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Most companies have a human resource (HR) department, no matter what scale it maybe. Thus, whether it is a large company, small company or company that out sources it human resources functioning, the defined functions of human resource management (HRM) remains common. The primary functions are defined as follows: The HR department is required to: Establish Develop Maintain Communicate All personnel-related policies to the company, as well as: Represent Help Advice Consult With the staff of the company. Usually HR managers maintain a file for each employee, which is a compilation of the following data: An elaborate, titled folder containing relevant documents and data Personal employee details A manual that maybe handwritten or typed The employee work history card
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Employment track record within the company The salary and increments The appraisal forms Reports made by the seniors and colleagues Those in the HR profession regard the job highly challenging, as they have to handle diverse subjects at any one point of time. An interesting fact is that they rarely come across the same problem in an organization more than once. Also, HR executives are considered to be personifications of patience. Their voice over the phone will never display their anger or frustration, no matter what maybe the cause. The following are the varied job titles held by those in the HRM department of a company (please note that these are not arranged in accordance to hierarchy; all designations may not be a part of any one company, but will differ from company-tocompany as per their specific requirements): Manager Employment Manager Compensation Manager Benefits Manager - Personnel Relations (Personnel Coordinator) Manager - Information Systems Manager - Wage and Salary Analysis Manager - Training and Development Manager Payroll Manager - Executive Compensation
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Those who initially made excessive amounts of money may still find themselves jobless. Telecom companies significantly cut jobs, and employment rates in the industry have never fully been restored. Telecom companies also cut costs by outsourcing production to foreign countries. While this outsourcing has allowed some companies to continue operations, it left many with training for specific jobs they could no longer perform. However, other industries have since expanded and raised the GDP. So the recession is termed over even though many still feel its effects on a personal level. Terming a recession as over does not necessarily account for positive economic changes for the individual. For example, sometimes recession is evaluated in terms of the countrys jobless rate. When this is the case, and people find jobs, failure to evaluate changes in income can make the economy appear more productive than it actually is. A former telecom employee who now works at Wal-Mart may have a job, but this job is not equivalent to former work in compensation. So analysis of only one aspect of a recession should not be used to indicate economic recovery.
Open a newspaper, switch on to a news channel on TV, browse on the Internet and one of the main topics of concerned discussion these days seems to be the recession. Economics gurus, business pundits, vexed politicians; verbose journalists all are talking about it. Some say we are heading into a recession, while others propound that we are already in one. Yet, scratch a little below the surface, and you discover that none of them seem to be quite sure what exactly a recession is. The term seems to be quite hard to quantify. So, what is a recession, really? How is it different from depression? And, how does it affect ordinary people like you and me?
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Generally speaking, it is said that a recession is a less severe downturn in the economy, and it has a tendency of getting resolved faster. To some economists, a recession is an economic downturn that lasts for about 6 months to 1 years, while a depression can be defined as a sharp downturn lasting a number of years. To other economists, a recession occurs when 4,000,000 - 5,000,000 people are unemployed for a period of 618 months, whereas a depression occurs when 7,000,000 - 8,000,000 people are unemployed for a longer period of time lasting years. Recession, in fact, means different things to different people. For example, according to retailers, a recession means a fall in sales, although they do not agree whether it is a 5 percent or a 20 percent drop. To stockbrokers, it means a fall in the prices of stocks. For manufacturers, on the other hand, industrial production is the criterion. For ordinary people, it can either mean a significant increase in prices, known as inflation, or a decrease in prices, known as deflation. When there is a decrease in prices it means that people may have less money to spend or choose not to spend as much money, which leads to the lowering of the GDP. Whereas, when there is an increase in the prices it can result in a reduction of public as well as private spending, which again leads to the GDP decreasing.
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not likely that they had the ability to pay their bills according to the stipulated time, and that is what happened exactly. So, innumerable mortgages as well as other loans went into default, resulting in a number of companies belonging to the financial sector posting in enormous losses. Then, there was a sharp fall in many of the markets around the world because of the speculation about a full-blown recession in the US. Since the US is the largest economy, it has a significant impact on the markets of the world. However, soon magazines and newspapers began speculating that because of the corrective actions taken by government and commercial bodies, it was likely that the current recession would not be as severe as it was expected to be. Hence, although the bogie of recession, both in the US as well as globally, still is rearing its ugly head, the market and the government are trying hard to make it as pain-free as possible.
