2012 will herald a new era of innovation which will see talent managers focus on the use of web

& cloud technology, social media, coaching, talent analytics and outsourcing of recruitment processes. People Matters spoke with industry veterans to explore trends that will confront talent managers in 2012 As the world enters an unprecedented era in 2012, the governing equations for businesses are going to be paradoxical and at the same time equally challenging. The global economic outlook at the moment is quite gloomy, and there are risks of sliding into a double dip recession. And at the same time, businesses across verticals are entering an era of unparalleled talent scarcity, which, if left unaddressed, will put a brake on economic growth, leave alone business growth, and will fundamentally change the way workforce challenges are addressed. In the Indian context, the dwindling economic indicators also paint a gloomy outlook. Despite 13 consecutive rate cuts by the Reserve Bank of India and maintaining status quo in the last credit policy meet, it has not been able to infuse the much needed enthusiasm amongst investors. The depreciation of the Indian currency by over 20 percent in the last four months (the exchange rate is currently pegged at Rs 53.42 per dollar) is a cause of concern for an economy which imports commodities like crude oil. The industry output has recorded a two year low and in comparison to corresponding period last year, has recorded a de-growth of 5.1 percent. While food inflation is gradually decreasing, overall inflation still remains much above the governments and central banks comfort zone. Despite efforts by the government, it has not been able to contain fiscal deficit, which is expected to breach the 4.6 percent target and reach 5.5 percent. The rate of growth of GDP too has been on a decline and in the second quarter of the current fiscal dipped down to 6.9 percent, the slowest in last 2 years. Amidst all these and thanks to the Eurozone crisis, Sensex - the economic barometer too is pegged below the 16,000 mark. The fear of a slowdown is clearly looming large. The uncertain economic outlook and challenges associated with turbulent economy will force organizations to reflect an appropriate balance between investment in the workforce and return on that investment in terms of performance and productivity. Issues

of employee engagement, talent acquisition and retention, compensation and benefits, leadership pipeline, come to the fore; in 2012 some of these same issues will continue to demand attention but perhaps in new ways. People Matters in conversation with over 60 industry veterans, compiled a list of trends that will keep organizations on tenterhooks as far as talent management is concerned. Leveraging technology, empowering people, embracing new social media, emergence of recruitment process outsourcing and diversity & inclusion are clear trends for the year ahead. The changing pace of workplace and workforce dynamics will ensure that optimization of resources plays a key role in planning for human capital resources and strategies for 2012. As part of this story, People Matters and The Strategist also conducted a study to involve the professional community in sharing their views on the future of the HR function, its trends and prospects for 2012.

1. Managing talent in a rightsizing environment

In the global context, 2011 has been a year that has witnessed layoffs in large numbers especially in the BFSI sector. The Indian subsidiaries of these very organizations have not been spared either. With slowdown looming large, talent management practices across the board are bound to be impacted across verticals. Managing talent in times of economic turbulence is a challenge and organizations will need to redefine what that means in their context. While organizations will handle rightsizing sensitively, a number of them will put together an integrated strategy taking a long term perspective that will stand the company in good stead. A creatively crafted talent management strategy will be resorted to, which can differentiate the organization and separate good performers from the ordinary. Organizations will also leverage the slowdown to emphasize on reassessment of internal priorities and throw up opportunities for talent managers to be innovative and show their value from a business perspective. Howsoever much layoff may be the last resort in times of slowdown, organizations will take measures to lift employee morale with stretch

assignments and non-financial incentives and differentiate themselves in the talent marketplace. There will be an increasing use of analytics wherein employee data from traditional approaches will be used to identify the business acumen potential of existing employees so as to re-deploy them to suitable roles. Organizations may also focus on introducing the concept of ownership and the financial outcomes of their actions and decisions. Also, new trends will emerge from this new equation, for example, fear of unionization of white collared employees. Such unwarranted fears further scale up the degree of challenges in terms of talent management.

2. Social Media: Blurring the line between real and virtual

Today, social media transcends beyond just being a space for virtual socializing, which has made life easier to maintain relationships with future, present and past co-workers. Social media sites such as Facebook and LinkedIn have emerged as new recruitment avenues and transforming the landscape of employer branding and lead generation of candidates. Managers and talent management leaders are exploring how teamwork, learning, development, recruiting, and best practice sharing can be improved using collaborative platforms. This increasing inclusion of social media will change the rules of the game in terms of recruitment, engagement, performance management, rewards etc. The social media savvy younger generation joining the workforce will change the industry landscape, forcing companies to make social media mainstream. As social media becomes an active instrument in administering talent applications, companies will see the line between real and virtual life blurring fast, and this will require organizations to revisit its talent strategy to address the same. Apart from the traditional practices of using social media to create talent communities for engagement, employer brand and attraction of talent, performance management, peer-to-peer feedback and recognition etc; there will be an increasing use of social media to empower employees to voice their opinions and create their internal networks.

3. Talent analytics and predictive modeling

Organizations are moving from value added to value delivered wherein the emphasis is more on the tangible deliverables which can be quantified in terms of revenue, cost savings etc., rather than the intangible value that may have been added to the business. Organizations are increasingly looking at evidence based and scientifically researched tools that are effective in talent programs which can help make more informed decisions that impact organizational effectiveness, productivity and ultimately competitive positioning. A new class of analytics and predictive modeling will be the need of the hour which can help HR understand and appropriately respond to trends and future events. For example, predictive analytics can help organizations identify high-risk employees, build profiles of those most likely to stay/quit and understand how risk is distributed throughout the organization. Analytics will invariably help organizations measure critical parameters like turnover, understand its cause and design programs to control the same. Organizations can effectively use analytics to suitably forecast capabilities which will enable managers to accurately plan headcount and skills, spot trends and determine optimal combination of resources with a given set of constraints. Going forward, talent data/metrics/analytics will be the focus area as it will help in operational efficiency as well as cost reductions. Organizations will increasingly make use of sophisticated analytics and will lay emphasis on predictive analytics model that will launch HR into the strategy orbit which is currently more controlled by the marketing and finance department. Organizations which understand how to analyze and use analytics will ultimately outperform those that do not have these skills.

4. Coaching will define talent management

The growth phase and increasing economic uncertainty has put companies in different doldrums where CEOs are faced with unique business challenges every day, and businesses are faced with a constant challenge to find talent to drive its business growth. Amidst such milieu, companies will increasingly opt to seek respite in adopting coaching as a business critical activity to address both concerns. Increasing instability in the business scenario will continue to raise complex challenges for CEOs and

necessitate organizational leaders to strategize, think and act in entirely new ways for growth and sustenance in the Indian as well as the global market. The complexity and shortened business cycles will push CEOs and business leaders to take refuge in a sounding board an external coach who is a trusted friend, philosopher and guide. With top companies prefering coaching and mentoring for customized learning opportunity for top leaders; organizations will focus on the need for coaching to be more fully integrated with talent management and other leadership development initiatives. As companies go global to increase market share, a key problem they will face is the lack of capable leaders who can drive these new businesses. This in turn will further the need for a well-defined coaching initiative within the organization for focused leadership development. The industry of coaching which is currently estimated to be to the tune of Rs. 250 crores is expected to grow at 50 percent per annum and become worth Rs 800 crore by 2014.

5. Web software & cloud computing, changing HR technology landscape

There is a steady and accelerating replacement of old HRMS systems with the SaaS (software as a service) enabled HRMS software. The shift from either in-house developed systems or a licensing and maintenance feebased system, to a leasing fee system is primarily because of the expense involved in maintaining old HRMS systems and the issues related to legacy systems. There is an increasing shift towards the use of web-based technology and cloud computing in place of high end technology. These new accessible technologies will greatly reduce the overall cost, they will be easier to use and will provide a greater degree of integrated set of data for decision making. It is expected that Tablets will become the virtual classroom, and an emerging class of tools such as social recruiting tools, career management tools, advanced analytics tools and mobile solutions will let employees manage almost every aspect of their professional life digitally. Talent

management leaders will need to invest heavily to support execution of talent management initiatives across mobile.

6. Boundaryless engagement
The internal and external challenges faced by businesses are re-shaping an organizations approach to employee engagement. Organizations are revisiting their employee value propositions and focusing on defining their employer brand to create a differentiated way to attract retain and engage talent. According to The Strategist - People Matters study, 18 percent of the participating organizations believed that they would be making big investments in building their employer brand and the employee value proposition. 63 percent of the organizations indicated that they would invest in building their employer brand and the employee value proposition, mainly through the non-advertising route. Engagement is not for employees alone, companies will engage more strongly with potential candidates and also engage with its alumnus. This engagement is not limited to the four walls of the organization. Organizations will use social media to enhance employer branding by engaging the current workforce, alumni, new talent pools and reaching out to the extended referrals of their current employees and their alumnus. Organizations will increasingly put forth the question as to whether or not, employer brand is a priority for them and whether they are assessing the role of employer brand equity in the new evolving business environment.

