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Emerging Trends of Human Resource Management (With Special Focus on Information Technology Industry)

EMERGING TRENDS OF HUMAN RESOURCE MANAGEMENT (WITH SPECIAL FOCUS ON INFORMATION TECHNOLOGY INDUSTRY)
E m e r gin g T r e n d s of H u m a n Re sou r c e M a n a ge m e n t ( W it h S p e c ia l Foc u s on I n f or m a t ion T e c h n ology I n d u st r y)

Ms. Amrita Garg Human Resource Executive, Teerthanker University, Moradabad Ms. Anshika Sharma Lecturer, Department of Management Studies, IFTM, Moradabad Mr. Manish Ranjan Pandey Senior Lecturer, Department of Management Studies, IFTM, Moradabad ABSTRACT Human resource is a relatively modern management term having been coined in the 1960s. The origins of the function arose in those organizations which introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management. Since 1990 due to liberalized government policies, Indian scenario began to change. Human resource became one of crucial driver for development and change. As the viewpoint of management towards its employees began to change, role and contribution of human resource as a talent pool also become so vital that most of the organizations started to focus their vision and mission statements on the people who work for them. With the boom in the technology sector in 2000, newer and newer ways of attracting, recruiting and managing tenant in the companies also started to emerge. This paper tries to identify various trends which came into existence as a result of technology revolution in the country and make a comparison between pre and post liberalization HR trends in IT industry. Keywords: Human Resource Trends in IT industry, Online Recruitment Systems, Human Resource in Pre and Post Liberalization Era. GENESIS Human Resource is a term used to describe the individuals which comprises the workforce of an organization, although it is also applied in labor economics, for example, business sectors or even whole nations. Human Resource is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials 'HR'.
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Human resource is a relatively modern management term having been coined in the 1960s. The origins of the function arose in those organizations which introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management. The use of the term, 'human resources' by organizations to describe the workforce capacity, is available to devote to the achievement of its strategies. In the simplest terms, the objective of an organization's human resource management strategy is to maximize the return on investment from the organization's human capital and minimize financial risk. Human Resources seeks to achieve this by aligning the supply of skilled and qualified individuals, and the capabilities of the current workforce, with the ongoing and future business plans and requirements of the organization in order to maximize return on investment and seeks to secure the future survival and success of the entity. In ensuring such objectives are achieved, the human resource function purpose in this context is to implement the organizations human resource requirements effectively but also pragmatically, taking account of legal, ethical and as far as is practical in a manner which retains the support and respect of the workforce. The Human Resources function may set strategies and develop policies, standards, systems and processes to implement these strategies in a whole range of areas for which the following would be typical of a wide range of organizations. 1. 2. 3. 4. 5. 6. 7. 8. Recruitment and Selection (Resourcing) Organizational design and development. Business transformation and change management Performance, conduct and behavior management Industrial and employee relations Human resources (or workforce) analysis and the management of personal data Compensation, rewards and Benefits management Training & development (Learning management) workforce