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economic driving cycles and there it is debated whether or not, in such economies, government intervention smoothes, exaggerates or creates it. A period of recession witnesses a stock market drop at the onset. Sometimes, nearly half of the stock market declines are recorded after the onset of the period. The period of economic recession can also be sensed via the unemployment rate and subsequent claims, a housing recession and the use of the indicator index. Possible solutions: There are a number of strategies that can be implemented to help an economy to move out of a recession. The strategy adopted and applied varies and depends on the type of economic system and analysis followed by the countrys policy makers. While some may advocate the deficit spending to initiate economic growth, others may adopt tax cuts and yet some other may prefer and recommend a non-intervention by the government in the market forces of the economy! There is no difference between the deficit spending and tax cut strategies and both increase the money within the economy. Economic recessions are believed to be caused by wide based increase in rates of interest or a loss of consumer confidence. Economists suggest that periods of recession are actually caused by specific events that impact certain industries. Factors that impact economic recessions: Periods of recessions have followed dramatic increases in the price of oil. The industries that depended on energy prices suffered a sharp decrease in business and subsequently, reduced output and staff. An economy-wide decline in demand and reduction in real is influenced greatly by the higher cost of oil imports and a stringent monetary policy. The influencing factors slow down overall demand, and lead to subsequent recessions. The economic recession is the outcome of the impact on the economy by drop in demand, role of aggregate forces and the allocative forces. Reversing the situation: Economists believe, backed by years of research, that paying attention to the forces that impact reallocation may actually help us to predict future recessions and upscale economy. The technology harnessed today and the survival post 1929-1930 has made it possible for economists to observe and make available solutions if and when such an unfortunate slow-down affects an economy.
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An economic crisis has a disproportionate impact on firms that trade with the country or zone and this triggers reallocation. The advent of the internet connectivity and the use of wireless technology to redefine communication and information and similar sources of favorable reallocation, could prevent an economic recession. The relative strength of the determining forces set the future course of the business cycle and hence, helps to evade the impending economic recession. The causes for economic recession are many, but the solutions available today are just as much. It is in a deeper understanding of the implications that we stand to keep the situation at bay.
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HRM Priorities and Recession Affected HR Processes by the Recession HRM Communication in Recession Main HR Recession Initiatives Recession and Employees Recession and Recruitment
o o o o
Change of the job vacancies in the recession Recruitment Freeze Recruitment Agencies in Recession The talents on the job market
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Generally, the HRM Function should cancel the processes and procedures with the highest costs and lowest impact on the organization. The HRM Function has to be very careful as cancellation of some policies can be very sensitive for employees. Those are the processes and procedures with the highest impact. The recession changes HRM Priorities. The HRM Function has to make a quick response to changed conditions by the cancellation of the least important procedures and policies, but the HRM Function has to change the HR Strategy to have a consistent approach during the whole recession period. The HRM Function has to adjust the HRM Priorities in the recession very sensitive way as the employees feel some security and consistency and that they can trust the organization and its success in the war with the recession. The HRM Function has to keep the role of the employee advocate and this should be reflected in the decision matrix as well. The recession is not a chance to change and cancel everything; the corporate culture should not be touched by the change of the HRM Priorities during the recession.
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organization can hire a new set of skills and competencies to strengthen the position of the organization on the market 2. Training The training are cancelled as it is a quick cost cut. The training can be later focused on more specialized training session and more internal training courses can be introduced. 3. Compensation and Benefits The department can be asked to bring a new compensation scheme, which will save the costs and motivate employees to be more proactive. 4. HR Front Office The HR Front Office have to be present at clients all the time as they will need a strong guidance and facilitation during the recession. The HR Processes are heavily affected by the recession, but the HRM Function has to take this as the opportunity to change and to bring new ideas on the scene. The recession is the best time to design a completely new approach of the organization to its human capital.
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The HRM Communication is one of the strongest tools for the retention of key groups of employees. The talents and key employees have to receive more information from the organization to keep their own security and their value for the organization. The organization needs to raise the level of the motivation and the honest communicate on is one of the best But tools the for HRM motivation.
Function has to act as the consultant to make sure, the employees are de-motivated and frustrated by the amount of messages and the details provided. The HRM Function has to provide the advice on the communication channels used as not all the messages should be sent via email. The HRM Function is the only function in the organization to have a general picture of the target groups and it can provide useful consultancy in the description of the target communication groups. The HRM Communication in Recession is about a clear description of the organizations position on the market, the economic outlook for the next period and about the strategic products and services, which will be the leading the growth in the era after the recession. The employees should know about these topics as they can prepare themselves.
