Thursday, November 13, 2008

Countering turbulent times..

At this turbulent times it requires ancollaborative effort-both by the top management and employees to surpasse this time.
slump, downturn,pink slips and layoffs would perhaps would be the most talked words in the recent time and as the year comes to end i am hope full they would top the charts.

It is for sure that organizations need to pull their socks and gear up to face it.
I honestly feel-Layoff is not the only measure to deal with this sistuation.
Depending upon the industry you are in and the business you are in the employee cost -including the salary and other cost would be between 3 to 20 % of the over all cost of operations.
hence re trenching and layoffs would not be the sole remedy- what would you do with out your employees the most valuable assets?
for manufacturing companies which has employee cost being 3 % of the over all cost lay offs and giving pink slips is not going to effect even to a minuscle.
For them better inventory management,planning and forecasting is the areas to be looked upon.
similarly for IT companies which on the contrary have the employee cost being around 20% of the over all cost methods for improving employee productivity and efficiency should be adopted…and pink slips should be the last thing to resort.
pls remeber that IT companies would have work force which might be a inflated due to provisions for bench work force-in anticipation of getting new projects and deploying them to those projects.Hence in the current scenario where chances getting new projects are bleak ,re deployement and efficient utilization of work force is the need of the hour.

Niraj Pradhan
Product Evangelist| MinVesta Infotech Ltd. |Mob:+91 9246190827 | Ph: +91 40 23738072 Extn:201||email: | website: |
Blog:| |Blog:|

Thursday, November 6, 2008

My thoughts on -Scope of HR Products in current market downturn

These days we keep hearing the words " SLUMP" ,"Recession", "Layoffs", "Cost cutting", "IT industry down turn" etc...

All these are also the reasons sighted for slower growth of Indian IT companies.
It is said that there will be lesser new projects coming to the IT companies in India-All due the the recession in US economy.
The companies in US have become conservative and there is literally no scope for getting revenues from these markets.
Recently even wipro has shifted its focus to Latin America and Africa -as these are now the emerging market.

Amidst all these..I have seen a reverse process- The need for HR products-especially in India and middle east and also Africa has shot up!!
yes its true-i will put in facts and explain to you but first let me put some reasons for it.

Current objective of companies in India would be to sought "Cost Cutting measures" and also to "increase Employee productivity."
They would rather have say 1500 employees( cut down work force from 2000) and have maximum productivity to match the earlier figure of 2000 employees.

By adopting above techniques they are aiming to have maximum output with minimal cost.

Now let me give you an example-where the employee's productivity goes waste.
every day there would be transactional activities to be carried out-Both by Employees and and also HR Managers or Management.
Simple example- Leave Application- i would treat this as an transactional activity.
There are many more transactional activities- example: marking attendance/requesting Forms( leave forms/loan forms), queries,payslip request,Travel request -form based,address proof request etc-all these in case of manual process consumes huge amount of time and effort.
Now coming back to example of leave,
Every employee would have an activity to perform-i.e Leave Application( also some times cancellation/withdrawal)
Consider a manual process-Where leave application is sent by an employee by either filling up a leave form( hard copy) or writing and email and sending it to respective persons.
Every employee will have a minimum of 30 leaves in a year? ok lets make it 20.
Now an employee needs to apply for a leave-
He would take a print of the form( lets put 5 minutes for it)
Fill it up- 5-10 minutes
( or other wise compose an email- will take 10 minutes)
walk up to reporting manger to get it signed and approved- 10-15 minutes
again it might involve a chat/discussion/explanation- 10-15 minutes
( The reporting manager might not have instant access to employee's leave balance data)-might have to check with HR dept before granting-10-15 minutes.
Now the employee needs to walk up to the HR department to submit the application-10-15 minutes
( situations- HR manager not at his/her desk or HR Manager on leave/ etc etc)
He/she would submit the application-this might also involve a chat etc-10 minutes
HR Manager would update the leave balance details-in excel etc-10 minutes

and in situations like cancellation-modification-withdrawal this would involve the same cycle and also the time-

Now if i would add up the minutes that involved in a single transaction-i.e Leave Application and that too for one leave application by an employee ( lets assume he/she might take 4-5 times a year) the total minutes would be: 115 minutes average- hence almost 2 hours - which can be 1/4 th man-day
in case of 4 leave application by the employee- it would be 8 hours or 1 man day.
If you multiple by the man-day rate of your organization you can get the cost involved
i am assuming INR 3000 as per man day rate and hence one employee spends 1 man-day implies INR 3000 is the cost involved by one employee for one transactional activity.
Lets say an organization has an average 200 employees- in such a case, the total cost involved would be 200 * INR 3000= INR 600,000 six lacs-
or 200 man days spent for carrying out leave transaction- that too without full proof efficient manner.
imagine if the 200 man days was utilised in some project- you would not Only save in terms of time- but eventually in terms of Money!!

