Now, virtual bench to avoid layoffs

Source: indiatimes.com
Their largest clients may be Americans, but some of India’s leading IT companies aren’t taking a leaf out of American firms when it comes to managing employees. Faced with a business slowdown, Kalpana Jaishankar, HR head at Mumbai-based Mastek, had to do something fast.

Every day, bench numbers were swelling but layoffs, what some of her US clients opted for, were not an option the management wanted to consider.

Ms Jaishankar’s dilemma is shared by many HR managers, whose focus has shifted from retaining employees to how not to lay them off and yet control costs. Wipro has implemented two programmes: one, where employees can opt to work for 10 days in a month and get 50% of their salary and two, where employees can take a 12-18 month sabbatical and get 25% of their salary. “We considered a number of options including tweaking the variable pay and salary cuts, but finally the leadership team came to the conclusion that this was the best option with the least amount of pain for the individual,” said Pratik Kumar, executive vice-president, HR, Wipro.

“It was not a Eureka moment... a lot of work went into designing and conceptualising the programme,” said Kumar, a hard-nosed Wipro veteran of 18 years. The business imperatives were compelling and employee costs had to be cut, with these programmes the company met the dual objective of retaining employees and cutting down costs.

Mastek, the first among the IT firms to come up with the concept of a virtual bench, arrived at the decision after a lot of brainstorming and planned the execution in great detail because of the sensitivity around it. Employees on the virtual bench would receive only a percentage of the salary and receive training on various technologies during that period. The identified employees could opt to be on the virtual bench or receive a severance pay and leave the company. An overwhelming 85% opted to stay.

“None of the impacted employees were embarrassed. It wasn’t that they were poor performers, this was a business issue and we wanted to make that clear. The communication was made simultaneously to all the 425-affected employees through a presentation, which also mentioned how they continued to be valuable resources. The presentation also detailed what kind of training they would receive. All the action was in writing - there was no ambiguity,” said Ms Jaishankar.

The presentation was accompanied by a letter containing the legal aspects and FAQs (frequently asked questions). The FAQ also mentioned mentors they could contact, and doctors and counsellors were close at hand in the office to handle emergencies. For Mastek, this was probably the most drastic measure, it had to take in its 27-year history.

On the day it was announced, the affected-employees had permission to leave early and access to systems was also not taken away immediately. In addition, for outstation candidates, the company undertook to foot the accommodation bill during the period.

Given that most of these companies are not making losses, was such a step needed at all? “We debated this but decided it was necessary to avoid any drastic steps in the future - like reducing the number of employees. The future is uncertain and there is a possibility the situation may not improve even in third or fourth quarter,” said Deependra Chumble, chief people officer, Hexaware Technologies. Hexaware has implemented a similar virtual bench programme for 250 of its employees as well as salary cuts for all senior and mid-level employees.

An industry observer summed up the approach of the IT firms thus, “HR managers are still grappling with how to deal with these challenges. This may not be the ideal situation, but it is a new and humane approach for tackling the slowdown.”