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The HR Recession Initiatives have to be focused on the analysis of the current situation and the unlocking the potential for the future growth. The HR Recession Initiatives are not just about the cost cutting, the recession initiatives have to be focused in more areas:
Cost Cutting Key Groups of Employees Process Efficiency Honest Information for Employees Management Consulting
The HR Recession Initiatives have to be balanced well. The cost cutting is about the immediate activities to decrease the personnel expenses of the organization, but the HR Recession Initiatives have to be focused on the future as well. The employees are told to be the best capital of the organization and the HR Recession Initiatives cannot be focused on the full destroy of the human capital of the organization. The employees to be fired have to be selected carefully and the rest of employees have to sure about the future of the organization. The organization has to guarantee the future for the most important employees the key employees, high potentials and the managers. The HRM Function has to focus on the honest communication in the recession. The HRM Function has to inform the employees fairly about the bonuses, salaries and number of employees in the organization in advance as the employees can prepare themselves. The HRM Function has to have a good balance in the HR Recession Initiatives. The employees and managers have to feel the fairness and transparency in the initiatives as they can build the trust to the HRM Function.
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The organization has to change the focus of the recruitment and the recession is a good moment to focus on the recruitment process development and redesign. Content of Recruitment and Recession:
Change of the job vacancies in the recession Recruitment Freeze Recruitment Agencies in Recession The talents on the job market
The recession is about the focus on the strategic initiatives of the organization to make the income of the organization stable and growing in the future. The organization usually does not stop the whole recruitment (see Recruitment Freeze), but some new job openings can appear. The organization needs some additional skills.
The organization should ask the HRM Function to make a quick SWOT Analysis of the employees in the organization to have a clear view about the gaps in the skills and competencies. The organization has to fill the gaps with the new employees from the job market, who are creative, smart and ready to work hard to save the organization.
The HRM Function has to ask the top management for the approach through the crisis and it can decide then about the skills needed for the successful fight with the recession. A very small team usually designs the proposal for the solution and the skills can be easily recognized. The team is mixed from the existing employees and new hires and the HRM Function should recommend both.
The recruitment team has to be ready to find a completely different set of skills and competencies. The recession changes the focus of the organization and the new employees can help to secure the organization in the time of the recession.
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2. Recruitment Freeze The recruitment freeze is a common solution in the beginning of the recession. The organization is usually completely unprepared for the depth of the recession and the recruitment freeze is a quite usual solution. The recruitment freeze sounds as a good solution for the organization, but it brings a lot of the issues. The complete recruitment freeze can be a big danger for the smooth operation of the organization and the exceptions are needed. When the expectations start to occur, they spread widely and the recruitment works the same way as before, just on the basis of many exceptions. The recruitment freeze has to be done smartly just from the beginning. When the decision is about stopping all the recruitment activities, it can never work. The HRM Function has to be asked for the proposal or it has to offer the proposal. The business functions have to have the chance to keep their FTEs stable to deliver the business to the organization. The recruitment freeze has to be focused and managed smartly. The majority of managers have to feel comfortably and they need to trust to the HRM Function, the rules will be strictly applied to all the requests. The recruitment freeze is about the trust to the top management and the HRM Function, that they will be able to manage the expectations and the requests from the managers will be evaluated fairly. The recruitment freeze is a chance to make the organization slimmer, when the top management and the HRM Function make a good decision. The recruitment freeze is not about hard cost savings; it just makes the managers to look for the new job hires internally. 3. Recruitment Agencies in Recession The recruitment agencies are hardly attacked by the recession and it is a good moment to have a better relationship of your company with the recruitment agency. The recession pushes the recruitment agencies to offer better conditions and the quality of job candidates gets to the better level as well.
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The economic growth era is a time for the recruitment agencies; the recession is the time for the companies. The recruitment agencies are willing to re-negotiate the contracts to keep their customers and they are fighting for the job vacancies. The company can change the recruitment process, the fees paid to the recruitment agency, but the best option for the recession is to ask for more flexibility from the recruitment agency. The recruitment agency can be used as the weapon for the search of a good potential in other companies. As the recruitment agency wants to keep the business, they are able to find the best contacts in the competitors on the market and the organization can hire really good employees cheaply. The recession is a good opportunity to set a new relationship with the recruitment agency. The recruitment agency can put a lot of the effort to finding the best potential on the job market and your organization can grow much stronger in the recession.
4. The talents on the job market The recession is a good moment to hire the top potentials from the job market and other competitors. The HRM Function has to act quickly to hire the best class employees before their current employers take the action to protect them. The HR Recruiters should always ask the managers and key employees of the organization about the excellent people, they know on the job market. The HR Recruiters should have a list of the job candidates, who can be asked to join the organization. The talents are usually known in the industry and the recession can make them to be more sensitive to the job offers from the competitors. When the organization has a clear plan for the fight with the recession. The talents from the job market do increase the personnel expenses of the organization, but they can bring new sources of the revenue and they hugely increase the trust of the existing customers.