Now- How do we save cost- how do we increase employee productivity
How can we save this 200 man days for a single transactional activity or this INR 600,000 going down with out any return???

well- it can be saved...
By adopting Automation- a simple leave application tool may be a web based( browser based).
A considerate amount of time/effort and money can be saved by automation.
Through this tool the employee has instant access to his/her leave balance and can also apply immediately citing the reasons/remarks etc-
now the leave application would go to the Reporting manager- who can not only view the application-but approve/reject in a single click - also the sub ordinates leave plans/leave balance details etc present with him to take help in decision making.
Like wise HR department/Manager's task is also eased and time saved.
There are much more than just ease of transaction... the system can send alerts/reminders/validation/report generation /year ending process/en cashment etc.

The entire process of leave application can be finished or carried out in less than 10 minutes as compared to nearly 120 minutes by the manual process...
and yes i forgot to mention the cost involved for taking the hard copy of the leave form:)

Over all the ROI from the automation method is much more than the investment.
If you would do an similar calculation for other activities and arrive at the cost of it...i am sure after reading this you would search for an Automation tool and suggest your HR dept or the management.

Well...this is one example that i gave to explain to you the reverse process that is taking place -
yes demand for the HR Softwares has gone up during this Slump/recession etc..
and Especially in INDIA, middle east and Africa.
Well are few more reasons for the demand in these countries...
I can also include few Asian Countries-Japan n China.

What i feel and think could be a possible reason- 20-30 years back the market in US /Europe was emerging- which now has emerged and got a hit by the economic conditions there.

If you compare the Indian economy and the market conditions here....its not that worse.
I would agree with what Rakesh Jhunjhunwala said- India is protected- the liquidity crunch and factors are different here- a lot of Liquidity is yet to flow into the markets-Indians are still holding on their liquid assets.

the market in India can be called as emerging market- Indian companies are growing- they have their alternate market- INDIA
countries and companies would now shift their focus to emerging markets- INDIA/ middle East /Africa- literally a virgin market
The IT industry would not be dependent on the US/Europe market...
This has already started to happen...

Personally i have witnessed a sudden spur in the demand for the HR softwares....
and i have seen the sales cycles to be remarkable shorter- some thing which can be surprising-
but I am not amazed:)
Organizations- in India have closed on to buying the HR softwares in very short cycles and also have spend handsome amount in buying them-
Undoubted they understood the cost involved in manual process ( as calculated above:) ) and were quick to under stand the importance of Automation.

well...these are my views...i might be not be an expert doing this analysis...but have put down what i feel and think...

Please do give in your views/comments- and also correct me if i was wrong some where while analysing this.

Thanks & Regards,
Niraj Pradhan
Product Evangelist MinVesta Infotech Ltd. Mob:+91 9246190827 Ph: +91 40 23738072 Extn:201email: website:
Blog: Blog:

HRMS-Complete HR Suite Front Office System Payroll Software Billing Software Leave Management System Recruitment Management System Performance Management System and more...

We are Hopeful: India Inc

N. R. Narayana Murthy, chairman of Infosys Technologies:
Today is an extraordinary day. The US has voted for compassionate capitalism over laisze faire capitalism. Besides, this election has shown that meritocracy matters most. We believe president-elect Obama to be a pragmatic leader who understands that American industry needs to be competitive not just in America but in third countries as well. This election has also proved that the internet is a powerful medium for raising funds.

Samir Chopra, President of Business Process industry Association of India (BPIAI):
My belief is that the election of Senator Obama does not in any way pose a threat for the Indian IT/ITES industry. Indian industry today is deeply entrenched in business critical work for global customers and in his efforts to bring the economy back in shape he is unlikely to take actions which will impact the Global competitiveness of US companies. I think that this will lead to a new era of greater co-operation between India and US. In the current context it is even more important for the two countries to find ways to partner together to spur innovation, foster economic growth, develop an educated work force and skilled workforce, and create jobs for the global market place.
Krishnakumar Natarajan, CEO of Mindtree, a BPO:
The primary focus of the Industry should be to help President Obama in his efforts to enhance the confidence and credibility in the market and ensure that efforts to improve consumer confidence and improve liquidity are urgently and effectively addressed. Vipul Jain, CEO &
Managing Director of Kale Consultants:
This is a fantastic result for America. The country needed somebody young and dynamic to take the economy out of its current downturn, and Obama is the right person for the job. He can drive transformational change bringing fresh energy, impetus and direction to a slowing economy. U.S.A. being the dominant economic power, a positive political change will bode well for the world at large, including India. There is no doubt that he will provide incentives to American businesses to keep jobs in America, but the Indian IT and ITeS industry is very capable of providing value beyond cost arbitrage.