7. Employee as volunteers
In what could be termed as a paradigm shift, employees are increasingly treating themselves as volunteers who join an organization because of their alignment with the objectives of the organization. They would prefer to work with the organization as long as they can relate to the cause and are satisfied with their contribution, and move on when they feel the objectives have collided. Given this setting of new culture of workforce, the traditional approach to rewards and recognition can no longer work. In fact for an organization people promise need to go beyond compensation and benefits, and include benefits like work-life balance, challenging

assignment and opportunities, larger purpose and alignment to values and principles beyond profits. A well-planned rewards and recognition program keeping this radical shift would be the way to keep the volunteer engaged. The role of managers in the entire process of engagement will be critical as rewards are no longer tangible. Given that employees consider themselves more as a volunteer, they are more likely to embrace the organizations corporate goal when they see that their contributions are being perceived as important, valued and recognized. At a time when employee poaching is on the rise, in order to retain talent, organizations will increasingly come up with benefits and reward and recognition structures that are perceived by employees as fair, consistent and transparent. More importantly, when employees are volunteers who are purpose driven, keeping them engaged is perhaps a good tool to reward them.

8. Career direction
The new reality is that the new generation starts valuing themselves more at a very early stage in their career. The Gen Y employees proactively take command over their career destiny and in turn, aim for greater ownership of their professional lives. Seeing this change, the onus of employee development is due to move from being the organizations prerogative to becoming an individuals choice. The new year will see a change in terms of passing the career development and enhancement baton to the employees where they will be increasingly empowered to own their careers, while the organization will play the role of being a facilitator. This will increasingly see organizations moving away from the traditional command-and-control management styles to coach-and-collaborate schemes that harbor empowerment. Given the dynamics of ownership of career, there will be a gradual gravitation of the ownership of career from the employer to the employee. Also going forward, HR will need to reward leaders who empower employees as well as train and incentivize managers to empower the rank below.

9. Owning the talent supply chain

Researches from industry bodies and think tanks amply make it clear that there exists a huge talent gap especially when it comes to industry-ready recruits. True, that the NASSCOM-McKinsey report which states that, only 25 percent of engineering graduates in India have the skills to be employed in IT jobs without prior training needs to be revised, however the fact that talent building remains a key challenge for Indian firms cannot be ruled out. While, ideally quality education should happen in schools and colleges, but given the fact that a gap does exist, organizations cannot wait for the government to put in place an industry-recruit ready education system that caters to their needs. Thus in the face of such an inescapable situation, it only makes sense to develop talent internally. So, be it through campus connect program, investing in building a corporate university, or tying up with NSDC to promote skills development by providing gap funding and equity investment to build scalable, for profit vocational training initiatives; investment in talent development will ensure a sustainable pool of highly skilled resources. While campus connect, more so an industry-academia convergence, has been much in vogue and helps bridge the skill gap, it is increased investments into starting up a corporate university and tying up with NSDC and NGOs that will be the focus of organizations in 2012. This will not only help an individual organization meet is talent demand requirement, but in a way will also have skilled talent pool ready for the industry at large. Skilling, training, mentoring amongst others will help organizations in capability building and in turn, will help employees not only be better skilled but will help them better handle the psychological pressures at workplace with employment uncertainties gearing up. Capability building will move from being a sole responsibility of the HR department, to be a responsibility that is shared between both business and HR, requiring active engagement, commitment and accountability from the line managers.

10. Emergence of RPOs

The recruitment space is changing fast and organizations are relying on outsourcing of their recruitment processes. In this context of RPOs, there will be two clear trends; the first is the emergence of RPOs specific to

industry verticals like IT, pharmaceuticals and BFSI while the second will be that of a generic RPO, cutting across sectors and will cater to specific roles like sales and customer care across verticals. The emergence of RPOs across industry verticals will change the dynamics of the HR structure when it comes to the recruitment team. Recruitment teams will focus more on recruitment trends, strategy and innovation on sources of talent, rather than delivering recruitment. Additionally, RPO will affect the cost structure of recruitment becoming more variable. Finally, RPOs will move recruitment itself to the next level with the introduction of cutting edge technologies and analytics. In 2012, RPOs will impact the recruitment industry and its current structure and practices. Mom and pop outlets will become vendors to the bigger providers and they will have no direct contact with the client organization. Further unethical practices in the system will get eliminated and there will be new benchmarks of transparency in recruitment.

11. Exclusive inclusion

Organizations across verticals have realized the importance of diversity and inclusion at workplace. This will help increase the available talent pool and seek to reap benefits that diversity brings to business. Managing these diverse talent pools will imply that one shoe does not fit all. As corporate India innovates, grows and evolves into a global brand, diversity and inclusion policies and practices have begun to grow in importance and in their scope. As competition for recruiting and retaining the best talent intensifies, companies across the board - financial, IT services and engineering - have begun to realize the importance of having an inclusive and welcoming work environment for all employees - irrespective of ethnic or cultural background, gender or physical abilities. Recruiting, retaining, and promoting diverse employees have nevertheless become critical to an organizations success. With diversity of workforce comes the challenge of meeting the expectations of individual groups whose needs differ from each other, thereby suggesting that one rule for all cannot hold true. What is essential

is that todays ecosystem is looked as a workforce of one rather than a monolithic entity. Workforce of one is an approach to talent management that helps tailor people practices and policies to individuals and groups of employees throughout the organization, with the goal of improving individual and organizational effectiveness. It is herein that the marketing concept of segmentation will have to be applied in order to meet the varied expectations of the workforce. In the days to come, organizations will opt for either segmenting the workforce wherein the different talent management practices will be designed and deployed to cater to the different talent segments; or will offer modular choices; or will define broad and simple rules with clear boundaries which can be interpreted; or will opt for fostering employees with defined personalization wherein HR will support an individual employee to define his/her own personalized people practice. These can be opted in silos or in combination of two or more options. 12. HR transformation The increasing fear of unavailability of the right talent to execute their companies strategies is leading CEOs to discuss people challenges more and more at the boardrooms. 73 percent CEOs in India today spend more than one-fourth of their time directly on talent-related activities, and the focus is deemed to increase further next year (CEO as the Chief Talent Officer, People Matters - Monster.com Study 2011). This in turn will see a change in the way HR will operate in 2012 and onwards. As HR begins to work closely with the CEO, the HR team will be faced with new expectations. The time and focus of the HR teams will transform drastically to move away from the traditional recruitment, training & development, and performance management roles, and move towards analytics and metrics to actually measure how HRs contribution can affect business outcomes. From growth to globalization, cost pressure reduction to talent attraction, risk management to merger and acquisition support; HR will invariably transform itself to enable organizations to address todays business imperatives and prepare for tomorrows. HR teams will become leaner as most transactional activities of HR will be outsourced for more effective business delivery. The focus of these leaner team will be on

enabling the organization achieve its business strategy more closely than ever before. Therefore, 2012 will see HR teams striving towards equipping themselves with new competencies such as vendor management, and understanding of metrics and analytics.

Topics:
HR CHALLENGES IN THE INDIAN SOFTWARE INDUSTRY Talent identification and management Utility of hr in change management Human Resource Information System
Effectiveness of Performance Management Systems People Development Processes

Role of HRM Department in ERP

LEADERSHIP CHALLENGES IN INDIAN SOFTWARE INDUSTRY

employee Engagement

Challenging HR Projects for Interns Written after due diligence. Extremely Challenging ;)

Project Title: Benchmarking resourcing practices and streamlining internal processes Project Brief:Comprehensive study of resourcing practices in all consulates of the various embassies in India. The report should strictly deal with how the embassies recruit only and should have any reference to any internal resourcing practices in the organization

Key learning: Complete understanding of resourcing in the market Expectation from Intern/ MT: To work on own and to not expect anything

Project Title: Increasing employee engagement in the organization Project Brief:Understand how the compounder in the clinic is more committed to his doctor and how a joker is more committed to his circus, thus understanding the cognitive and emotive drivers of commitment and thereby reworking on the employee engagement model with suggestions for organizing different parties based on the model Key Learning: Increased academic excellence in mainstream psychology Expectation from Intern/ MT: Yearn to learn more on psychology

Project Title: Critical analysis of the existing PMS and its statistical correlation with bonus pay out Project Brief:Quantitative analysis of the usage of performance management system in the organization and the equivalent bonus paid out to 'top' performers in the organization thus corroborating that the potential/performance of an employee is rightly captured

Key Learning: Usage of statistical tools Expectation from Intern/ MT: Makes no judgments and opinions