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The role of the HRM Function is in the quick reaction to the recession, making the proposal to the top management and having a good contact with the recruitment agencies to start the hiring process as soon as possible. The HRM Function has to co-operate closely with the top management, as the talents from the job market need to know the clear plan and clear expectations from them. The HRM Function cannot communicate the clear expectations itself, but it can co-operate with the middle management of the job positions, which can be created for the top talents from the job market. The HRM Function has to monitor the personnel expenses added to the payroll of the organization as the company does not exceed the agreed rules and the HRM Function has to co-operate closely with the recruitment agencies to get the best class employees from the job market. The recession is a tough time and the top talents from the job market will definitely help to win the battle on the market.
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The HRM Function has to be able to mobilize all the talents across the whole organization and the line management can be fully confused by such an activity. The top management can have a nice plan to use the top talents of the organization to have a new opportunity to win the war with the recession, but the line management likes to have the talents in their units to have the smooth operations certainty. The talents usually like the challenges and the recession is the challenge for them. The HRM Function has to find the plan to allow the top potentials to be freed from their current units and to propose a good plan to the line management to keep their satisfaction and buy-in. The talent management is usually set as the long-term activity of the HRM Function. The recession makes the whole talent management a lot quicker. The talents have to be set to new teams, they have to learn to co-operate quickly and they have to learn to make quick decisions. The talent management in the recession is about the quick assessment of the top talents of the organization and assigning them to the special tasks from the top management. The role of the line management has to be minimized as they have no chance to prefer their own task above the strategic tasks of the top management.
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The recession is very dangerous for the companies. During the times, when the business grows dramatically, the HRM Function introduces different policies, which are focused on spending money. The company was able to carry all the costs and the employees started to take the policies as the standard.
In time of the recession, the HRM Role is to make cost cuts and the HRM Function has to provide the list of the policies and the procedures to be cancelled or discontinued. The employees do not like it, but the company has to return to the healthy basis for the future growth.
The HRM Function has to be able to identify the top potential in the organization quickly as the company needs to make the cuts in the human capital of the organization. The HRM Function needs to provide the tools to managers to inform their key employees about the security, the company wants to offer to key employees.
The HRM Function is not a department to make employees happy, the role of HRM Function is also about the cuts in the costs of the organization and the HRM Functions role is about minimizing the damages to the organization.
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Accountants would readily point that labor is where cuts should immediately be made. As I pointed out earlier, this means streamlining the organization by laying-off employees. Usually, the non-permanent jobs or positions are the first to go. On an organizational competitiveness perspective, reduction of personnel is not necessarily the best or first option in cutting costs. Looking closely into the details of each business processes through an organizational assessment or audit will reveal that there are other areas where cost cutting measures can be made. The HRM should be the forefront in this activity being independent from operations. Besides, it has the competency to do such an audit.
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Its amazing that in some business process audits I conducted independently and in a team, reduction of personnel is at the bottom list of the recommendations. Improvement in processes, reduction of waste, recycling of materials, and quality monitoring rank almost always on the top recommendations. ii. Information Dissemination Keeping employees informed on a timely basis is probably the most important role that HRM can play. Employees need to know where the business is going and what the intentions of top management are. In a recession what is more at stake are the investments made and employees come second. However, when job security is threatened due to a financial crisis, employees deserve to be informed about the status of the business and their employments fate. With many already unemployed (some are regretfully unemployable), and the job opportunities narrowing or disappearing, employees must be informed ahead and warned of the possibilities of losing their jobs so that they can prepare emotionally and financially. Keeping communication channels open put the HRM at a very crucial role of bridging the gap that may widen when the inevitable retrenchment of employees have been decided, and which may tend to put management in a bad light, especially in unionized companies. iii. Providing or Coordinating Livelihood Skills Training Employees need to look beyond the comforts of their salaries and job securities. They also need to develop other skills that will help then earned a decent living other than their current employment. The HRM should have integrated in its yearly training curricula training on livelihood skill development. With these new skills, employees are better prepared to cope in cases of unemployment and may consider home or small businesses as income alternatives; besides, many small home businesses do not require huge investments.
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iv.
Counseling and Guidance A financial crisis that is global in nature has a psychological effect on the average employee.
Especially when the news of bigger and more established companies are laying-off employees and/or are closing shop, they are likely wary also of their own job security. HRM should provide guidance on how employees can cope in case of the inevitable happen. It should help affected employees to find possible alternatives in cases of mass lay-offs.
On the other hand the HRM Function has to find innovative solutions for the following topics: 1. Identifying the real key employees and to keep them in the organization 2. Identifying the real top potentials and to strengthen their development program The second two topics have to be done with the minimum additional costs and it is a really hard task to accomplish. The HRM Function has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HRM Function is not to cut the costs for the time being, but to make the organization stronger and ready for the future growth.
