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Mounting attrition costs and talent crunch – two reasons, and enough to get the HR wheels rolling in any organisation today
Hemanshoe Arora, earned the nickname ‘He Man’ and this has stuck onto him all his life. It was another thing that he was oblivious to the reason behind the same... However, today it seems different – we’re referring to his nickname – for he actually feels like he’s earned it well considering his professional life. And just like He-Man would shout, he surely feels that he has the power.
“Power?” You ask? Yes, indeed. It’s the power that you get from being treated as an extremely scare resource by his company, by making him feel powerful as a competent and a value-adding entity. Precisely so; for Hemanshoe has all the reasons to feel on top of the world... Controlling attrition and retaining their best talents, today, organisations today have pulled up their socks, to save the outflux of precious talent from their offices and plants and yes of course, vying to get chosen as the top ‘Employer of Choice’. And there is some good reason attached to winning the crown as Malini Deekshit, VP – HR (India & Mauritius), HTMT Global Solutions divulges, “An employer of choice goes beyond prospective employees. It creates a positive disposition of influencers who may be clients, stake holders, suppliers and partners. Hence the spin-off effects can be far reaching. A title like this adds to the brand value too.”
One cannot also deny that these are testing times and talent crunch is an element necessarily found in the business air around us. Also with opportunities aplenty and with compensations getting fatter each hour, every organisation wants to avoid that feeling of discontentment amongst its employees. Another phenomenon that is getting the HR think tank work-up innovative initiatives for their employees is the mounting cost of attrition which as per People First Solutions Ltd., “On average, costs companies 18 months’ salary for each manager or professional who leaves, and 6 months’ pay for each hourly employee who leaves.” More shockingly, the report titled The Hidden Cost of Attrition showed how attrition (in other words, failing to retain your best people) can cause a company to lose up to 40% of its profits – some pinch for the company’s bottom line! The situation gets more baffling with a visible parameter like pay dissatisfaction being ranked 7th on the list of reasons why employees leave as per Accenture. The other factors triggering the negative reaction being ‘lack of opportunities’, ‘ill-growth’ et al. So talent management has definitely become a tougher ball-game to play.
However, it is not just the dearth of talented people and a pocketful that the companies have to spend on filling vacant positions that makes living a challenge for the HR department; what about revenue growth and market share? Surely, controlling internal factors while battling external competitors is growing into a bigger challenge for capitalistic entities.
But the companies seem to have found a solution here too. Recall the HCL or the Citibank TV commercial where the employee himself does the talking on the company’s behalf. In fact Citibank’s ad shows the dedicated employee giving the best possible solution to his customers, even while off-work (like on his morning jog et al).
So do you think the companies are doing a bit too much here? Surely with so much at stake, they are doing just what’s required. Differentiation even in terms of HR practices help them get closer to being the best in league. Talking to 4Ps B&M, Ajay Kaul, CEO, Domino’s Pizza India Ltd. (that features in the Top 20 of Hewitt’s best Employers in Asia 2007 list) asserts, “By making your organisation a great place to work in, work efficiency improves as well...” Kaul further explained how Domino’s takes up initiatives like celebrating the birthday of employees to treating all employees with equal dignity; all to ensure that their employees are satisfied.
Arvind Agarwal, Group President, RPG enterprise, on the other hand feels that attention to employees’ career development is more crucial for maintaining levels of satisfaction. He remarked, “Career development too plays a crucial role in making any organisation an employer of choice and that is what RPG believes in...” Then there is Arun Kumar, VP, Godfrey Phllips India (GPI), who stresses on training as he says, “T&D is taken up as the priority issue here and as a matter of fact carried out at three different levels.” GPI also considers the mentor-mentoree relationship vital.
From scanning management groups to travelling across the world, companies are trying everything they can to emerge as a winners. And today, times have become so testing that simply pay and other hygiene factors no more solely decide a company’s human capital base as Ashok Ramachandra, Senior VP-HR, Tata AIG Life Insurance voices, “In an industry where people are getting 100% hike on switching jobs, only good HR practices can help (companies) retain talent in both the short and long run.”
LG on the other hand holds a belief that employee welfare coupled with performance oriented culture helps them in keeping a check on their attrition figures. Yasho V. Verma, Director HR and MS, LG adds, “Performance at LG is something that is sacrosanct. The rest is taken care by the company.” LG spends as much as Rs. 90 per day on each employee’s meals alone, small thing really, but that is just one thing that LG takes care in terms of hygiene factors; the rest includes sending employees along with families to attend training sessions. Surely, many roads to the same destination as you may have figured out. With the employees on centre stage, the role for HR officials is getting tougher for the day. ‘No compromise’ in efforts to have the best human capital is the key to it all!