Project Title: Making a diverse and all inclusive organization Project Brief:Detailed brochures of the various programs and initiatives that can be organized in the organization to ensure that women join the organzation and remain in the organization. This however should consider the approval of senior management (all male) of the company. Key Learning: Increased gender consciousness within Expectation from Intern/ MT: Have no biasness and to work with sincerity

Project Title: Remodeling the compensation structure in the organziation Project Brief:Extensive study of budget proposals and ensuring that the compensation structure is modelled in a way to provide maximum benefit to the government, by making each employee pay huge taxes and thus making the organization a socially responsible corporate and thus increasing the organizations CSR ratings Key Learning: Tax laws in India

Expectation from Intern/ MT: Excel skills. Work, work and work.
HR Challenges in the Indian Software Industry
Meenakshi Gupta, Department of Humanities and Social Sciences Software is a wealth and job creating industry, which has in just a few years, grown to US $ 1 trillion, employing millions of professionals worldwide. The Indian software industry has burgeoned, showing a nearly 50% compounded annual growth rate over the recent years. Being a knowledge-based industry, a high intellectual capital lends competitive advantage to a firm. Intellectual capital comprises human capital and intellectual assetsthe latter being any created bit of knowledge or expertise. With a global explosion in market-opportunities in the IT sector, the shortage of manpower both in numbers and skills is a prime challenge for HR professionals. The related issues are varied indeed: recruitment of world-class workforce and their retention, compensation and career planning, technological obsolescence and employee turnover. This article presents some of the findings of our recent research on the HR challenges posed by the IT sector. Workforce Retention and Motivation Retention and motivation of personnel are major HR concerns today. Peoplea Gartner group company specializing in management of human capital in IT organizationshas observed that the average tenure for an IT professional is less than three years. Further, the use of new technologies, the support of learning and training, and a challenging environment ranked higher than competitive pay structures as effective retention practices. Our own recent survey of 1028 software professionals from 14 Indian software companies, showed that while the professional gave importance to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction. Money was a prime motivator for 'starters', but for those into their third or fourth jobs, their value-addition to the organization was more important. Monetarily, offering 'the best salaries in industry' is the minimum every company is doing, apart from performance-based bonuses, long-service awards, and stock options. Many organizations frequently conduct employee satisfaction and organization climate surveys, and are setting up Manpower Allocation Cells (MAC) to assign 'the right project to the right person'. In fact, some are even helping employees with their personal and domestic responsibilities to satisfy & motivate their workforce! Attracting the Best Talent In a tight job market, many organizations often experience precipitous and simultaneous demands for the same kinds of professionals. In their quest for manpower, they are cajoling talent around the world. In such a seller's market, software companies are striving to understand which organizational, job, and reward factors contribute to attracting the best talentone having the right blend of technical and personbound skills. This would mean a knowledge of 'the tools of the trade' combined with conceptualization and communication skills, capacity for analytical and logical thinking, leadership and team building, creativity and innovation. The Indian software industry suffers from a shortage of experienced people such as systems analysts and project managers, and attracting them is a key HR challenge......more on next page

ompensation and Reward Increasing demands of technology coupled with a short supply of professionals (with the requisite expertise) has increased the costs of delivering the technology. This makes incentive compensation a significant feature, with the result that software companies have moved from conventional pay-for-time methods to a combination of pay-for-knowledge and pay-for-performance plans. With the determinants of pay being profit, performance and value-addition, emphasis is now on profit sharing (employee stock option plans) or performancebased pay, keeping in view the long-term organizational objectives rather than short-term production-based bonuses. Skills, competencies, and commitment supercede loyalty, hard work and length of service. This pressurizes HR teams to devise optimized compensation packages, although compensation is not the motivator in this industry. Being the best place to work with As with any other professional, what really matters to software professionals is selecting 'the best place to work with'which is what every company is striving to be. The global nature of this industry, and the 'project-environment' (as opposed to product environment) has added new cultural dimensions to these firms. In a value-driven culture, values are determined and shared throughout the organization. Typically, areas in which values are expressed are: performance, competence, competitiveness, innovation, teamwork, quality, customer service, and care and consideration for people. Flat structure, open and informal culture, authority based on expertise and ability rather than position, and flexi-timings are some of the norms software firms follow. The idea is to make the work place a 'fun place' with the hope of increasing loyalty and commitment. Coping with the Demand-Supply Gap Shortage of IT professionals is global in nature and not peculiar to the Indian software industry alone. W. Strigel, founder of Software Productivity Centre Inc. (1999) has projected the shortage of software professionals to be one million by 2006. In fact, a survey reports that 75 per cent of US companies planned to reengineer their applications using newer technologies, but found that 72 per cent of their existing stafflacked the skills needed in these technologies, and 14 per cent were not even re-trainable.

For India, it is predicted that in the year 2004 itself, the IT sector will need 1,95,000 professionals. This trend will continue, and in the year 2010 almost 3,70,000 IT professionals will be required (Strategic Review Reports, NASSCOM 1996-2001). Consequently, recruitment managers are exploring new sources of IT manpower from non-IT professional sectors, as well fresh, trainable science graduates. Integrating HR strategy with Business Strategy The strategic HR role focuses on aligning HR practices with business strategy. The HR professional is expected to be a strategic partner contributing to the success of business plans, which to a great extent depend on HR policies pertaining to recruitment, retention, motivation, and reward. The other major areas of concern for HR personnel in this context are, management of change, matching resources to future business requirements, organizational effectiveness, and employee development. .....more on next page
HR Challenges in the Indian Software Industry
Encouraging Quality and Customer focus Todays corporate culture needs to actively support quality and customer orientation. With globalization and rapid technological change, quality is of utmost importance for the Indian companies, which earn most of their revenues through exports. Hence, the HR professional as a strategic partner needs to encourage a culture of superior quality to ensure customer satisfactionthe only real measure of quality of a product or service. To be competitive today, an organization needs to be customer responsive. Responsiveness includes innovation, quick decision-making, leading an industry in price or value, and effectively linking with suppliers and vendors to build a value chain for customers. Employee attitudes correlate highly with customer attitude. The shift to a customer focus redirects attention from the firm to the value chain in which it is embedded. HR practices within a firm should consequently be extended to suppliers and customers outside the firm. Up-gradation of Skills through Re-training Rapid and unpredictable technological changes, and the increased emphasis on quality of services are compelling software businesses to recruit adaptable and competent employees. Software professionals themselves expect their employers provide them with all the training they may need in order to perform not only in their current projects, but also in related ones that they may subsequently hold within the organization. As observed by Watts Humphrey, Fellow of the Carnegie Mellon University, "as software professionals gain competence, they do not necessarily gain motivation. This is because a creative engineer or scientist who has learned how to accomplish something has little interest in doing it again. Once they have satisfied their curiosity, they may abruptly lose interest and seek an immediate change". And when the rate of technological change is highmay be higher than the time required to acquire competence in one areaprofessionals could undergo psychological turbulence owing to the need to work in a new technology throughout their career. They want to gain new knowledge, which will be utilized by their organization. On the basis of the new learning they want to work in higher segments of software value chain. Therefore, constant up-gradation of employee skills poses yet another challenge for HR personnel. In Conclusion With the advent of a work situation where more and more companies are having to concede that their valued employees are leaving them, a new concept of career and human resource management is bound to emerge. The focus of this new paradigm should not only be to attract, motivate and retain key 'knowledge workers', but also on how to reinvent careers when the loyalty of the employees is to their 'brain ware' rather than to the organization. With lifetime employment in one company not on the agenda of most employees, jobs will become short term. Today's high-tech employees desire a continuous up-gradation of skills, and want work to be exciting and entertaininga trend that requires designing work systems that fulfill such

expectations. As employees gain greater expertise and control over their careers, they would reinvest their gain back into their work. HR practitioners must also play a proactive role in software industry. As business partners, they need to be aware of business strategies, and the opportunities and threats facing the organization. As strategists, HR professionals require to achieve integration and fit to an organization's business strategy. As interventionists, they need to adopt an all-embracing approach to understanding organizational issues, and their effect on people. Finally, as innovators, they should introduce new processes and procedures, which they believe will increase organizational effectiveness.