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role in the era of the economic growth and they play the role of the demotivator in the recession as they transfer the recession directly to the total cash of the individual employees.
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5. Communicate the company's position to the entire workforce by providing as much information as possible in a respectful and caring manner. People can deal with change if they know what is happening. It is possible that some key decision makers may wish to hold back significant information until all the facts are available. This is a major mistake. People will create their own version based on rumor and fantasy. Give as much correct, detailed, and timely information as possible. This will demonstrate the concern of senior management for employees. 6. Be prepared for individual and group concerns. People may need to be counseled and guided to focus on their work tasks if there is any hint that the company is having a hard time keeping business and being profitable. There is nothing wrong for an employee wanting to discuss concerns with management but the leaders need to be prepared to provide guidance without commitment for continued employment. It is important that managers stay in touch with high performers as well as other employees. A high performer who is left without sufficient management support because "good people don't need their hands held" might be a candidate for another company. They can feel neglected as managers spend more time dealing with the concerns of less competent employees. 7. Help maintain a calm atmosphere by role modeling an appearance of focus attention. This will be a model for other managers as well as employees. Counsel the managers not to display anger or other negative reactions in stressful situations. Managers must restrain any impulse to motivate by fear. Under stress they may tell employees that they could be the laid off if they do not comply with management demands. If those orders are perceived as being unreasonable the high performing employees will look elsewhere for work and the other employees will tend to "duck their heads" and try to keep out of sight. Fear corrupts organizations. 8. Review all HR policies, processes and procedures to ensure that they are purposeful and contribute directly to the success of the company. Improving HR methodologies in difficult economic times will demonstrate your team's commitment to the organization and be a model that other functions might follow. An organization can often save a lot more money by improving or eliminating out-of-date processes than by laying off (making redundant) employees.
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9. If the company has to lay-off staff ensures that there is no other opportunities for them in other functions or divisions of the organization. They may require only a short period of training and development to be competent in another field if they are acquiring new skills based on already established competency. For example, an experienced training specialist might be able to use group and individual influencing skills in sales and marketing. 10. Advise managers to deal with the situation as a process of managing change with the key techniques of: a. Working with a Strategic Plan b. Communicate, communicate; communicate c. dealing with the loss of the old more stable economy d. believing in a positive future and moving on
The recession is about the creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes and to develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. The HRM Innovation is easy in times of the business growth, but the recession is not good for big innovative HRM Initiatives. The HR Management has to focus on unpopular innovations during the recession as the role of HR during the recession is to save money to the organization. The senior management expects all the support functions to bring innovative ideas and solutions which will lead to stronger organization, when the next growth era comes. The point has to be focused by HR management during recession are as follows: To optimize the manpower strength. To take strategic initiatives to increase the productivity and efficiency of the entire organization. To work on compensation benefits.
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On the other hand the HR Management has to find some innovative solutions during the recession like, To identify the real key employees and to intact them in the organization To identify the real top potentials and to strengthen their development program
The HR Management has to have priorities in mind and the strategic impact of the HRM Innovations in the recession time. The role of the HR Management is not to minimize the costs for the time being, but to make the organization stronger and ready for the future growth.
The above steps will enable the employer to hold its team together during a recession, and will even make bond between all of you stronger. Employees should be motivated enough to stick to the employer during tough times and put in the extra effort required for the organization growth.
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Accordingly, many of the Indian tech/BPO services exporters looked harder beyond North America, which used to account for most of our services exports three years ago. They went to Europe, and Asia, and an adventurous few Indian companies even "came" to the India market. India is a tech services market dominated by IBM and HP, with very few Indian services majors - mainly Tata Consultancy Services (TCS) and Wipro - active in this market. Others, such as Infosys and Satyam, have a negligible presence in India. So here's the impact one sees of the dollar weakening in 2007, followed by the US financial services-led slump in 2008: a. Indian services exporters look harder beyond the US: to Europe, and Asia, including Japan b. They all work out an India market strategy, if they did not have one already c. Financial services drops from nearly 60-40 percent of our entire services exports d. Other areas like telecom and engineering services pick up rapidly e. Overall, there's increased diversification, across geography, sector and type of business Financial services have been the mainstay of Indian software and BPO services exports. This began to change a few years ago, with telecom and engineering services picking up. That process has now accelerated. Telecom is a huge growth market in Asia, and especially India and China. Has the slowdown hit Indian tech exporters? Of course, it has, though not dramatically. Here's what, and why: i. A very few large institutions have melted away. They were outsourcing to India, directly as well as through other US-based services majors who had delivery centers in India. This has of course meant some impact on business
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ii.
