The days of being chased by head-hunters are now a thing of the past. In fact, those very employers who were recruiting aggressively even a few months back are now being forced to think of HR cost rationalisation and productivity enhancement of their existing staff members.
And amidst the pink slip paranoia that has gripped young professionals across sectors, India Inc has actually started going in for a new practice — outplacement. This marks a sea change in the outlook of corporate India, with companies now trying to ease out redundant executives by providing company-paid assistance in finding them new jobs.
While outplacement is a regular and normal practice across the world, the phenomenon has been gaining ground in India too. It can only be dated back to the beginning of 2008. But it is gathering momentum and is expected to accelerate even more in the coming months, especially with the change in dynamics that we are witnessing in multiple sectors.
Some of the troubled investment banks are looking at such outplacement deals with banks such as ANZ Bank, HSBC and IT major, Microsoft.
Indian companies have gone from a situation where there was an acute shortage of people with the right skills to the current one where many talented people are available and are often willing to join with pay cuts. Even six months ago, mediocre performers made it to dream jobs and a decent pay package. And now faced with the problem of plenty, employers are increasingly looking for a way to rid themselves of non-performers. One company have out placed around 700-800 people since January ‘08.
However the reason for this is not the lack of business but productivity enhancement. So far, it appears that only at the start up-level, it is generally the lack of business and a weak work pipeline that causes companies to explore outplacement as an option. Other reasons for outplacement include heavy influx of MNC companies in India and the increased amount of merger and acquisition activities.
HR honchos, however, fail to concur on the industry sectors and employee grades at which the outplacement is taking place. It is mostly the software engineers and team leads in the software sector and agents in the BPO companies who may be out placed. Many seem to deny that the trend has caught on at the executive level. Companies like Stanton Chase are not yet approached by firms for this service as they are primarily an executive level HR firm and outplacement is not happening at the executive level but is happening for sure in the industry.
However, there are also experts who believe that there is no particular trend in terms of industry segments and employee levels. It seems to be happening at all levels, the only difference being that at junior level, it takes the form of involuntary outplacement.
At the senior and middle level employees, it assumes a more voluntary nature. The senior and middle level executives otherwise remain in the organizations without being fruitfully used.
The phenomenon is taking place across sectors ranging from IT and telecom to retail. On the question of where the out placed employees are further placed. There are different tiers in all industry sectors. In case of under performers, they get placed in a lower tier level and talented employees find place in the peer group firms.
At present, the outplacement services in India seem to take the form of corporate social responsibility on the employer’s part. When firms approach a HR recruiting firm they provide counseling and career management sessions to the employees in question and help them put their career back on track. While the expenses of outplacement may have initially been a deterrent to increasing its popularity, the scene is fast changing. India is becoming an important part of the worldwide business for the major outplacement firms. The concept is increasingly emerging as a business model. In fact, this will be a billion dollar opportunity.