Implementation of such policies, processes or standards may be directly managed by the HR function itself, or the function may indirectly supervise the implementation of such activities by managers, other business functions or via third-party external partner organizations. HUMAN RESOURCE MANAGEMENT TRENDS In organizations, it is important to determine both current and future organizational requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers. The external factors are those largely out-with the control of the organization and include issues such as the economic climate, current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the
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other hand internal influences are broadly within the control of the organization to predict, determine and monitor, for example the organizational culture underpinned by management behaviors (or style), environmental climate and the approach to ethical and corporate social responsibilities. In order to know the business environment in which any organization operates, three major trends should be considered: Demographics It is the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc. Diversity It refers to the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "babyboomers" or older employees in comparison to thirty years ago. Advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc. Skills and qualifications - As industries move from manual to more managerial professions, so does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for the jobs), employers will have to compete for employees by offering financial rewards, community investment, etc. HR TRENDS IN PRE-LIBERALIZATION PHASE In 1990 due to liberalized government policies of various countries the human resource started floating from one country to another this led to diversification of workforce and cross culture took place as a result employees from one nation migrating to another nation and bringing their culture with them this led to mixed organization culture so the HR professional has to play major role in coordinating the workforce of different culture in an organization. Evolution of Personnel management started in 19th century at that time there was a boom in industrialization which leads to increase in franchising and influence of trade unions and harshness of industrial condition called for the better of industrial condition. Second World War increased the importance of having personnel department because of producing large war materials the ministry of labor and national services insisted to combine both personnel department and welfare officer work on a full time basis. HR TRENDS IN POST-LIBERALIZATION PHASE Corporate India has come a long way since Independence. Today Indian companies have spread themselves across the globe and are moving to a borderless world. Similarly post liberalization and globalization a large population of Indians have become a part of the multinational and foreign units. In short, the Indian workforce and the industrial climate are both continuously changing. Thus at this juncture it is very vital to understand the changing trends of the most valuable asset of an organization Its people. There is constant need to develop capabilities, leverage them
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to ensure the growth and success of an organization and at the same time add value to an organization. The key players who have served as facilitators are the Human Resource professionals who have moved beyond their administrative role to emerge as a strategic business partner. Their role has become very critical in providing radical solutions to organization success. Today they no longer work in independent silos, but have aligned themselves with the strategic goals. With the changing market trends HR today is faced with several challenges and people management issues in this talent short market. Human resource professionals need to think differently today and further experiment varied processes & methodologies benefiting the human capital and the organization at large. EMERGING HR TREND IN INDIA A look at the trends in managing people in this dynamic industry reflects that Attracting, Managing, Nurturing talent and Retaining people has emerged to be the single most critical issue in lieu of the enormous opportunities spun off by the market. The new avatar of talent is the knowledge professional who is innovative, business savvy, quick on the uptake, has an instinctive ability to network, and possessing unbridled ambition. They are propelled by an urge to experiment, scan new avenues that can spur their creativity. The knowledge professional will gravitate to an organization that is flexible, has strong values, a robust performance ethic and provides challenging work on latest technology. This has led to companies proactively taking measures on three fronts. First, companies create an organizational ambience where talent can bloom. Second, they put in place systems that help unleash their potential and third, they build a reward and recognition mechanism that provides value for people. HR TREND IN INFORMATION TECHNOLOGY INDUSTRY Technology constantly generates unexpected consequence. The simple ability to send information anywhere immediately, at minimal cost has so many ramifications. The most obvious of the effects being in the reach and speed of dissemination of information. The Human Resource trend in Information technology is discussed in this study. Three significant growth trends in Corporate India are now pushing Hr Manger to look towards technology for solution. First an explosion in CEO Level searches and hires by Indian companies. People like Director of Tata Sons Alan Rosting, Ranbaxy CEO Brian Tempest, and Managing Directors of Indian Hotels Raymond Bickson are familiar examples. Second, many companies are searching for middle and entry-level talent. Tata Consultancy plans to hire 800 people in the US this year, mostly off campuses. Third, Indian companies are inheriting a large number of employees through global acquisitions. For example, Tata Motors gained 1,000 global workers through acquisition in Korea and Spain. And Dr.Reddy added 340 workers through a Mexican acquisition in November.
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In this scenario- Role of HRM in integrating employees into the organization with speed ensuring high levels of performance becomes more critical than ever. And its is technology in the form of HR systems that is aiding the HR department in doing this today, keeping pace with the growing needs of Indian business. FINDINGS AND DISCUSSION As per the research plan, the researchers are gone through various available literatures showcasing the trends in Human Resource Management features and practices across the industries and found the following key trends in such practices: 1. The country which has been such a popular people resource for the IT industry the world over, is struggling with numbers to meet its own demand. To meet the overall software and services (domestic and export) target of $87 billion by 2008, according to the Nasscom-McKinsey report, the country will require a minimum of 2.2 million knowledge workers for its domestic needs. This implies that the present strength, which stands at 12,00,000 (December 2004), has to increase about twice, not just in quantity but in quality as well. According to industry estimates, majority of the demand for manpower will be in the area of IT-enabled services. While Nasscom puts the requirement at 11,00,000, MIT says IT-enabled services and e-business will need 12,70,000 workers by 2007. Experts insist that since this sector does not require very highly skilled manpower, we can easily meet this demand. "IT-enabled services is a wonderful opportunity for India and for such services you dont need highly skilled professionals. You just need smart graduates who can speak English, all you need to do is train them. For instance, in a call center, they need to be trained on accents and customer services," Emerging concept of 4 Rs among Human Resource Managers: Retaining Retention bonus Project pay Reduct FTE/same pay Telecommuting Externs Job sharing Recognition programs Retraining Job rotation Team assignments Skill inventories Competency development Certification Restructuring Broad job descriptions Flexible compensation programs Flexible jobs Positive problemsolving spirit

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Recruiting Signing bonus Finders Fee Alumni connections Non-techs Students Interns

Source: Hr Trend in IT Industry, War talent

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4. HIRING TRENDS among IT Companies in last few years:

The above chart shows that the recruitment of engineers and IT professionals in the industry is growing at the Compound Annual Rate of 14.5% approximately. The direct employment in the IT-ITES sector was 1.3 million people and the indirect employment was 3 million approximately. 5. SALARY TREND also shows that Along with abundant growth opportunities, IT sector is one of the highest paying sectors. The average increase in salary in IT sector across the levels was around 16% and the average increase in the ITeS BPO sector across the levels was in between 16%-18%. The Indian IT services industry, which has been a forerunner in creating and implementing innovative HR strategies, is expected to focus more on strengthening the middle management cadre. The IT industry's challenge seems bigger as the sector is facing an acute shortage of skilled manpower, rising income levels and the proliferation of new job opportunities. During the recovery period, many companies have adopted various advanced technologies in their work life like human analytics, human capital management, early warning systems and others. These technologies help increase the efficiency level and meet the ever increasing needs in this competitive world." Pankaj Shankar, global head (HR) at the technology solutions company Infogain Corporation, says that acquisition and retention of talent will not be the only challenge. "Apart from talent acquisition and retention, leadership development, aligning and integrating people's performance with business goals, management of intellectual capital and compensation management would also require attention of HR managers in the coming year," he adds. The Indian IT services industry, which has been a forerunner in creating and implementing innovative HR strategies, is expected to focus more on strengthening the middle management cadre. The IT
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industry's challenge seems bigger as the sector is facing an acute shortage of skilled manpower, rising income levels and the proliferation of new job opportunities 9. Nine Major HRM Trends and Strategies to deal with global slowdown include: (Source- HANNA HUMAN RESOURCE) Trends Transportation Support and Flexible Scheduling None Telecommuting Four-Day Work Week Organized Carpools Public Transportation Discount Gas Card Reward System Job Sharing Environmental Responsibility Policy (Go Green) Informal Policy implemented No Policy with Plans to Have One in 2009 No policy with No Plan to Create One Formal Policy Implemented Use of Online Communities Used in the Workforce. Communicate with Customers Recruit Potential Employees Between Employees Network With Blessing Prospects Tasks That Will be Outsourced in 2009 Employee Assistance Background Checks Payroll Compensation Administration Outplacement Training Benefits Administration Percentage of Workforce Being Downsized No Layoffs 1-5% 6-10%
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Response

41.4% 37.9% 31.0% 17.2% 10.3% 6.9% 6.9%

31.1% 25.0% 25.0% 17.9%

60.0% 53.3% 53.3% 40.0% 78.9% 63.2% 47.4% 21.1% 15.8% 15.8% 5.3%

31.1% 35.7% 10.7%

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11.20% 21-30% Strategies to Deal With Increased Healthcare Costs. Health Promotion Wellness Program Consumer Directed health Plan Designs Defined Contribution Health Plan Risk Factor Identification Broader Absence Measurement Manager Solutions Used To Support Retention Strategies. Training and Development Programs Compensation and Benefits Recognition and Reward Program Preparation for the "Brain Drain" Plan on dealing with the issue in 2009 Do not plan on dealing with the issue Active Program in place to identify and train future leaders On-Going Recruitment Program Solid Succession Plan Multiple Generations in Workforce Baby Boomers (ages 44-62) Generation X (ages 28-43) Generation Y (ages 24 below) Traditionalist (ages 63-82)

14.3% 7.1%

92.6% 33.3% 29.6% 14.8% 11.1%

65.4% 53.8% 50.0% 48.3% 13.9% 13.9% 10.3% 10.3% 42.22% 40.19% 15.22% 6.38%

The above 9blocks are showing the 9 Human resource Trends of the year 2009 along with responses by various respondents in various ways. These trends includespercentage of workforce being downsized, Strategies to deal with increased healthcare costs, solutions used to support retention strategies, preparation for the brain drain, multiple generation for the workforce, Transportation support and flexible scheduling, environmental responsibility policy, uses of online communication used in workforce and tasks that will be outsourced in 2009. 10. The HR function is in for a very different year from last year and a tough one too: HR budgets are being reduced in 43% of organizations. 40% of organizations expect to be reducing headcount.

The focus for the year ahead has changed dramatically from last year:- 2008 was a year focused on recruitment and retention. And 2009 will be a year focused on organizational restructuring and developing employee capability.