For some time now, new deals have slowed down, and turnaround time for signing contracts has increased
iii.
There is increasing pressure on companies to minimize their "bench" - or the currently idle employees. Recruitments thus slowed, and campus offers stayed pending
India is not de-linked from the world, and the financial meltdown has certainly impacted us. While some of the impact is real and direct - like foreign institutional investors pulling out funds, which they needed, back home and thus causing havoc with the rupee - a lot of it is wild overreaction. For instance, the day Infosys announced a great quarter and a 30 percent rise in net earnings, the Sensex saw one of its worst crashes ever. The market is not reacting to fundamentals, but is overreacting in panic. It is also reacting to rumors. Take ICICI Bank. Each day I bought ICICI stock, figuring it couldn't go any lower, it would drop 5 percent the next morning. Yet, Indian services vendors have an opportunity waiting. There are factors in their favor. The dollar has swung very hard in the other direction now. India's brand image and reputation of services expertise in a range of areas, beginning with financial services but now extending to telecom, engineering services and medicine and more is on the rise. And then there is this large untapped market - a long tail of companies and processes that do not outsource that may be forced to open up to reduce costs. An economic downturn is like a mild ice age, with the survival of the fittest. Take the airlines industry shakeout today: the fittest will survive. The outlook for IT and BPO services is a lot brighter than it is for the airlines, and brighter than it was post the dot.com bust. Even so, it will mean belt tightening, and more focus on efficiency. Just as the fuel crisis and cost is forcing us toward more efficient transport. The global financial meltdown will mean some tough times for its suppliers, but the fittest will survive - and emerge stronger. And many will find opportunity in the crisis.
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limits -- in a disciplined manner. Also, they invested only in highly rated corporate debts, observing prudent regulatory norms. Mr Puneet Nanda said that different asset mixes served different investor needs, and in all such cases optimal asset allocation was critical. "The Brinson study on investment by the US insurance industry in the past 100 years reveals that asset allocation was 91.50%, stock selection was 4.60%, market timing was 1.80% and others 2.10%," he said. Mr Nanda said that the insurance industry was a major source of domestic finance for investment in key sectors, as the country could not rely on the funds of FIIs, "which quickly moved in and also quickly moved out. Inflow of funds from external sources is too volatile to cater to the need of long term investments. Also more than 95% of such funds are retail." He said the insurance industry owned 6% of India's capital market and managed assets worth Rs.8,57,000 crore. It had emerged as the largest investor segment in the capital market in the past few years. "The net market inflow during FY 2008 was Rs.55,000 crore from the life insurance sector, Rs.53,403 crore from FIIs, and Rs.16,305 crore from the Mutual Funds. This only goes to show that the insurance industry is one of the most important financial intermediary for both the individual consumers and the national economy", Mr Puneet Nanda. Mr Vikram Kotak said that there were 21 life insurance companies with a capital of over Rs.16,235 crore in India in FY 2008. Despite some slowdown in growth under the impact of the global recession, he expected the Indian insurance industry would regain its growth momentum within a year. As India did not have a social security system for the general public, life insurance was of cardinal importance to provide them security. And there products such as ULIP, the insurancelinked equity, that provided both security and value growth to consumers. "In view of its popularity both in the urban and rural areas, the sale of ULIP has recorded 80% growth in FY 2008. ULIP has become most popular because it is among the most transparent retail financial investment avenue," Mr Vikram Kotak said.
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"Coming into your own", performing as a Leader to be really effective and successful by acting and making decisions independently to get results.
It's all about People, MetLife's key resource. MetLife will succeed because we are winning from within.
Functioning productively in teams towards a common purpose; realising the collective power of diverse work-groups.
Operating with an intense dedication to managing monetary resources for strong business results.
Continuously creating and introducing new and original ideas and ways of doing things.
WHY CHOOSE METLIFE? We take great pride in the financial solutions that we offer. But thats not all. Your requirements and comfort are always our priority. That is why our interactions are distinguished by our expertise, compassion and sensitivity. So when you consider MetLife, think of the
Sales representative who cares enough to provide need based advice to customers. Customer Service representative who understands that the people who call him require sensitivity, as well as prompt attention. Product specialists who anticipate changing demographics and financial needs with products that actually make a difference in peoples lives.
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MetLife is one of the worlds largest and most respected firms. Weve been helping people build financial freedom for nearly 140 years. For some, this means protection for their families. For others, it means wealth optimization or preservation. Combined with our innovation, this makes MetLife a truly formidable player in the Life Insurance industry.
Where we are going We at MetLife India are committed to continued growth. Well get there through the power of our relationships, by expanding our already wide array of innovative products and services, and by making the most of an enormously diverse and talented work-force to meet the challenges of an ever-changing marketplace. This means an array of career opportunities.
