too much experimentation which has caused instability in the economy. There are issues of underestimation and overestimation. There is little visibility of an integrated growth. Inclusiveness is missing and there seems to be a loss of touch with ground happenings.

How do you specify the relationship between economic downturn and job losses and how HR should address the challenge of job losses and maintain existing employees' morale?

VP The first causality of an economic downturn is the salaried class. It is so ironical that such a valuable asset is treated like a commodity. The employee cost is taken as a liability and it is axed without much thought. The managements are so ignorant that they cut on the contractual and temporary workmen whereas inefficient and obligatory appointed managers and senior managers enjoy their jobs without much value adding contribution to the organization. It's very difficult for HR to challenge the management decision to cut jobs. It has to follow the instructions without being given a chance to advocate for the people who would lose their livelihoods and would have no savings to depend upon for sustenance even for a short period. Looking at such kind of scenarios the employee morale is bound to take a hit and it is most likely that the talented people start looking out for options. An empowered HR can play an effective role to maintain the motivational levels by focussing on high value savings rather than cutting down petty costs which can be a laughable stock for any category of employee.

How HR should prepare well in advance for such massive job casualties?

VP HR needs to follow the basics of HRM in the organizational context. It should work on a well-structured manpower plan, clear job responsibilities and KRAs and placement of people in the right position considering the preceding factors. Recruitment should be as per plan and new positions should not be entertained. A restudy of job profiles should be done and staff members with comfortable and easy going job profiles should be loaded with additional responsibilities. Non value adding activities across the organization involving people and costs should be abolished without many deliberations. There is a class of people in all organizations who create an indispensable euphoria around them and their teams without any visible contribution to business. Such people should be dealt with a strong hand, of course with the blessings of the decision makers. These decision makers will have to listen to the passionate assessment of the HR and allow it to dislodge the non-productive bosses and their cronies.

Who do you think suffers the most during recession - employee or the employer?

VP It is both the employer and the employee who suffer during the recession. The employee is at risk of losing his livelihood or drop in his earnings. The employer suffers due to reduced volumes and drop in profitability. Secondly, the employer also slips down in his rankings and partially loses on commercial interests. However, the impact of recession is much more profound on an employee. Though we cannot call it a natural recession but a self-imposed recession (due to bad business policies), just imagine the plight of employees of Kingfisher and Jet Airways. More recently there are employees of jewellery companies, automobiles, confectionary and a large reputed telecom operator. It is difficult to fathom their agony and loss of livelihood including social status. There is a lot of talk which is going on about future work places which will be governed by AI and Automation eventually resulting into job recession. This is a far cry and going by Indian work culture an ethos we may not be able to go beyond 8% job losses due to this factor. However, there is a possibility that from full time jobs we may move towards freelance jobs.

What are the jobs and domains that are most susceptible to economic slowdown? Are there industries or roles which are recession proof, in some way or the other?

VP The lower to middle management employees in all sectors except a few are susceptible to this syndrome. The higher level teams are largely clever enough to safeguard themselves in all sectors. To my mind a very effective role will have to be played by the HR leadership to deal with the situation and to ensure that people do not lose jobs in a casual manner and the separation policies are fair and have a universal application across the organization. Factually the HR leadership must catch the signals early and work on communication strategy which is sensitive and uses the right medium and forums which allow/accept expression effectively without any biases. The rule of creating ownership and accountability will apply to the HR leadership in a challenging situation. The leadership at company level have to trust their people and avoid micro management and unnecessary controls. Ideally the transfer of ownership in such difficult times should shift to an individual level. The Pharma, Health, Entertainment and few other sectors providing basic services for a living may survive. Remaining other industries will have to tighten their belts and deal with the situation with a long term view.

Do you think that labour reforms have anything to do with enhancing job opportunities and why rolled out labour reforms are not able to improve business sentiment and help recovering industry from recession?

VP The labour reforms are very cosmetic and are in no way going to generate more job opportunities. The laws continue to be primitive and anarchic they hold back any new entrepreneurs to set up business. We have many stories to tell that how do the government agencies use these laws not for the good of the workmen but for other reasons. In fact too much restrictive, threatening and regulative frameworks would never encourage free flow of work and adoption of good practices which would lead to more jobs and happy workplaces. The Provident Fund Act is a classic example which denotes the erosion of social security for which the Act stands. In the recent past it has been amended multiple times and has been made a populist tool in the hand of the government. In few States there has been a motivated move to increase the Minimum Wages abnormally for political reasons without any considerations for the industry at large. The approach of the inspecting agencies has been dictatorial rather than genuine advisory. The Textile Industry, which largely depends on the skills of a particular category, is a true example where the labour laws have done much harm than any good.