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11. IBM said-IBM researchers have also developed a "Skills Planning" model for optimal allocation of skills and job roles across an organization's multiple sites, to minimize the impact of a disaster at any one site. This model takes into account various operational aspects, including critical workloads, skill levels, mobile workers, multi-skilled workers, cross-training, operations in shifts, wage costs, and multi-location communication or management overheads. 12. Keeping employees in-the-know- HCL Technologies has also oriented itself in a similar manner, focusing on communications, to keep employees in-the-know and maintain transparency. According to D K Srivastava, Global Head, Corporate HR, HCL Technologies, trust through transparency with all its stakeholders is the core culture at HCL. HCL Technologies has a well-fuelled mechanism set up to enable employees to enhance their skills; increase productivity and increase deployability. We have a dedicated department that focuses only on training employees the Talent Transformation and Entrepreneurship Development team, Srivastava states. CONCLUSION Human resource Management will be the key area of focus in 21st century as in companies and government organization put in place strategies to cope up with the economical crisis and recovery. The so called war for talent is on the backburner as the focus shifts to hiring freezes, benefits and compensation cost management, and workforce reduction in the hardest- hit segment and as the the era of skill-based workers has arrived but if India wants to truly move to the global arena, it has to spruce up its workforce. Small may be beautiful, but not in the IT industry. In the knowledge era and a skill-based economy, it has become imperative that human resources become one of the most essential ingredients of success. The growth of IT companies worldwide depends on its people and the intellectual capital it possesses. Knowledge workers has become a buzzword in todays IT scenario. And if we look at the top software exporters, they have been growing phenomenally in workforce strength. To make it big in the global software market, India needs to increase its mass of knowledge workers. The total human resource strength of the IT industry as a whole stands at 425,609. A company-wise break-up of this figure reveals that nearly 525 companies constituting 35% of the IT industry employ an average of 58 persons each, 750 companies constituting 50% of the industry employ an average of 275 persons each, and 150 companies constituting 10% of the industry employ an average of 726 persons each. At least 40 companies have more than 1,000 employees, while some very big companies like TCS, Wipro, HCL and Infosys have staffs above 5,000 each. As we already know that Human Resource Management of the organization deals with the individuals putting their hard work to meet the organizations goals. Managing people is the toughest element of any organization than land, machinery or finances. Every human being has its own degree of preferences, likings and attitude. So, HR
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managers have to take care of all these things in mind while dealing with the number of people working in the organization. But, emerging HR trends of Information Technology industry cannot be managed properly by the old traditional HR techniques. As it is commonly known that man learns by experience. 50 years of introduction of computers has provided us the areas to be additionally addressed by the HR managers in IT sector. Indian IT industry is not an exception. Hence, the IT industry has been devising newer Personnel Management/ HR techniques which specifically meet the needs of IT industry. The main reason for this is high standards of education and professional training required for this industry. Secondly, there is an excessive job demand for developed countries in this sector and high wage standards. So, HR managers mainly in developing countries like India find it very difficult to retain and recruit their manpower. Hence, it can be concluded that Emerging HR trends of Indian It industry are quite different from the old economy industry. India is considered one of Super Power in Information Technology and allied fields. Majority of world leaders in IT sector are outsourcing their requirements from Indian IT Industry and recruiting Indian IT professionals. Hence, the Indian Government must allow the Industry to meet international competition and desired environment in respect of Labour Laws and financial rules must be liberalized for this Indian IT Industry. Moreover, HR managers in Indian IT Industry must keep the sensitive nature of IT professionals and state of greater opportunities outside in mind for devising HR policies for their organizations. REFERENCES 1. 2. 3. 4. 5. Ashwathapa K. (2005) Human Resource Management Tata Mc Graw Hills, Fifth edition Kothari C.R., Research Methodology: Methods and Techniques, Wishwa Prakashan, New Delhi, Edition 2nd, 2003. Mamoria C.B and Gankar S.B ( 2005) Publishing House, Twenty Fifth edition. Personnel Management Himalaya

Pareek, U and T.V.Rao, 1981, "Designing and Managing Human Resource Systems", Oxford and IBH Publishing Co., New Delhi. Rao, T.V. and Abraham, E.A.," A Survey of HRD Practices in Indian Industry, in Rao, T.V. and Pereira, D.F., Recent Experiences in HRD, New Delhi, Oxford & IBH, 1985. http://www.articlesbase.com/authors/shiny-p-kumar/177340 http://www.hrsuccessmantra.com/2010/02/new-trends-in-internationalhrm.html http://humanresources.about.com/ http://www.timesascent.in/index.aspx?page=section&sectid=2&sectname=Intervi ews
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10. http://www.timesascent.in/section/24/HR%20Download%20%20Staffing%20&%20Compensation 11. http://www.naukrihub.com/india/information-technology/ 12. http://ideas.repec.org/p/pra/mprapa/2368.html#abstract 13. http://www.scribd.com/ 14. http://www.icmrindia.org/Short%20Case%20Studies/Short%20Case%20Studies.a sp?cat=Human%20Resource%20Management 15. http://gateway.sources.com/ 16. http://en.wikipedia.org/wiki/Human_resources#Major_trends 17. http://yourhrmguide.com/content/hr-recession 18. http://blog.nasscom.in/nasscomnewsline/2009/04/human-resource-issues-inthe-time-of-the-global-economic-slowdown/ 19. http://www.vservesolution.com/pdf/Information%20Technology%20Industry%2 0in%20India.pdf

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