Where you want to be Work shouldnt be something you do just to make ends meet. It should provide satisfactionand an opportunity to make a difference. MetLifes responsiveness to the needs of both our clients and our employees is a direct result of one of our core Company values people count. To you, as a potential associate, it means providing a career wherein you can achieve both work and life significance.
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If you want to make the most of life... then MetLife is the place to build on your strengths and talents. We believe in bringing out the best in all our associates. That's why we foster an inclusive, supportive environment where everyone has the ability to make a difference. If you want to foster prosperity, protect families and enhance lives... At MetLife, it all about building financial freedom for our customers and associates. Through the wide breadth of products and services we offer, and the financial guarantees which only an insurer can provide, we help individuals manage the 'ifs' in life by enabling them to build a personal safety net for the future.
If you expect to be rewarded for performance..... At MetLife, performance management is a process for helping you maximize your contribution to the business and develop your potential. Our performance management links your teams goal, as well as your own, to those of the Company. Closely aligning pay with performance. It enables you to ensure accountability for business objectives and develop to your full potential.
If you desire to work with the brightest and most dynamic individuals in the business Every day MetLife embraces the diversity of life. The combination of various perspectives, experiences and backgrounds not only enhances our work environments, but also promotes our personal and professional growth. So if you want to find all this in one place then MetLife is the place to be. Who we are looking for? * People who are ready to challenge assumptions and use innovative thinking and produce solid results. * People who not only embrace change they effect change. * High performers who thrive in an environment that acknowledges their energy, creativity and diligence. If you are a team player who understands that partnering is essential to the success of the whole, then you are exactly the kind of talent we seek.
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It is the downturn in the global economy that they hope to get help from. In recessive times it is relatively cheaper to set-up businesses, costs like lower property rentals and skilled manpower are lower than at other times. This can help fuel their growth said Relan. Metlife works on the premise that a mere 20 per cent of the insurable population in India is covered by life insurance. Considering its population base of a billion, even a marginal increase in the insurable population represents a considerable market opportunity. Apart from that, India has one of the highest personal savings rates in the world. And as most of the other measures seem insipid for corporate across the board to raise their revenues, being bullish seems the last throw of dice which could trigger a revival.
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The recent reduction in the life insurance space is not too much of a concern yet. The industry will continue to grow at a high rate as the need for financial protection and long-term wealth creation will not change due to the external conditions, said MetLife International President William J Toppeta in an interview to ET. How do you perceive India as a market in the wake of the global recession? There is immense potential to be tapped in India. The life insurance sector is relatively new and under-penetrated. It constitutes around 4% of the total GDP when compared to other Asian countries, where the life insurance penetration is around 8-10% of the GDP. India is a young country where more than 50% of the population is between 20 and 60 years of age. Insurance in India is perceived more as an investment tool and people are opting to buy insurance products for the purpose of long-term investments. The norms on how FDI is calculated have been changed. What is your take on the regulatory hurdles in India? I havent followed the latest announcement in terms of the FDI policy, so I really cant comment on it. But we do face problems of capital infusion because of regulatory hurdles in both India and China.
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The life insurance sector has declined by over 2% this fiscal. Is that a cause for concern for you as India is grossly under penetrated in terms of life insurance? Not at all. The long-term growth story is very much intact in India. As I mentioned earlier, insurance products are perceived as long-term investment tools in India and people will continue to buy irrespective of the financial crisis. The reasons for taking out life insurance for the purposes of marriage, retirement and child education will not change due to adverse economic condition. The negative growth this fiscal is more like a blip. If you have tracked the life insurance sector in India so far, you will realise that it has immense growth potential. Last year, the industry witnessed almost 100% growth. What is your total asset size? Do you think there is any need to modify the rules regarding the calculation of mark-to-market (MTM) losses? We have an investment portfolio of around $300 billion worldwide and in India it is almost Rs 2,500 crore. We manage a broad range of asset class including public and private bonds, real estate and agricultural mortgages and bonds backed by consumer loans. As to mark-to-market rules, I dont think I can comment on it. We have established our presence in several countries and have complied with all the rules. Coming to funds, how much do you deploy in infrastructure globally? We invest enough in infrastructure projects but it varies from country to country depending on regulations. You will find Metlife doing a lot to develop infrastructure projects such as highways and ports. Many financial institutions like banks are not much into long-term financing because of the nature of their business. We propose to fill that gap. Do you think the volatility in the stock market in the past year has affected the demand for ULIP products? We are inherently a conservative company and invest very little in equity. Our total equity holding is less than 7% of our portfolio. We adopt different business models for different countries. Its all about complying with the regulations and tax rules. I remember a time, not too long ago, when the general account was worth $300 billion, while a separate account comprising ULIP and other
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schemes was in the range of $100-150 billion. In the months to come, ULIPs will continue to be the preferred investment channel for investors. What is your outlook on the global slowdown and going forward what are your investment plans? We always plan in advance before taking things forward. In my view, the global situation may take about 12 months to revive. Given the current global market sentiment, insurance is one sector continuing with its recruitment exercise Thats true. With the growing awareness about the need for insurance in India, the demand for agents and professionals has increased significantly during the last three years. The industry will continue to recruit in hundreds in the next few months. This is one of the sectors that has witnessed a good growth rate even in the crisis situation.
