HR Dilemma

by Amit Tripathi    Jun 19, 2007

This time my point of discussion is far from being technology specific. But, this is an aspect that bothers CXOs to the hilt.

India is clocking a growth rate upwards of 9%, and industry experts believe the country might have hit the take-off stage in the economy. Recently, in his write up to, Bill Gates acknowledged that behind the growth story of India is its most formidable asset - its people. No business process can be effective if the people power does not back it. Be it BFSI, pharma, retail or government, all are dependent on the acumen of human resource.

Growth has its downsides as well. In a highly competitive environment growth might be relative, and may follow the cause and effect relationship. This essentially would mean that one s growth may be at the consequence of the other.

Today enterprises in all segments are reeling under acute attrition. Take for instance the IT industry. The current attrition rate hovers around 10-12% and the unofficial number is more than double that figure. CXOs complain poaching to be a major reason for this, whereby an employee is lured to join an organization in similar businesses in lieu of better perks and remuneration.

But where does this rot start?

Let us examine. A practice that is followed in most organizations today is bonus-based employee referral. On the face of it, this seems to be a good ploy to get workers coming in. The Human Resource (HR) division of enterprises take pride in flaunting that their employees stand to earn extra bucks as they bring in acquaintances on the payrolls of the company.

On the ground level the scene is different. These acquaintances are none other than the friends of employees working in a competitor organization. In fact, many HR heads of enterprises nudge even new employees to cull out more workforces from the organisation they have just left. Remember, this happens for all the business processes of an enterprise, and with all categories of employees that an organization maintains on its payrolls. For smaller companies, the buck stops at just getting in the employees. Interestingly, as employees come in through the above mentioned format, they go out too following the same format.

Are there companies that follow what does? Recognizing and rewarding employees for bringing in workers who proved effective, successful, and stayed on. Or how many companies follow the psychological profiling technique, as practised by McKinsey?

A question arises as to what happens to the role of the HR department then? Traditionally, this division had been entrusted with the job of sourcing, training, and retaining the most important asset of an organization; the workforce. As things stand today, the responsibility of bringing in employees has shifted to respective business heads of an enterprise.

Is there any solution in sight? Some of the major IT companies have recently reported to have entered into a mutual pact against poaching of employees. But, can this be done by all enterprises? Perhaps not.

Finally, can we say that an organization has to blame itself for its woes with respect to attrition? It s about time for some honest introspection.

Tags: HR Dilemma