The ongoing economic slump has given way to a lot of measures that organizations have adopted in order to curtail costs. Should organizations continue this practice and follow the cost effective systems and learning they had put in place during the recession once things get better?
The global meltdown has forced organizations to re-look at the way they conduct their business, leading to major restructuring across the organizations. Most of they organizations resorted to cost cutting measures by staff downsizing, postponing capital expenditure, reducing non-critical spending etc. But the smarter organizations have actually used this slowdown to their advantage. Smarter organizations have increased the value proposition to the customers by providing host of customized solutions based on their unique requirements. However, some of the cost cutting measures which enterprises have taken like staff downsizing and postponing capital expenditure might be counterproductive post the slow down.
Organizations are resorting to different types of cost cutting measures. These measures have led to reduced employee costs, reduced business/operational costs, reduced or deferred investment all direct or indirect. While cutting costs is inevitable when projections to influence top line are not working favorably and the only option to protect bottom line or to survive is to reduce expenditures; companies definitely have to keep in mind that growth is to be given continued or more focus during these days. In the course of fighting to survive, the growth opportunities cannot be forgone. Hence, those measures that saved costs but were acting against the interests of growth of business in new markets, geographies, domains need to be relaxed when the recession phase ceases. Also, those cost cutting measures that were related to travel curbs and other sales /marketing expenditures would have to be reversed since they directly influence the sales numbers, in a good economy.
The so called recession or slowdown has helped us introspect our business practices, avoid irrational salary offers to candidates in competing companies, cut out wasteful expenditure that were never required in the first place and make businesses overall more profitable for the long run.
HR systems need to be sturdy, robust and efficient as they form the frame work of any organization, making it even more important to be consistent and sustain the best practices. Currently, the priority is target improvement, which can result in funds for current and future effectively managing assets like people and systems reducing inefficiencies in HR and improve HR thereby meeting business demands.
Industry is still hiring:
Recession and fluctuations in the economy may impact the overall industry scenario, but health needs of individuals are non discretionary spends and hence do not see much of a downward movement.
Every company has its own unique way of tackling issues. At Lupin, they have always believed in using innovation as a tool to optimize costs and increase productivity across all levels. This is something they claim is a part of their culture and had been practicing for over two decades, long before the recession reared its ugly head.
While the industry is still growing at a healthy clip, they cannot insulate fully from what is happening in the world around. They are still upbeat albeit a bit cautious. While salaries will increase in the medium to long term, near term increase will be largely muted across the industry in the range of 5 to 10 percent.
The industry is still hiring but a bit cautiously. We are practicing targeted hiring based on definite growth plans both in the domestic and global markets. Hiring is still buoyant in manufacturing where capacities are being enhanced and in research.
Pharma has been very versatile in molding itself to the need of the hour. Building on the success already achieved, pharma is all set to be the next growth opportunity for India Inc, and globally all markets are eagerly watching this story.