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The loss actually is for millions of people around the world who work hard to build companies, projects and homes. They are the ones directly affected by job losses and shrinking salaries. However, these people in distress find themselves alone with no bailout package for them. Their children find it difficult to pay their school fees and their homes do not get adequate food. In fact, it is the working class that is paying for the sins of the rich. There cannot be any sympathy for the rich. For, they are still living in the same style as they did two years ago. It is a misfortune for millions of laborers, particularly Indians, who had moved to other countries for jobs and are now returning home. They were sending remittances to support their families and now find themselves an additional liability to the families. It is, of course, a loss to the national economy, which is losing remittances that cushioned foreign exchange reserves, but the social impact of such reverse migration is more threatening. Can anyone imagine the plight of parents, who gave them proper education; clothing, food and shelter, and have now abruptly lost their jobs? Their dreams lie shattered right in front of them. To conclude, possibly, this jolt of the economic meltdown was not only expected, but also needed in order to restore a semblance of sanity among those who were managing the fiscal and monetary system. A deregulated environment cannot ensure the welfare of the people on a longterm basis. It was a short-term Diwali for many people, and they abused Lakshmi (goddess of wealth) by disdaining her value. One hopes the darkness of recession, whenever it lifts, will bring with it a better environment for doing legitimate business and seriously offer better employment opportunities to the middle class on a long-term basis. However, the current situation cannot pass without leaving some lessons for the society to learn. The impact of this recession, I believe, is certainly greater than that of the Great Depression of 1929. The world today is electronically connected and the economies are inter-dependent. Hence, the pain of job losses is being felt across the world, and the social security available in a few countries is hardly enough to help the young and jobless. One hopes that the people will learn some lessons such as showing respect to money and living in a manner that is not about making a statement and giving a complex to others, but based on values and decorum. Hopefully, old values and family culture will guide the next generation.
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one billion do not have access to clean water. Basic sanitation facilities are absent for around 2.4 billion people. Around 5 million children worldwide die from starvation. Life expectancy of the African populace is around 35 years less than their US counterparts. As per data released by UNICEF around 10 million children who were less than 5 years of age died worldwide in 2006. Of them around 4 million were infants. To sum up, the challenges before the global economy are by no means simple. Timely intervention in the form of appropriate policies and fiscal help from the world bodies are needed to tide over the crisis. No less important is the political will needed for the seamless implementation of the policies.
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Conclusion
An organization greatly depends on its capital and the human resource is truly an essential part of the process. With global recession trends, cost cuts will be effected with job slashes and also curtailing employee salary. This forms a part of strategic planning that encompasses human resource sector. Each employee is a cost centre to the organization and training the employee is an apt requirement for boosting his performance. Human resource is about relations, maintaining the relations and conflict management. When it comes to manpower rules will be necessary. One has to strictly go in accordance with the rules and violation in the slightest variety will result in discordance. Strategic planning involves looking into future needs that the management has to visualize and anticipate. Business expansion, cost centre location, skilled employees, training programs all have to fall in line in the broad concept of strategic planning. Planning in human resource contains qualitative aspects but most of the themes should be around statistical data. Survival in a competitive environment is about having in edge. Retaining the employee and allowing multi tasking is necessary to maintain the head count in each section. Targets in performance have to pre determined based on authentic research of potential capacity, geographical viability and ad hoc absenteeism. Outsourcing in another major plan about strategic human resourcing. This is definitely a cost cutting procedure though one has to formulate a strict quality maintenance contract with the outsourced company. Environmental changes effect business in a big way. With recession trends, the low cost and less supply will definitely hit all factors of life. Economy downswing is a realistic method and each organization must plan for it in advance. Profits and performance is linked. The employees also look forward to intangible morale boosting perks that are constantly a pressure to management. When interest conflicts emerge, there is a contradiction to ones expectation and then retaining the talented employee becomes a cause of concern. The age of pink slips and down trend in the job market is not a very encouraging situation and management must insulate the process with strategies and reliable policies.
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