4Ps edit bureau, with inputs from Surbhi Chawla
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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common between Subrata Roy, L.N. Mittal, Laloo Prasad Yadav and Sant Chatwal? They organised weddings for their children in a manner which left the world gasping! Not just business tycoons, even ordinary folk today want the moon for the wedding of their young ones. Right from the wedding card to the ‘thank you card’ everything is done in a lavish manner – opening the doors for many business activities.
Indian wedding today is turning into a big industry. It’s currently estimated at Rs.50000 crore, and is all set to grow by approximately 25% annually. If you are a creative entrepreneur, this is one industry which is very lucrative to work in. The customer is in a spending mood. You could charge a ridiculously large amount – if you have something unique to offer. The wedding ceremony is one day when no one is bothered about ‘return on investments’. According to some, it is the only ‘recession-free’ industry in India, spawning a gamut of new businesses and new entrepreneurs. In fact, almost every industry is today looking at weddings to give a boost to their business. Be it hotels, tent wallahs, dress designers or caterers, every one is doing their best and growing and gaining from the ubiquitous wedding. Considering the fact that around 1 crore couples get married every year, there is a huge demand for all marriage related services, and a huge opportunity for one to churn out a great career. Let’s look at how so many varied businesses are booming as we go about tying the nuptial knot.
it’s no more astrologers or priests or your aunty in Canada who are fixing up marriages. A lot is happening on matrimonial websites. Today matrimonial websites have become the best way to find that perfect match. Shaadi.com has 7 million members and gets 8 million page views a day. No wonder advertisers are flocking in to promote their goods on these sites. The users of these sites are highly focused – their specific purpose is to start a family and they are looking for information that will help them do it. Maruti Alto, IFB, LG and ORRA jewellery found how profitable it was advertising and promoting their goods on these websites. Not just Indians one can reach out to a large chunk of NRI’s through these sites (since around 30% of the users are NRI’s). So, in effect, it is profitable to start a matrimonial website and also to advertise on it!
of a thousand miles must begin with a single step,” said Lao Tzu many years back. If I may be allowed to re-word it, I’d say a journey of a thousand miles sometimes begins with a single advertisement! An exciting photograph, a catchy by-line, or maybe exciting folklore sometimes, is enough to make you want to visit a particular place. We all dream of far-off places which we want to visit, and if we come across a photograph or a write-up that matches our dream, the chances of going there are increased.
who see an ad are twice as likely to visit the state website and twice as likely to call the toll-free number and request information. Kerala, with its sustained advertising, saw a 30% increase in traffic to the South. About 40% of the total tourists, that India gets, head straight to Goa or Kerala.
poured you a beer and we’ve had the camels shampooed, we’ve saved you a spot on the beach. We’ve even got the sharks out of the pool. So where the bawly hell are you.” What if a beautiful bikini-clad blonde were to invite you like this. It would be irresistible. So it’s proving to be for many as they are packing their bags and rushing to Australia. This was an ad campaign for promoting tourism in Australia and bookings have already started, and they are being flooded with phone enquiries. This new campaign, which would run for over two-and-a-half years, would cost the Australian government $180 million, but it’s worth it, for it’s a $73 billion industry.
when Jamaica was a little known country, Doyle Dane Bernbach created a campaign for it. It went like this, “In Jamaica, we treat our country as though it were one enormous living room. Be our guest.” The ad showed two men sitting on beach chairs, with sea waves lapping at their feet, playing chess. It was a classic, when it came to travel advertising. People came to see this beautiful and hospitable country. Today, Jamaica has found a new way to attract visitors. You get a once-in-a-lifetime experience to swim with dolphins at the Dolphin Cove.
many would consider Israel as their idea of a fun-filled holiday. Everyone has a certain not-so-happy perception of Israel. This is exactly what the ad agency targetted, promoting Israel as a fun-filled tourist destination. The 30-second commercial, which appeared on TV in New York, Florida and Los Angeles, showed scenes, touristic images and activities that people did not normally relate to with Israel. The ad ended with a punch line – “Israel. Who knew?” After these ads, people suddenly realised that this was not a place where bullets whizzed over your head as you walked down the streets. It was very much a regular town. Tourism from the United States increased by 31%. Not surprisingly that this year, they are planning to increase their advertising budget to $150 million. Everyone knows Israel is a Holy Land, but not many know it’s a happening land too. Israel has learnt – it pays to advertise, and damn well!