HR CHALLENGES FOR THE IT INDUSTRY We are now living in knowledge society. We have also welcomed the new millenium with great fanfare and hope. We have to face broad challenges in this new millenium. We have experienced the growth of the manufacturing sector, ford assembly lines to the present emphasis on quality system. This millenium will certainly belong to convergence of IT, organisations have to leverage IT to get advantage in a highly competitive environment. We are having fast moving IT companies in this arena, they have shown their business excellence through optimum utilization of IT. This IT boom has introduced great challenges for this companies. Now the question is how to put in place & processes that should be in tume with IT revolution, how to strategize, compete with globalization. Perhaps this is the prime challenges for HR in the IT industry. The IT industry is a service industry. Here we have to provide quality service to individuals and organization. The IT companies have to be creative, innovative knowledgeable. This can be achieved through human capital. This will also determine the success of your organization. We have to manage through HR whose intellectual applications that will drive your business. Challenges for IT industry : 1. 2. 3. 4. 5. Recruitment planning Performance management Training and development Compensation management HRM as whole

1. Recruitment Planning :- Recruitment planning is most important component in new people management with special

reference to IT industry. We have to deal with human assets so it becomes important and have good quality of people in the organization. We have to take the recruitment planning in very serious manner to ensure that we can get best talent in the organisation. 2. Performance management :- Now the challenges how to manage the performance of your employees. You have to get right person in a organisation to manage your business. The challenge should be to create a performance culture where you can provide opportunities for enhance performance, where optimum performance becomes a way life. 3. Training and development :- This is another challenging area in IT industry. We have to chalk out a suitable strategy for training & development so that employees are well equipped to handle the challenges in advance. 4. Compensation management :- The IT industry is one of the high paying industry. This is very competitive industry, we have to attract best talent, offer best possible compensation package to the employees. Now IT companies are having ESOP with the compensation package. But the really challenge should be how we are able to incorporate all the subsystems in HR. Ultimately this would help the organisation for achieving exceptional performance. People have to be groomed to get in with the performance culture. We have to create an environment that stimulates the creation of knowledge, its sustenance will be the challenge for IT companies in the future. HR department can not function with traditional systems. Now the role will shift to HR facilitator, to facilitate change process. HR facilitator will have to involve the whole organisation in this process and act as a guide, coach, counselor and facilitator. Any organisation in the IT industry will have to face these challenges like Infosys, Satyam, Pentafour, DSQ Software, Micro soft India, Intel India. These IT companies are leaders in their own stride. They have excellent recruitment policies, huge data bank, placement agencies. They are also having rigorous tests to ensure that they can get high profile talent that will fit in their culture. They have best performance system that evaluates the organisation as whole. They have been able to tackle the quantum of performance with fairly efficient manner. The prime tasks for these IT companies is to build

corporate culture. They are diverting all the efforts to build performance driven culture. The major issue for these companies to get right man for right job. We have to find person with the required skills, experiences, mind sets, and also he must be suitable for these organisations. 5. Attrition and Retention :- IT companies are having high degree of attrition. The challenges for these companies is to keep this attrition rate as low as possible. Various companies adopt different techniques to retain their employees like high pay packets, ESOP, other benefits. So we have to keep this attrition rate as low as possible to retain super achievers.

Human Resource Challenges in Indian Software Industry Posted on January 7, 2011by eprojects4u Abstract :

India is an important player on the IT (Information Technology) map of the world. The unique characteristics of this industry pose many HR (Human Resource) challenges to the managers of this industry. A field study reveals that retention and motivation of software professionals tops the list of top ten HR challenges being faced by this industry.

The study attempts to investigate the issue of employee turnover in Indian software industry through a person-organisation fit (P-O fit) based turnover model, and attempts to fill a gap in HR literature as no systematic study has been conducted in the recent past on firms developing software for other user organisations. Although, the IT industry at present is reeling under slowdown, the data collected pertains to an emerging-industry context, and the findings may be viewed accordingly.

Managing aspirations Software professionals are professionally qualified and young knowledge workers with very high levels of ambition and aspiration. This is clearly indicated in the results; two such variables viz. career satisfaction and met expectations found strong support as predictors of employee turnover. Managing these aspirations, therefore, is an important dimension of attrition-control measure. Managing careers is not a challenge for HR professionals alone but a challenge for others concerned as well - line managers and top management. As role models, project managers, project leaders, group leaders or practice heads are people whom software professionals have the highest degree of interaction with as a member of the project team. These role models would have insights to individual differences among their teammates that no survey or assessment exercises can identify. Their role in managing and/or directing the careers of these people is, therefore, very important. As 'knower' of the strengths and weaknesses of their team members, they can give feedback on their (team members) training and development needs for skills or personality development. As assessors of the software professionals performance appraisal, these

leaders can convincingly tell them reasons behind the differences in their performance ratings, and have an open discussion on the same. As members of the higher management group, they can bring their team members' common concerns to the top managements attention help the management modify the respective policies as required. On the other hand, they are in the position to convey the vision, mission, and objectives of the company and their underlying rationale so as to increase the level of synergy between the team members organizational and personal goals. HR managers are the facilitators of various HR policies that meet the organizational strategy. As recruitment specialists, they can contribute significantly to the career management of software professionals. They can induct 'right' people in the company - whose career aspirations are in tune with the companies work and reward systems. They can identify people whose need for utilization of knowledge, skills, and abilities' are in tune with the kind of job-assignments they are being recruited for. More over, they can identify the income, advancement and growth needs of prospective candidates and attempt to select those

with high fit with the compensation and reward system of the company. In a pressure to recruit a large number of people (that the company requires), they need not make 'false promises' or paint a 'rosy picture that may later result in employees dissatisfaction. As performance managers, they can improve on a performance measurement system, as objectively as possible, upon discussion with the line managers. They need to clearly define the role for each position in the organisation, and communicate the positions to the new entrants respectively. They may formulate a reward system that is in tune with industry standards, and company's retention and performance strategy, and take local and overseas opportunities as factors of consideration. As facilitators of training and development activities, they may identify their teams individual training needs which may involve technological, behavioral or cross-cultural contents. As career counselors, they may develop different career paths - technical or managerial, and attempt to satisfy the needs of the software professionals. Top management, in defining the organization's vision, mission and strategy may clearly convey to

the line and HR managers its definition and expectation of those concerned. Its occasional support for all new and relevant HR initiatives may leads to better responsiveness to environmental conditions, thereby paving the way for increased levels of motivation, satisfaction and employee retention.

Managing Expectations is a great challenge for managers of software companies. The expectations arise not only after joining the company but also during a job interview. Unmet expectations in a previous organisation could result in a job change. These expectations are especially high in the case of software professionals because they are in a sellers market, while organizations are in a buyers. Again, like career management line managers, HR managers and members of the top management team need to play an important role in managing this aspect. E.g. the project manager may make all attempts to know of the software professionals expectations from the organisation in general, and from project manager himself in particular. This is due to the fact that people come with preconceived notions based on their experiences with organizations they have

worked in previously or otherwise. Similarly, HR managers can manage expectations right from the recruitment stage itself. Problems often result from mismatched expectations created at this early point in an individual's relationship with the company. Recruitment managers may, therefore, play the role of a good film director explaining to the actors what the film is all about, and what is expected of them. Clear communication with regards to technological and on-site opportunities, company's position on the value chain, company's future plans, ESOPs etc., as identified by the study, will help manage expectations to a large extent. The top management can help balance the needs of individuals with those of organizations. Clearly defined vision, mission, and organizational objectives can help line and HR managers articulate the firm's needs and expectations further. Managing fit The results reveal that person-culture (P-C) fit and person-job (P-J) fit are the two important variables that are closely related to employee turnover, the

former being the fit between personal beliefs and values of and individual whereas the later being the fit between the job challenges and achievement orientation of a person. Lack of these fits results in lower job satisfaction and consequently in employee turnover. Both these variables are highly relevant to software industry a people and skill intensive industry. Attaining high levels of fit starts right from the recruitment stage and HR managers need to devise the selection process accordingly. Impact of tight labour marketLabour market assumes immense importance in the context of software industry on account of acute global shortage of skilled professionals and Indian professionals being in demand in India as well as in many other countries. The study finds that on account of availability of large number of jobs in the market, the extrinsic satisfaction perceived by these professionals is less likely to lead in high turnover. Managing size and the start-up challenge The study incorporates 14 software organizations as sample organizations with high variance in size and maturity. Size here is a function of number of employees working in the company, whereas maturity relates to the number of years the

company is operating in the field of software development. Size is inseparable from growth in software industry, particularly in services the segment. With new organizational requirements (new customer segments, new technologies, new clients), it becomes necessary to add new members to the organisation. The study reveals that larger size and high maturity companies are more susceptible to employee turnover on account of low levels of satisfaction. Issues that managers of large software companies should address are:

More focused businesses Developing leaders at all levels Managing change Establishing open communication

Managers of matured software companies, too, need to respond to a great deal of challenges from the start-up firms on account of aggressive approach to recruitment, new technologies, high compensation, and foreign affiliation of start-up firms. Apart from the major findings and implications as described above, the following are challenges that managers in software companies need to address:

Retention Plan for High Stayers The Challenge of Foreign Visits The Challenge of Pay-Job Inequity among Application and Services Companies Coping with the Challenge of P-J Fit and Lack of Internal Opportunities among Systems Companies Threat of High External and Low Internal Job Opportunities among Product Companies Bridging the Perception-Gap between HR and Software Professionals on Turnover Reasons

Challenges of HR in IT Sector
By Savita Pathak
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This century has belonged to the manufacturing sector. Starting from the days of Fords assembly line to the present emphasis on quality systems. The next millennium will belong to the convergence of Information Technology. How organisations are able to leverage IT to get advantage in a highly competitive market will be the key to success. Leading the way would be the organisations which are in the IT industry. These are the ones which have shown that the quickest way to business excellence would be through optimum utilisation of IT.

