Did India Inc. used US Recession as a tool to exploit employees ?

I think due to shifting of economy from manufacturing to service, specifically IT + ITES sector, globalization, tremendous development in communication means & other factors, employment in IT sector got hyped to extent that people used to sit on bench & got paid heavily for doing nothing & as recession hit US continent & other parts of world & countries badly who were mostly dependant upon US Economy for any important Economic decision/reform, & as the cliché goes, whenever the US sneezes, the world catches a cold.  Indian IT companies that have major outsourcing deals from the US, suffered losses because of their trade links, but India [excluding IT, ITES, Jewelry, and Export & Import sector] remained relatively less affected by adverse global events." In fact, many small and medium companies have already developed trade ties with China and European & other countries which are less/not dependant on US Economy. Further, affected ones are stable primarily [& only in most of the cases] due to control and proactive measures undertaken by India inc by adopting Counter strategy to enhance productivity & Cost cutting by means of reducing non productive manpower & lowering salary scales, increment or appraisal freezing in IT sector which was over hyped earlier & now they have corrected the structure to some extent.  People may say that there is a huge job loss happened due to recession, and will cite the example of TCS [again IT Company] firing about 500 employees but these were employees who didn’t perform and for cost cutting one have to reduce Non performing asset and that exactly what has been done. There is no threat to the skilled people. Yeah though I won’t say that there wasn’t any pressure at all as to be productive & deliver max however it got used as strategy to improve on overall efficiency of an establishment including manpower as   Perform or Perish is new age mantra & HR Dept or Strategy can’t be held responsible for that.   Going ahead I wd say its an positive impact of slowdown/liquidity crunch/recession [whatever u wd like to name it] that Corporate India is also learning to master the art of efficient capital mgmt, reduction in costs & delivery of value-added services to sustain profit margins, retaining critical talent pool by investing more in training & development, giving time + opportunities to employees to excel, to grow. Now I can firmly say that corporate citizens of India have not used US Recession as a tool to exploit employees. Certainly not…

I would beg to differ from the idea that have been put forward. Even without being very supportive, let me draw your attention to the fact that a major share of the the then employemnt drive, came from the outsourcing business that were making merry in India. The way I see it, a major poretion of this would actually come3 up from the countries like US, IK or the other west European countries, who have been the epicentre of the recession. So, quiet clearly, the inflow of these businesses were stopped which actually resulted in the ongoing process of scarcity of jobs.

If feel Indian workers are paid huge salaries nowadays compared to yester years. Whether this is in lne with ones skill level is not known. If it is the second case then the Industries are paying a huge service to the nation, since developed countries pay huge salaries based on skill levels, which is also the economic critierion.

Now the fact is India didn't face a recession because of this reason that our wageearners could spend and make our industries run trouble free. Another fact is a country can develope and grow only if employees are paid enough to sustain the economy. Somebody should be around to consume the products you manufacture otherwise the companies will have to run at half throttle and the economy stagnates like it used to be in the pre globalized settings.

Probably in the long run we should create more skilled labor to match the salary level they get now in India.

@ Mr Inderpal singh

Agree with you sir...And obviously the customer base goes down when you have majorty of them in the recession/slowdown affected areas....also, Q3 results have seen a hike in comarision to last year similar quarter which was one of the most affected. So is not it justified that it had to go up after all the precautionary measures and a rise in the market condition?I think, it should.

Regards

Ankur

I agree with Gargi, that India has not faces recession, its a slow down. And this slow down is not only for India, but all over the world. I dont think that any organization can use this as a tools. And most importantthe word "Exploit" is concern, now a days its not at possible. Beacuse most of the companies are maintain transparency with the employees. And employees also knows the facts that whatever the things going on in organization & to what extent. Yersterday, India's second largest commercial vehicle manufacture Ashok Leyland, has declare to reallign the deductions & bonus of last year. In the same way, many organizations are cominh upfront & recalling their things. So "Exploit" is totally a diffrent thing which corporate never used.

I am not sure if i am ready to accept the word "exploit" yet. What i am sure about is that as a result of the global slow down (and not just the US recession alone), MNC have hedged their bets when it comes to employee benefits. Hence salary increments are lower than what they could have been.

It will take some time for all to feel confidence in the market conditions and proactively look at employee benefits. It has only recently been on the upswing. Thanks Gargi.

Thanks, Mr.Bhave, for a different perspective.

However, we need to understand that had the HR not undertaken such measures, most of the organizations would have no longer been existent. Yes, there would have been measures that would have hurt certain employees (most of them below the belt), but for the organization's survival or continuity, they might have been esssential.

I am aware of a number of companies which did not take the route of lay-offs but survived due to cost controls in other areas, or employees agreed to a pay-cut, etc.

Most importantly, it has resulted in rationalization of salaries which had become the bane for most organizations. Employees who were not deserving had to be paid salaries much more than their worth. It is sad that others also got aught in the grind, but I guess that is an inevitable part of every recessionary trend that has been witnessed till date.

My two cents worth.....

It is surprising that we ask such a question. Yes, India did not go through a recessionary phase, but, as Gargi says, it was a slowdown.

It is natural in such circumstances for an organisation to take a re-look at it's costs and unfortunately, the one that gets impacted the first is manpower and related costs like increments, T&D, etc. Hence most organisations did what was inevitable. This has also resulted in realignment or rationalization of salaries. 

Once costs are controlled and business revives, it is obvious that the annual or quarter results would show an improvement. Most IT companies reduced the staff on the bench, who were not contributing to revenue but added to the cost. These parameters have hence resulted in better performance results for most organizations. 

There is hope, however, as the market is showing tangible signs of improvement and growth.

Thanks for the referral, Gargi

none of the public sectors hav such problm.. only foreign based companies went for layoff,. evn the examples u hav given r IT companies and not public sectors.