Rico, everyone believed was dirty, ugly and squalid, till David Ogilvy drew up an advertisement for them. People suddenly realised that it was not a dirty, poor island, but a beautiful holiday destination. Ogilvy’s ad, “Girl by a gate-in old San Juan,” was a master piece. It changed the fortunes of the country as visitors flocked in droves to enjoy the pleasures of this destination.
Japan and you think of two things – the Sumo wrestler and the Geisha. Japan’s major chunk of tourists belonged to the over-50 age group, who were interested in seeing its temples, gardens and Mt. Fuji. The Japan National Tourist Organisation wanted people to change their opinions about Japan being nothing but full of generations old traditions. They wanted people to know that Tokyo was throbbing and pulsating with excitement, much like New York, Paris and London. The ads were titled, “Cool Japan – Fusion with Tradition.” They showed how you could see the Geisha along with the latest modern fashion, the Sumo wrestlers and Buddhist retreats, along with their latest high-tech gadgets, neon lights and manga art. All this at an economical price of £689 for six days. What more can a tourist ask for? So much of fun and variety – all at a reasonable price. Japan should open its gates wide, for tourists are bound to come, and that too, in very large numbers.
advertisements play a major role in building an image of a country. They can convince you that thousands of miles away is a destination that has everything you are looking for. Tourism ads work like invitation cards to a happening party. We all need a break, and ads give a small preview of the pleasures to be found on the promised land. So, after the deadly Tsunami struck the tourist town of Bali, tourism fell pathetically low. Bali was particularly worried about the fact that Australians were not coming back. They were too scared to return, while the rest of the world had already started to flock back. Only intelligent advertising could help build back the faith. Nothing relaxes you more than a good laugh and that is exactly what the advertising campaigns did. The ad said, “Aussie...look what you’re missing,” and went on to show how the rest of the world was enjoying Bali, and asked Aussies, “Where the Bali hell are you?” The concept clicked and people saw that Bali was back to normal and they could return to it. Depending on place, the ads lure people to pack their bags & sit on a plane, heading straight to your country. The ads show how vibrant & exciting the country is, how everyone is having a good time... Guys, where the “Bali hell” are you?!
than three decades ago, the Vietnam War ended and US troops went home. Yet, ‘Nam still haunts the psyche of many Americans. After all, the US had done then to Vietnam, exactly what it did to Iraq a few years ago. Even today, the grey images of the Vietnam War are fresh in people’s minds. Images of a girl running in terror, her body scorched by napalm; images of people fighting to board a helicopter, as it took off from the roof of the US embassy; images of a nation destroyed and devastated by the US of A. Yet, a few months ago, when George Bush arrived in Hanoi for a trade summit, he saw a country that was booming. Most interestingly, today, America has become Vietnam’s biggest trading partner.
Vietnam saga sounds great, China perhaps would be nothing short of brilliant. Take a look at a few numbers and statistics and then decide for yourself. Between 1979 and 1997, China’s GDP grew by 9.8% annually, about three times greater than the world average. Some 170 million people were lifted out of poverty. Even the United Nations had to admit that never in the history of the world have so many people made such economic progress in a single generation.
China is booming. China’s GDP rose from $150 billion in 1978 to more than $1.6 trillion in 2004. And to say China’s exports are booming, is a very huge understatement.Deng Xiaoping had said, “To get rich is glorious;” and China has shown this to the world. The ideological debate of whether capitalism or socialism is better has come to a conclusion. You see China and you realise that communism is not only relevant, but potentially the key to deciding the shape of the country’s future
seems to be yet another socialist who minces no words when it comes to expressing his feelings about USA. It’s the Venezuelan President Hugo Chavéz (above top). He is totally anti-capitalist and knows that the only way to reach promised objectives of a better life and the end of exploitation is through a socialist form of government. Not surprising that 82% of Venezuelans think Chavéz is doing a good job. Come to think of it, it’s more than twice the approval rating by Americans of Bush. Chavéz has used Venezuela’s oil profits to lift the poor out of poverty. Bush used oil to destroy a whole nation and kill its leader (Saddam). The poor love Chavéz, for they see their lives improving under him. Is he the next Fidel Castro? Perhaps, but he is surely a hero. Cheers once again to his leadership – for Venezuela is today the fastest growing economy in the hemisphere
is not a dinner party,” wrote Mao Tse-tung when he was a young Communist leader. It required grit, determination, and most of all, compassion towards the poor. Only then can a nation truly progress and become a force to reckon with. Socialism is a very young system. Capitalism could not achieve what socialism has done to Latin America or Asia. Socialism has shown what it can do. Look at USSR and Cuba. It’s probably worth putting our faith in the system and giving it a chance