The Hindu Business Line : ‘The best time to acquire talent’

Every threat should be turned into an opportunity. So, what better time than now to build a talent pool that will sustain companies through the recovery, says Guo Xin, APAC head, Human Capital, Mercer Consulting. This is the best time for companies to demonstrate their commitment to long-term growth. And as opposed to the go-go years, when HR was busy with headcount numbers, he advises companies to get their hiring act together and recruit previously inaccessible talent now.

How are companies across the APAC region managing human capital vis-À-vis the US/European countries?

The economic recession has hit the US and Europe harder than the rest of the world. We find that while the European and US companies are managing people (resources) very carefully through lay-offs, forced sabbaticals and four-day work weeks, we haven’t heard of many drastic measures being taken to reduce people cost in this region. Most often, we hear that salary hikes may be off for a year or a hiring freeze is in place and that no replacement hires are happening. Only in some export-oriented sectors have there been lay-offs.

Also, big businesses in the region are looking at managing human capital costs carefully. For example, in Korea, even though the economy has been hit badly and the currency has depreciated, the chaebols have resolved to avoid massive lay-offs. In Japan, laying off people is not considered a way to manage people. Australia is still growing, because it is linked more to Asia. As for China, it has sworn to keep the economy growing at eight per cent and India at five per cent. These are healthy growth numbers.

Can you compare the way in which India and China are reacting to the slowdown?

I do not see much difference in terms of how companies are dealing with this. Though India has been hit harder than China, there is nothing drastically different here. We are seeing a freeze on hiring and salary increases, some companies are resorting to a four-day week and the variable component is being increased. The situation is similar in India.

But both countries face a scarcity of talent though the economy is in a slowdown. Going forward, as the economies improve, more employers would make surgical moves in a more intelligent and manageable manner.

Have companies in the region been more prudent in manpower planning and rationalisation?

I don’t want to make that assertion. But the economic environment is not too bad here — that’s not really saying that they are managing their resources better. In India, similar to China, even though the economy may be in a slowdown, the nature of talent shortage has not changed. I will say this period is the true test of an employer’s commitment to the values it has set itself.

The good times are not a really true test. I have been talking to CEOs across the region and some smart leaders say that this is not really all that bad. In fact, this is the right time to acquire the talent they could not get earlier. I find that there’s a different kind of talent war and talent movement going on.

Also, some companies see this as an opportunity that they didn’t have in the go-go years. During the boom, they didn’t have the time to streamline management and organisations. Now’s the time to review productivity, organisation structure and efficiency and let performance be accounted for.

What is the role of consulting companies like yours during the slowdown?

When we say HR should be a business partner, we mean that they should collaborate with ambitious business calls. And see if resources are lined up to that strategy. Anyway, this is supposed to be HR’s primary function. In the past, many companies did not do that. We know that it is hard to get resources in the go-go environment and under those circumstances, planning did sound like a moot point. And some HR departments did not have the time, energy or experience to put together a hiring strategy. But now is the time to sit with business leaders and work through how HR can help support business strategy with adequate resources. We are working with SCOPE (Standing Conference of Public Enterprises) to put together performance management systems (PMS). The PSUs are sure that this can improve their businesses. In such cases, we can help with expertise.

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