The IT boom has brought with it, its own set of challenges to organisations. How to put in place systems and process that are in tune with the IT revolution, how to strategies and compete in the IT era? etc. But a major challenge that the IT industry per se has been facing is in the field of Human Resource Management. The IT industry is a service industry. How well are you able to offer quality service to individuals and organisations will determine the success of your organisation. This leads us to the fact that the creativity, innovativeness, knowledge and skill of your employees are your important assets. How you are able to manage these assets is the challenge that the IT industry is facing. It is not capital or finance or marketing management that gives the competitive edge but rather how well you are able to manage your human resources whose intellectual applications drive your business. Recruitment has become an important sub system in HR especially in the IT industry. When your major asset are your Human Resources, it is important that quality people join your organisation. How you are able to fine tune your recruitment process in a manner that you are able to get the best talent available and how well you have been able to put systems in place so that the people that you recruit are a perfect fit for the job and the organisation is one of the major challenges. The challenge does not stop with recruiting the right person but with how you are going to manage the performance of your employees. The challenge would be to create a performance culture wherein opportunities are provided for enhanced performance and where giving out optimum performance becomes a way of life. Training & and Development is another area where challenges arise. In the IT industry training takes a new connotation. It will not be just identifying training needs and giving the required training. It is foreseeing and anticipating the requirements and develop suitable training so that the employees are well equipped to handle the challenges forehand.The IT industry is one of the high paying industries. Since it is also very

competitive, vying with each other to attract the best talent, offering the best possible compensation package to their employees is in itself a challenge. But the real challenge would be how we are able to incorporate all the sub systems in HR and help them in achieving the ultimate goal exceptional performance. In a high performance driven industry like IT, this becomes all the more important. People have to be groomed to get in tune with the performance culture. Creating an environment that stimulates the creation of knowledge, its sustenance and its dissipation throughout the organisation will be the challenge for organisations in the future. How to go about doing this will fall on the HR department. No longer will the HR department carry on with its traditional functions. That will take care by Human Resource Information Systems that will be put in place. The function would be to build and sustain a performance driven culture. The role will shift to that of a facilitator. Facilitate the process of change, for change would be the only thing that will be constant in the future. HR will have to involve the whole organisation in this process and act as a guide, counselor and facilitator. In the future the competitive edge that the organisations will get will only be through their human resources. How organisations are able to manage them, will determine whether they will run the race or be left behind. HOW THESE CHALLENGES HAVE AFFECTED US : Any organisation in the IT industry will have to face these challenges.We are leaders in the industry. And the reason we are leaders is of the fact that we have been able to meet these challenges quite effectively. As far as recruitment is concerned we have been able to address the issue effectively. We have an excellent databank where updating takes place on a daily basis. This serves as the major chunk that addresses our recruitment needs. Further we also use the services of placement agencies. The real catch lies in our selection process. All the probable candidates have to go through a battery of tests that not only test their technical skills but their all round personality to find out if they will fit into the job as well as into our organisations culture. The rigorous selection process ensures that we get people who will fit into a culture that is our

own. But this challenge of recruiting the right person is a continuos one and one that needs continuos refinement. Performance management is a practice that few organisations follow. We happen to be one of them. We have put in place a system that evaluates the organisation as a whole, the systems and processes that are followed in our organisation and the performers. This is done on a contineous basis and the feedback is passed on to the concerned people to take corrective measures. Thus we have been able to tackle the question of performance in a fairly efficient manner and the quality of our services serve as a testimony for this. In the software industry where skill reduncy is very fast there is this need for giving technical training to the employees on a continuos basis. We are one of the very few who provide our employees with the opportunity to get trained on various platforms. This apart from keeping our employees highly skilled, also gives them a sense of security. Apart from this, training is also given in personality development, team working related areas etc to enhance the quality of life of our employees. As discussed earlier the most important of all challenges is in culture building. Now all our efforts are diverted in bringing about a performance driven culture. The very tight schedule ensures that our employees have to perform to the optimum. Apart from this the various systems that we have put in place like the performance management system helps us to work towards achieving a performance driven culture. We are constantly refining our practices in order create an atmosphere where our employees are able to perform to their full potential. MAJOR ISSUES FACED IN RECRUITMENT, ATTRITION AND RETENTION: - RECRUITMENT: The major issue would be of getting the right type of person. The issue would be that we first have to find a person with the required skills and experience, and also he must be suitable for our organisation. Finding such a suitable person is the obstacle that we will have to cross over.

- ATTRITION AND RETENTION: Software is one of the industry with the highest attrition rate. The challenge facing software companies is how to keep this as low as possible. Various companies adopt different techniques to retain their employees. Most of them offer exorbitant pay packets. But the attrition rate is low compared to industry standards. Though our compensation has been on par with what the industry is offering, that's not the reason why our rate is low. It has to do with the opportunities that are offered to our employees and organisational climate prevailing here. Our employees are given the opportunity to learn and grow in the company itself. They are given a lot of technical training and exposure to various types of project. The challenging work makes it difficult to leave our organisation. - WORK FORCE RETENTION AND MOTIVATION Retention and motivation of personnel are major HR concerns today. People in management of human capital in IT organizations has observed that the average tenure for an IT professional is less than three years. Further, the use of new technologies, the support of learning and training, and a challenging environment ranked higher than competitive pay structures as effective retention practices. Our own recent survey of 1028 software professionals from 14 Indian software companies, showed that while the professional gave importance to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction. Money was a prime motivator for 'starters', but for those into their third or fourth jobs, their value-addition to the organization was more important. Monetarily, offering 'the best salaries in industry' is the minimum every company is doing, apart from performance-based bonuses, long-service awards, and stock options. Many organizations frequently conduct employee satisfaction and organization climate surveys, and are setting up Manpower Allocation Cells (MAC) to assign 'the right project to the right person'. In fact, some are even helping employees with their personal and domestic responsibilities to satisfy & motivate their workforce!

- ATTRECTING THE BEST TALENT In a tight job market, many organizations often experience precipitous and simultaneous demands for the same kinds of professionals. In their quest for manpower, they are cajoling talent around the world. In such a seller's market, software companies are striving to understand which organizational, job, and reward factors contribute to attracting the best talent one having the right blend of technical and person-bound skills. This would mean a knowledge of 'the tools of the trade' combined with conceptualization and communication skills, capacity for analytical and logical thinking, leadership and team building, creativity and innovation. The Indian software industry suffers from a shortage of experienced people such as systems analysts and project managers, and attracting them is a key HR challenge. - COMPENSATION AND REWARD Increasing demands of technology coupled with a short supply of professionals (with the requisite expertise) has increased the costs of delivering the technology. This makes incentive compensation a significant feature, with the result that software companies have moved from conventional pay-for-time methods to a combination of pay-forknowledge and pay-for-performance plans. With the determinants of pay being profit, performance and value-addition, emphasis is now on profit sharing (employee stock option plans) or performance-based pay, keeping in view the long-term organizational objectives rather than shortterm production-based bonuses. Skills, competencies, and commitment supersede loyalty, hard work and length of service. This pressurizes HR teams to devise optimized compensation packages, although compensation is not the motivator in this industry. - ENCOURAGING QUALITY AND CUSTOMER FOCUS Today`s corporate culture needs to actively support quality and customer orientation. With globalization and rapid technological change, quality is of utmost importance for the Indian companies, which earn most of their revenues through exports. Hence, the HR professional as a strategic

partner needs to encourage a culture of superior quality to ensure customer satisfaction. To be competitive today, an organization needs to be customer responsive. Responsiveness includes innovation, quick decision-making, leading an industry in price or value, and effectively linking with suppliers and vendors to build a value chain for customers. Employee attitudes correlate highly with customer attitude. The shift to a customer focus redirects attention from the firm to the value chain in which it is embedded. HR practices within a firm should consequently be extended to suppliers and customers outside the firm. Where HR can add the most value - Start the culture conversation at all levels. One way to accomplish this is to conduct a cultural assessment or audit of your organisation through employee surveys, focus groups or interviews. Review your organisational history, leadership styles, HR programming and industry practices to determine what currently drives and reinforces the culture. Finally, what is your customer experience? What cultural elements are obvious to customers? Is culture aligned with business strategy? What needs to change? This can be the basis for healthy discussion at team meetings and employee chat sessions. - Develop a business case for cultural change. Why is the change needed? How will desired changes in culture support the business strategy? - Work with the senior leadership team to determine the desired culture. Core values, desired behaviours and shared vision are essential for a positive culture change effort to succeed. Every leader must embrace the need to change. - Develop an agenda or action plan for enhancing the culture or bringing about change. Start with the highest priorities and work on the toughest issues. For your culture to become self replicating, the way things are done will have to reinforce the core values and the culture. - Communicate what needs to change and why. Solicit input from people. Once the needed changes and process for change is defined,

