Staying ahead in the race
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The challenge for human resource managers in the future lies in training manpower. By involving employees in the company and opting for business-driven strategies, companies can blend efficiency with equity.
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USING THE right human resource strategies to stay competitive in a technology-driven economy was the focus of the Employees Relations Conference, organised by the Council of Indian Employers recently. With people, capital and technology criss-crossing borders, narrowing comparative advantages of countries, the focus in the future will be on employees' productivity — a challenge for human resource managers, said Saroj J. Poddar, President of the All India Organisation of Employers and Chairman, Poddar Heritage Enterprise.
Training manpower
Connectivity through information technology and the emergence of knowledge-based industries have made India a centre for IT exports and a remote base for business process outsourcing (BPO).
One of the challenges for human resource managers in the future will lie in training manpower for the emerging economy, he predicted.
The IT and BPO industries that currently chip in 1.4 per cent of the GDP are poised to contribute more than 7 per cent to the national economy by 2008, he said, citing a study conducted by Pricewater House Coopers. "Competitiveness improves when productivity rises relative to costs," he said.
Mr. Poddar pointed out that cost-cutting alone cannot bring about long-term results.
Companies and countries which rely on low-cost input will inevitably be challenged by new competitors with lower costs or cheap technology.
Thus, an hourly rate of six dollars in the United States loses out to five dollars a day in the Philippines, which in turn loses out to two dollars a day for the same work in Indonesia.
The work then moves to Bangladesh where the cost of labour is less than one dollar a day and eventually to China where it costs 65 cents a day, observed C.S. Venkata Ratnam from Institute of Management Technology, Ghaziabad.
Rajen Mehrotra, Senior Specialist at the International Labour Organisation, pointed out that customers today are not only looking for price, but also for non-price factors, such as service.
Value addition works better than cost-cutting when it comes to improving competitiveness, said Prof. Venkata Ratnam.
"Cutting non-labour costs is a better strategy than cutting labour costs for the simple reason that non-labour does not resist," he pointed out.
By involving employees in the company, aligning the people with the business and opting for business driven HR strategies rather than emphasising individual-level outcomes, companies can blend efficiency with equity, he said.
Legal framework
Companies need to aspire to be `preferred employers' and create conditions that bring out the best in their employees.
"There is the case of a worker who feels he is cutting stones, a second who feels he is earning a livelihood and a third who feels she is building a temple. The best in people comes when everybody feels like the third employee," said Prof. Venkata Ratnam.
He predicted that organisations in the 21st century would consider employees a valuable resource, recognised and rewarded for their contributions, motivation and creativity.
However, the legal framework and reporting requirements stipulated by the government with regard to HR need to be simplified, he said.
"The second National Labour Commission has made a modest effort in this regard. But what was recommended by the Commission in its report in 2002 was not adequate."
He expressed concern about the government's proposal for reservation in the private sector. "Will it be statutory or voluntary?"
Besides, when reservations in government have not achieved the avowed objective of affirmative action, would they achieve the purpose in the private sector, he asked.
He pointed out that in North America the policy makers had taken steps to ensure that affirmative action did not dilute job requirements. "Other things being equal, disadvantaged groups are given preference," he said.
Akila Seetharaman
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