Startups & smaller firms have already started downsizing
After the mega hiring trend – never seen before Covid-19 and the enthusiasm that had returned to the industry — the last few months have seen rising inflation with recessionary trends round the corner. Thus, the pressure on overall business health has led to largescale layoffs announced by the global giants that have shaken up the entire world.
While the direct impact of these layoffs have been minimal so far as experienced by the arms of the global companies in India, startups and other smaller companies who do not have deep pockets or the ability to withstand the likely impact, have started shedding significant number of their employees already.
Whenever there is a recruitment freeze or costs being contained, it augurs well for Indian businesses as this is the opportunity for further outsourcing to Indian firms to keep their costs under check. This opens up the possibilities for more jobs. However, there would be a distinct difference in the expectations of customers and employers. Firms would have to focus on higher productivity, improvement of processes for enhanced efficiencies and innovation for reducing the workforce strength, including moving to locations which offer advantages of talent pool availability and lower retention costs. Employees and those entering into the workforce now would be expected to be flexible and open to learning new technologies.
The skyrocketing non-sustainable compensation packages would require to be revisited and corrected to realistic and sustainable levels. Customers would expect to maximise returns from the investments made in digital technologies instead of fresh investments in new technology domains or functional areas.
New models of hiring would emerge with the twin objectives of reducing cost of talent and skilling based on industry needs that would call for close co-operation between academic institutions and the employers. An interesting model is that of HCL Technologies which has been promoting the three-month professional practice term for which students from select Tier2/3 cities alone are eligible. Around Rs 1.5 lakh is charged for the programme and upon successful completion, they are offered the role of IT engineer with a starting salary of Rs 2.5 lakh per annum.
Another innovative programme of HCL is TechBee – which gets students started with full-time jobs right after completing Class XII. Candidates earn a Rs 10,000 stipend during internship and pursue their higher education with BITS Pilani or SASTRA University. And soon after graduation, they are confirmed on a compensation of Rs 1.7- 2.2 lakh per annum.
At the same time, initiatives like those of Delhi Skills and Entrepreneurship University would bring together skilling and internship in different firms in their under-graduation period. Now is the time for such innovative initiatives that would drive down the cost of talent.
Originally appeared in Financial Express