tell people what is expected. What are the rewards for changing, and the consequences for more of the same. - Change the organisational structure to enable change. Find new ways to accomplish work tasks. Use teams for one-time projects. Broaden roles and responsibilities. - Acquire talent based on cultural fit. Identify the characteristics of people who exhibit those behaviours that you've identified as desirable. The people who fit and thrive in your culture will perpetuate that culture in everything they do. If you have to choose between the candidate who has better skills or knowledge but doesn't fit, and a candidate who is slightly less qualified but fits culturally, choose the slightly less qualified person and provide the necessary training or on-the-job experience. Get rid of those who don't fit in the culture. - Redesign your on-boarding process. Make sure that every new hire knows what it will take to fit in, and understands the cultural imperatives. Talk about the ways of working that lead to success and those that will derail careers. Create legendary stories of successes and failures. - Create cultural messages. Be sure that every meeting, every training program, every communication to people includes cultural messaging and reinforces the values, mission, traditions and practices. - Involve everyone. Southwest Airlines has a culture committee, but there are many ways to get people involved. Try focus groups around topics. Form cross functional teams. Call random groups of employees together for monthly breakfast or lunch meetings. Engage the help and support of a group of passionate, committed people to identify cultural disconnects and recommend remedies. - Build an internal brand that supports the external brand. Make a promise to deliver a consistent employee experience. Be sure that your employees know the differentiating elements in their experience in the organisation that will enhance their work lives and careers. Begin to create an employer of choice reputation internally and externally.

- Recognise and reward results. Your recognition and rewards should support the culture that you are working to reinforce. - Cultivate leaders who promote your culture. Develop excellent leaders who will propel the culture down the ranks. Identify high potential leaders and promote them. Invest in leadership development programs. Be sure content reinforces cultural messages. Keep the good ones, and get rid of those who are unable to pass the culture on. - Make it interesting and fun. Create contests, activities that enhance the culture. Decorate the office in inspiring ways. Celebrations and events can reinforce the message. - Use of HR tools. Something as mundane as the annual benefits enrollment can be a source of key cultural messages. Every training class should reinforce the basic behaviors and values that reinforce the culture. Performance review forms should measure cultural fit, as well as, job performance. - No one should be locked out of the efforts to build a high-performance culture. Culture has to become the DNA that forms the building blocks over everything else. So the entire organisation must have a role in keeping it alive. Work with corporate communications, advertising, and marketing to capture the culture messages and tout these internally and externally. With lifetime employment in one company not on the agenda of most employees, jobs will become short term. Today's high-tech employees desire a continuous up-gradation of skills, and want work to be exciting and entertaining a trend that requires designing work systems that fulfill such expectations. As employees gain greater expertise and control over their careers, they would reinvest their gain back into their work. HR practitioners must also play a proactive role in software industry. As business partners, they need to be aware of business strategies, and the opportunities and threats facing the organization. As strategists, HR professionals require to achieve integration and fit to an organization's business strategy. As interventionists, they need to adopt an all-

embracing approach to understanding organizational issues, and their effect on people. Finally, as innovators, they should introduce new processes and procedures, which they believe will increase organizational effectiveness. With the advent of a work situation where more and more companies are having to concede that their valued employees are leaving them, a new concept of career and human resource management is bound to emerge. The focus of this new paradigm should not only be to attract, motivate and retain key 'knowledge workers', but also on how to reinvent careers when the loyalty of the employees is to their 'brain ware' rather than to the organization.
Human Resource Challenges & Practices in IT Industry Rakesh S. Patil 1 , Varsha Patil 2 and Pratibha Waje 3 1 Head and 3 Lecturer 1,3 Sir Visvesvaraya Institute of Technology, Chincholi (Sinner) Nashik-422 101 (MS) 2

SNG Institute of Management & Technology, Rajgurunagar, Pune (MS) 1 rakeshspatil@yahoo.com and 2 virajrpatil@gmail.com ABSTRACT The need of organizations for people and people for organizations will be more difficult to satisfy in the todays competitive business environment. Organizations competitive advantage could be generated from human resources (HR) and organization performance is influenced by a set of effective HRM practices. Software is a wealth and job creating industry, which has in just a few years, grown to US $ 1 trillion, employing millions of professionals worldwide. The Indian software industry has burgeoned, showing a nearly 50% compounded annual growth rate over the recent years. Being a knowledge-based industry, a high intellectual capital lends competitive advantage to a firm. With a global explosion in market-opportunities in the IT sector, the shortage of manpower both in numbers and skills is a prime challenge for HR professionals. The related issues are varied indeed:

recruitment of world-class workforce and their retention, compensation and career planning, technological obsolescence and employee turnover. This paper explains the HR challenges and practices in software Industries. KEYWORDS HRM, IT,HR Strategy, Services 1. INTRODUCTION The economy has transitioned to what some call The Age of Information- an economy in which gross domestic product is increasingly dominated by services. Services permeate every aspect of our lives. We use transportation services; restaurant services; hotels; electricity and telephones; postal, courier and maintenance services; services of hairdressers; services of public relations and advertising firms; lawyers; physicians; dentists; stockbrokers and insurance agents; movie theatres; and swimming pools .When we do buy goods, such as new car or a washing machine, we often still rely on services to keep them running and repair them when they break down. Services allow us to budget our time as well as our money. The twentieth century was the age of machine; the twenty-first century will be the age of people Buzzwords like globalization, empowerment, cross functional

teams, downsizing, learning organizations and knowledge workers are changing the way of life of managers and the way they manage people. 2. STRATEGIES & POLICIES OF SOFTWARE INDUSTRIES: 1. Motivation & Retention of Employees Retention and motivation of personnel are major HR concerns today. People a Gartner group company specializing in management of human capital in IT organizations has observed that the average tenure for an IT professional is less than three years. Further, the use of new technologies, the support of learning and training, and a challenging environment ranked higher than competitive pay structures as effective retention practices. Our own recent survey of 1028 software professionals from 14 Indian software companies, showed that while the professional gave importance to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction. Money was a prime motivator for 'starters', but for those into their third or fourth jobs, their value-addition to the organization was more important. Monetarily, offering 'the best salaries in industry' is the

minimum every company is doing, apart from performancebased bonuses, long-service awards, and stock options. Many organizations frequently conduct employee satisfaction and organization climate surveys, and are setting up Manpower Allocation Cells (MAC) to assign 'the right project to the right person'. In fact, some are even helping employees with their personal and domestic responsibilities to satisfy & motivate their workforce! 2. Best Talent Attraction In a tight job market, many organizations often experience precipitous and simultaneous demands for the same kinds of professionals. In their quest for manpower, they are cajoling talent around the world. In such a seller's market, software companies are striving to understand which organizational, job, and reward factors contribute to attracting the best talent one having the right blend of technical and person-bound skills. This would mean a knowledge of 'the tools of the trade' combined with conceptualization and communication skills, capacity for analytical and logical thinking, leadership and team building, creativity and innovation. The Indian software industry suffers from a shortage of experienced people such as systems analysts and project managers, and attracting them is a

key HR challenge. 3. Compensation and Reward Increasing demands of technology coupled with a short supply of professionals (with the requisite expertise) has increased the costs of delivering the technology. This makes incentive compensation a significant feature, with the result that software Proceedings of the 5 th National Conference; INDIACom-2011 Copy Right INDIACom-2011 ISSN 0973-7529 ISBN 978-9380544-00-7 companies have moved from conventional pay-for-time methods to a combination of pay-for-knowledge and payforperformance plans. With the determinants of pay being profit, performance and value-addition, emphasis is now on profit sharing (employee stock option plans) or performance-based pay, keeping in view the long-term organizational objectives rather than short-term production-based bonuses. Skills, competencies, and commitment supercede loyalty, hard work and length of service. This pressurizes HR teams to devise optimized compensation packages, although compensation is not the motivator in this industry. 4. Increasing loyalty and commitment

As with any other professional, what really matters to software professionals is selecting 'the best place to work with', which is what every company is striving to be. The global nature of this industry, and the 'project-environment' has added new cultural dimensions to these firms. In a value-driven culture, values are determined and shared throughout the organization. Typically, areas in which values are expressed are: performance, competence, competitiveness, innovation, teamwork, quality, customer service, and care and consideration for people. Flat structure, open and informal culture, authority based on expertise and ability rather than position, and flexi-timings are some of the norms software firms follow. The idea is to make the work place a 'fun place' with the hope of increasing loyalty and commitment. 5. The Demand Supply Gap Shortage of IT professionals is global in nature and not peculiar to the Indian software industry alone. W. Strigel, founder of Software Productivity Centre Inc. (1999) has projected the shortage of software professionals to be one million by 2006. In fact, a survey reports that 75 per cent of US companies planned to reengineer their applications using newer technologies, but found that 72 per cent of their existing staff lacked the skills

needed in these technologies, and 14 per cent were not even retrainable. Graph No. 1. Annual demand for IT Professionals For India, it is predicted that in the year 2004 itself, the IT sector will need 1,95,000 professionals. This trend will continue, and in the year 2010 almost 3,70,000 IT professionals will be required (Strategic Review Reports, NASSCOM 19962001). Consequently, recruitment managers are exploring new sources of IT manpower from non-IT professional sectors, as well fresh, trainable science graduates. 6. Integrating HR strategy with Business Strategy The strategic HR role focuses on aligning HR practices with business strategy. The HR professional is expected to be a strategic partner contributing to the success of business plans, which to a great extent depend on HR policies pertaining to recruitment, retention, motivation, and reward. The other major areas of concern for HR personnel in this context are, management of change, matching resources to future business requirements, organizational effectiveness, and employee development. 7. Encouraging Quality and Customer focus Todays corporate culture needs to actively support quality and

customer orientation. With globalization and rapid technological change, quality is of utmost importance for the Indian companies, which earn most of their revenues through exports. Hence, the HR professional as a strategic partner needs to encourage a culture of superior quality to ensure customer satisfaction, the only real measure of quality of a product or service. To be competitive today, an organization needs to be customer responsive. Responsiveness includes innovation, quick decision-making, leading an industry in price or value, and effectively linking with suppliers and vendors to build a value chain for customers. Employee attitudes correlate highly with customer attitude. The shift to a customer focus redirects attention from the firm to the value chain in which it is embedded. HR practices within a firm should consequently be extended to suppliers and customers outside the firm. 8. Value Addition training for up-gradation of Skills Rapid and unpredictable technological changes, and the increased emphasis on quality of services are compelling software businesses to recruit adaptable and competent employees. Software professionals themselves expect their employers provide them with all the training they may need in

order to perform not only in their current projects, but also in related ones that they may subsequently hold within the organization. As observed by Watts Humphrey, Fellow of the Carnegie Mellon University, "as software professionals gain competence, they do not necessarily gain motivation. This is because a creative engineer or scientist who has learned how to accomplish something has little interest in doing it again. Once they have satisfied their curiosity, they may abruptly lose interest and seek an immediate change". And when the rate of technological change is high may be higher than the time required to acquire competence in one area professionals could undergo psychological turbulence owing to the need to work in a new technology throughout their career. They want to gain new knowledge, which will be utilized by their organization. On the basis of the new learning they want to work in higher segments of software value chain. Therefore, constant up-Human Resource Challenges & Practices in IT Industry Copy Right INDIACom-2011 ISSN 0973-7529 ISBN 978-9380544-00-7 gradation of employee skills poses yet another challenge for HR personnel. 3. CHALLENGES FOR IT INDUSTRY: The main challenges to the IT Industry are

i. Recruitment planning ii. Performance management iii. Training and development iv. Compensation management v. HRM as whole 1. Recruitment Planning: Recruitment planning is most important component in new people management with special reference to IT industry. We have to deal with human assets so it becomes important and have good quality of people in the organization. We have to take the recruitment planning in very serious manner to ensure that we can get best talent in the organization. 2. Performance management: Now the challenges how to manage the performance of your employees. You have to get right person in a organization to manage your business. The challenge should be to create a performance culture where you can provide opportunities for enhance performance, where optimum performance becomes a way life. 3. Training and development: This is another challenging area in IT industry. We have to chalk out a suitable strategy for training & development so that

employees are well equipped to handle the challenges in advance. 4. Compensation management: The IT industry is one of the high paying industries. This is very competitive industry, we have to attract best talent, offer best possible compensation package to the employees. Now IT companies are having ESOP with the compensation package. But the really challenge should be how we are able to incorporate all the subsystems in HR. Ultimately this would help the organization for achieving exceptional performance. People have to be groomed to get in with the performance culture. We have to create an environment that stimulates the creation of knowledge, its sustenance will be the challenge for IT companies in the future. HR department cannot function with traditional systems. Now the role will shift to HR facilitator, to facilitate change process. HR facilitator will have to involve the whole organization in this process and act as a guide, coach, counselor and facilitator. Any organization in the IT industry will have to face these challenges like Infosys, Satyam, Pentafour, DSQ Software, Micro soft India, Intel India. These IT companies are leaders in their own stride. They have excellent recruitment policies, huge data bank, and

placement agencies. They are also having rigorous tests to ensure that they can get high profile talent that will fit in their culture. They have best performance system that evaluates the organization as whole. They have been able to tackle the quantum of performance with fairly efficient manner. The prime tasks for these IT companies are to build corporate culture. They are diverting all the efforts to build performance driven culture. The major issue for these companies to get right man for right job. We have to find person with the required skills, experiences, mindsets, and also he must be suitable for these organizations. 5. Attrition and Retention: IT companies are having high degree of attrition. The challenges for these companies are to keep this attrition rate as low as possible. Various companies adopt different techniques to retain their employees like high pay packets, ESOP, other benefits. So we have to keep this attrition rate as low as possible to retain super achievers. CONCLUSION With the advent of a work situation where more and more companies are having to concede that their valued employees

are leaving them, a new concept of career and human resource management is bound to emerge. The focus of this new paradigm should not only be to attract, motivate and retain key 'knowledge workers', but also on how to reinvent careers when the loyalty of the employees is to their 'brain ware' rather than to the organization. With lifetime employment in one company not on the agenda of most employees, jobs will become short term. Today's hightech employees desire a continuous up-gradation of skills, and want work to be exciting and entertaining a trend that requires designing work systems that fulfill such expectations. As employees gain greater expertise and control over their careers, they would reinvest their gain back into their work. HR practitioners must also play a proactive role in software industry. As business partners, they need to be aware of business strategies, and the opportunities and threats facing the organization. As strategists, HR professionals require to achieve integration and fit to an organization's business strategy. As interventionists, they need to adopt an allembracing approach to understanding organizational issues, and their effect on people. Finally, as innovators, they should introduce new processes and procedures, which they believe

will increase organizational effectiveness REFERENCES [1]. Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Patrick, P.M. (2007) Human Resource Management: Gaining aCompetitive Advantage, Tata McGraw-Hill, New Delhi. [2]. Prasad, K. (2005) Strategic Human Resource Management: Text and Cases, Macmillan India Ltd., New Delhi. [3]. Kandula,Srinivas R.(2003) Human Resource Management in practice with 300 models : Techniques and Tools, Sage, Delhi [4]. Rao T.V., Rao Raju, and Yadav Tara. (2001). A Study of HRD concepts, structure of HRD Proceedings of the 5 th National Conference; INDIACom-2011 Copy Right INDIACom-2011 ISSN 0973-7529 ISBN 978-9380544-00-7 departments, and HRD practices in India, Vikalpa, ol 261, No. 1, Jan.-Mar Page 49-62. [5]. Siekel Tom. (2002). After CRM, its ERM: Employee Relationship Management Indian

Management, Vol. 41, Issue 9, July p. 38 [6]. Storey J. (ed.) (1989). New Perspectives in Human Resource Management, Routledge, London, p. 114. [7]. Truss Catherine. (2001). Shifting the paradigm in Human Resource Management: From the resource based view to complex adaptive system. Published in a Research Paper on Human Resource Management by Kingston Business School, Kingston University [8]. Thite, M. (2004) Managing People in the New Economy: Targeted HR Practices that Persuade People to Unlock their Knowledge Power, Response Books, New Delhi. [9]. Truss, C. (2001) Complexities and Controversies in Linking HRM with Organizational Outcomes Journal of Management Studies, Vol.38, No.8. [10]. Walker, J.W. and Stopper, W.G. (2000) Developing Human Resource Leaders Human Resource Planning, Vol.23, No.1, p.38-44. [11]. Webb, J. (2004) Putting Management Back into Performance: A Handbook for Managers and

Supervisors, Allen & Unwin, Australia. [12]. Joynt, P. and Morton, B. (2005) The Global HR Manager: Creating the Seamless Organization, Jaico Publishing House, Mumbai. [13]. Jyothi, P. and Venkatesh, D.N. (2006) Human Resource Management, Oxford University Press, New Delhi. [14]. Kandola, R. and Fullerton, J. (1994) Managing the Mosaic: Diversity in Action, IPD, London. [15]. Kandula, S.R. (2004), Human Resource Management in Practice: With 300 Models, Techniques and Tools, Prentice Hall of India Private Limited, New Delhi.

Typical Issues in IT company pertaining to HR

Typically and generally the software engineers are more concerned types. More concerned with broader organizational issues than perhaps employees of other industries for such issues. In addition to the issues that impacts them directly. This makes managing the IT Company a bigger challenge for management than managing other industries. This challenge is of a unique kind. The uniqueness can be assessed by knowing and understanding some of the peculiarly typical issues faced by the IT industry management. Some of these are reflected below, as quotes within the text. These are real issues brought up by people to the management and I have been privy to the information during my continued association with IT industry of several years. And believe me these issues represent only the tip of the iceberg. Let me now take the broader ones, one by one. Communication and vision In other industries rarely management may have to answer questions that may be asked by employees as they do in this industry. Here is a bunch some of whom may even have just left the college, who is not only concerned with who the customers are but also why. It is normal to be faced with a question as to "What is the vision of the company and where are we going" and "Where is the new business coming from". If you do not tell them, for whatever reasons, you are sure to face the belief in the company that the "Communication to juniors is haphazard" and also an allegation that there is a "Lack of transparency between management and juniors" When it comes to working, management is faced by another typical situation. That of: "People are isolated from each other". This is as typically complained by the same very people who also say that there is a very "Little communication across teams" Excessive project pressures This is an industry that is perhaps the best example of being customer centric and customer driven. This is much beyond than just being customer focussed. Perhaps this is the only industry that faces so

much of direct pressure due to customer commitments. Employees feel "Mass slogging is there because of unrealistic assumptions at the time of striking the project deal". Most owner-managers are professionals. Many of those who have pioneered this industry are first generation industrialists. To back them is perhaps their own or hired talent. With sky high salaries and operating expenses, the burn rate is much higher in this industry. Managing this industry is keeping oneself on toes all the time. The business developer is perhaps under tremendous pressure to get business. In most cases, the company may not have the traditional industry treasury to support survival in the lean or investment phase. To keep the company going it has to have business. Even venture capital funded companies need business. After all, where do the competition fattened salary packets, incentives, the individual/shared cab drops, the Pizzas, the picnics, the 5 star parties, joining bonuses, the car loan interests, housing loan interests, spouse foreign travel, the complete medical coverage for self and family, dating allowances, ..., the list of benefits goes on and on, come from? When the business development persons hard sells, and gets the business, "It appears Saturday/ Sunday are included in project plan!" Of course, " It is assumed that late staying is a norm". It is a fact that Computers are magic magnets. They have a capacity to keep the engineers glued to them. But there are limits. "If some one has been continuously working for two weeks, the employee should be allowed to take a day off without marking leave". There is no personal time. "My daughter is now 3 feet long". People also often ask "Will we get compensatory leave for extra work on Saturday/ Sunday/ Company holidays?" I have heard people complain that "I have not gone shopping for last six months" or that "I have not gone for a movie in 4 months". People have begged for "At least some time to relax"! Indian software companies are getting business for sure, but at what cost. At whose costs!

To top it all, engineers do not always get to work in their own field of interest "At least feedback should be taken from us software developers before allocating us to a project" The story just does not end here. There is a peculiar dichotomy. This breed is hard to obtain, and much more difficult to harness. The employer hired the talent to assuming that s/he will assume responsibility. Whereas, the engineer feels "There are no senior persons for guidance and review of my work". An engineer recalled, "My best moments were when xyz explained how to make the software work that did not earlier". Thus is not confident and may not want to take on responsibility. Further, typically Customer is also not in the comfort zone with the young talent. A higher Customer Confidence level is essential for more business from the same customer. To reach a higher customer confidence level, "Responsibilities to the juniors are not there". Employers typically find the software breed difficult to find. Much more difficult to keep. Salaries, incentives and benefits are not treated confidential. "Lots of disparity in salaries" are there is as alleged by the knowledgeable engineers. "At entry level there are discrepancies based on individuals' bargaining strength". They generally complain that "Those interviewed and selected by ...(The US Boss usually) have an advantage in salaries" "No formal policy seems to be there" and "If you are working on xyz's project... ...(The US Boss usually) you are termed as useful". All such things create discontent. The job for the HR becomes tougher in IT Companies. While the corporates plan and charter out a limited and focussed role for their HR departments, that of hiring, while the expectations of people suggest that "The Company should concentrate on retaining first, others will automatically join". Therefore, it is common to hear that "After first day the employees are left to themselves" and that the "Processes are not in place" or that "Career planning is not there" and "Promotions to be based on the length of service with the company". Still further, "People do not know

where to go and talk out their concerns" or that there is "No channel for problem solving/ grievance handling". "We don't have transport arrangement for late sitting". With HR placed at whatever level the Industry has made it to be placed as, it still remains receiver of information from the employees. Information that pertains to Technology that the company may be working in, "Why are we working in this xyz technology while the world has switched to zyx" or a complaint that "Tools are not adequate". When the feed back reaches and sits with the management, people soon come to realize that "Nothing will happen even if feedback is given in writing" raising another typical situation of the IT industry of that of "No delegation of authority from the corporate and also no spirit for taking on empowerment". In house projects a bane or boon Business may not always be on the boom. The company does not have enough work as of now and to keep the software engineers busy they are put on in house development work". The management uses this tool as a makeshift arrangement and as an escape and filler only to keep employees busy and not loose them as any way, people are most unstable as they finish up a project and are transitioning to the other one. The moment some other revenue-earning project comes to the company, this in house development work is put on the back burner. Whether this makes a business sense is debatable but it is terribly demotivating for the developers. They know and have a feeling that nothing may come out of the efforts that they are putting in developing for in-house project. To top it all, a typical IT Management treats software development as a cost center. And because of the in-house development work such projects only add to the costs. These costs become costlier if the employee puts in half hearted effort or that the project is not driven the way it would if it was a customer project. Managing this mindset of the developers and the managers is another real challenge that the IT HR faces. Whether the department is designed to, or even is equipped to handle/ manage or focus to take on this call, is a separate issue.

And last, but not the least, what so ever the company may do, there is no simple answer to "My H1 was applied before joining and I have to fly next Wednesday!" CHALLENGES IN INDIAN SOFTWARE INDUSTRY: AN EMPIRICAL STUDY OF EMPLOYEE TURNOVER

Abstract: India is an important player on the Information Technology (IT) map of the world. The unique characteristics of this industry pose many Human Resource (HR) challenges to the managers of this industry. A field study reveals that 'retention and motivation of software professionals' tops the list of top ten HR challenges being faced by this industry.The study attempts to investigate the issue of employee turnover in Indian software industry through a personorganisation fit (P-O fit) based turnover model, and attempts to fill a gap in HR literature as no systematic study has been conducted in the recent past on firms developing software for other user organisations. Although, the IT industry at present is reeling under slowdown, the data collected pertains to an emerging-industry context, and the findings may be viewed accordingly. Rather than looking at the turnover phenomenon directly, it is analysed through overall satisfaction (OS) as it gives more insight into various organisational factors like HR policies, job factors etc. and help draw conclusions with far more implications. The main antecedent of turnover behaviour is, therefore, OS, which is a consequence of a combined effect of person-culture (P-C) fit, person-job (P-J) fit, career satisfaction (CS), met expectations (ME), perceived ease of internal movement (PEM-I), and perceived ease of external movement (PEM-X). The study was undertaken in 14 software firms

in which 1028 people participated. Qualitative analysis, in addition to the quantitative analysis, helped in an in-depth understanding of turnover phenomenon. The model developed for the study is validated, establishing the relevance of the above variables to software industry. Contrary to the hypothesis, the high availability of jobs in labour market does not affect the OS, but its component the extrinsic satisfaction and software (ES) does. Size, to maturity the of the organisation, segment which software

professionals belong emerge as important organisational variables that affect turnover phenomenon. The focus of Chapter 2 is to explore literature pertaining to the issue of employee turnover and identify various turnover-causing factors in general, as well as those specific to software professionals. Further, a conceptual framework for the study of employee turnover is discussed with reference to the interactional psychology-based person-organisation (P-O) fit model. It also describes various hypotheses being tested. Chapter 3 discusses the research methodology being used, the samples being tested and their distribution by various criteria. Validation of conceptual model and testing of hypotheses through analysis of variance (ANOVA), correlation analysis, independent sample t-test, and regression analysis are reported in Chapter 4. It also reports content analysis of data that was collected through qualitative techniques viz. interviews and focus discussions. The results of the data-analysis are discussed in Chapter 5. The overall contribution of the study, its implications for the practising managers, the limitations of the study and direction for future research are described in Chapter 6. Key Words: motivation, retention, employee

turnover, HR challenges, software professional, P-O fit, P-C fit, P-J fit, software industry, IT industry.