Feature

Keeping the brand, maintaining the goodwill

In order to maintain their brand name and kepe the goodwill intact, companies are emphasizing on transparent systems wherein any decision needs to be communicated at all the levels, writes Nivedan Prakash

In this time of economic downturn, where employees are being handed out pink slips or there are minimal monetary benefits, it is imperative for companies to justify their actions. No organization would like to part ways with an employee on whom they have invested time, effort and resources, to hire, train and then employ them. However, in a downturn or in a strong economy, no company can afford to have deadwood on its payroll because the repercussions on the whole company transcend beyond just monetary setbacks.

Every organization must outline the expectations clearly and then monitor employee progress. Times are tough and therefore it is better to be placed safely at the existing salary levels than be jobless. This thought has been adopted by employees across levels and sectors and therefore there is no negative outcome when organizations announce a ‘no pay hike’ policy.

Moreover, some companies are in the firing spree while some are in the hiring spree, depending on their business performances. A few companies are very cautious in hiring as no one is sure about the markets and the economy. Companies are thus justifying their acts by not committing to too much sops or monetary benefits to their employees.

Rajita Singh, Head HR, Broadridge Financial Solutions India, commented, “It is a simple logic that success of any company is dependent on enabling its clients’ success and help them endure through difficult business cycles, just as much as it means creating and supporting their growth when the economic cycle inevitably turns up again. Also many companies can take this opportunity to possibly align their associates with the business goals. Once this process is done in a very transparent way, then there is no need for any company to justify themselves.”

Meanwhile, it is difficult to generalize and state that companies are doing very little. The reality is that companies are not widely sharing the best practices. Wherever there is downsizing or lay-offs, companies with professional management and seasoned HR will normally take one of these steps—ensure that the termination happens in accordance with the terms and conditions of employment; provide a package that is better than the legal minimum or as per the terms and conditions; or offer support for finding jobs outside by exploring placement opportunities.

Keeping brand, goodwill intact

A company’s brand name and goodwill are not built overnight, but can be lost overnight if some of the people practices are not properly executed. Companies which go for retrenchment as a measure of cost-cutting surely put their goodwill and brand name at stake. They should, in fact, try to improve productivity and re-orient HR strategies. Also, they need to focus on transparent and timely communication to keep the employee morale high.

The need of the hour is proper communication and the right signals. In place of sacking the employees permanently, they could be asked to go on unpaid leave. But if the layoff is inevitable, the message should be passed on respectfully; afterall employees have been the building blocks in the system.

Vijay Shekhar Sharma, MD, One97 Communications, pointed out, “What actually impacts the company’s goodwill or brand name is how these are handled and such decisions are communicated. A company which has a transparent system and takes its employees into confidence while taking such measures is likely to get support from the employees. On the other hand, if the company does not communicate well, does not have transparency and the process appears to be biased, it is likely to cause discontent and bad blood amongst employees.”

The HR leader should engage the CEO and other business leaders in serious conversations on the implications of a variety of approaches that organizations can take to restructure their operations or while letting go off people.

“When HR leaders play the role of CEO-coach and help them choose the right course of action, the brand image and goodwill can be protected. It is often less expensive to do the right things in the first place than repair the damage later. CEOs under pressure would want to cut costs and keep budgets to the minimal, but it is the role of the HR leader to present a business case for the industry-best practice so that the reputation remains intact,” added C Mahalingam, EVP and Chief People Officer, Symphony Services.

It has been witnessed that companies emerge unscathed in businesses that are grounded in strong fundamentals of ethics, fair-play, employee welfare and development, value-creation, and social responsibility, amongst others. The basic business principles remain the same irrespective of the market conditions, and communication at all levels is the key. Moreover, for those organizations that have set ethical standards and beliefs, there might not be any impact as employees imbibe that. A company’s goodwill cannot be maintained just by feeding them with salaries, but it depends on key factors like trust between the stakeholders—employees, vendors, customers, and board members. 

Vani Sathvik, VP, HR and Administration, Eka Software, further asserted, “The goodwill is at stake if the organization as a whole doesn’t understand the term ‘risk management.’ There are many other factors associated with it—like being transparent with the stakeholders, employing a team of fore-thinkers, risk mitigators and crisis managers, and employee satisfaction and well-being.”

Do companies take undue advantage?

There is a general feeling that these kinds of actions are justifiable in the recession period. But at the same time, it would be wrong to say that companies take undue advantage of these situations because such companies will surely lose out in the long run. It is natural for them to go in a caution mode as no one knows what else might be coming. Hence they are all using this phase to realign and revise the policies.

“Transparency in governance and management is the cornerstone of successful businesses. If stakeholders perceive the company to be taking undue advantage of the situation, sooner or later, they will look for other companies to get involved with. For example, if good performing employees perceive the employer to be taking undue advantage of the situation, then in the long run they will look for opportunities with other employers when the market situation improves. The same is true for other stakeholders. So companies have to be careful with their actions and have to communicate the need and logic for such actions to all stakeholders,” said, Neelesh Sali, Director, Sales, EmPower Research Knowledge Services.

They should recognize that their success revolves around the right quality and quantity of their human capital. Business conditions do sometimes force companies to adjust their organizational structure and as a result, reduce their staffing. But when the HR leader proactively presents to the CEO and business leaders a variety of options available before the company before resorting to lay-off, most CEOs pay heed to this advice.

The smart and capable HR leaders assist the business in exploring the least painful options. It is believed that most of the businesses and business leaders in India are operating very conscientiously. If it was not to be so, we would have witnessed much more lay-offs than what we have seen so far. Also, mass lay-offs should be the last resort only when the organization has attempted all its calculated effort in dealing with the slowdown.

Standing out in the crowd

In these circumstances, companies can stand out in the crowd instead of following the breed. For example, Eka Software has compensation and benefit plan comprising fixed and variable components which will act as a cushion to take care of external factors like economy slowdown, attracting and retaining talents, etc. The company carefully plots the hiring goals and revisits the same, so that at any point, it is neither oversized nor undersized. 

For EmPower Research, value creation is the key. The company believes in creating value for its clients and is confident that as long as it continues to focus on value creation, it will not be affected by market conditions. The company’s strength is to also focus on creating tailor-made solutions for each of its clients, thereby creating a unique value proposition that is difficult to replicate. This has helped it to stand out in the crowd.

Vivek Kapoor, Director, Sales and Marketing, EmmayHR, highlighted, “In these situations, we put across the news very objectively and counsel the employee so that the impact is reduced; keep the channel of communication open in case they are required in the future; communicate the current situation and company happenings either through personal address or company Intranet or newsletters (depending on the sensitivity of the news); and encourage simple team efforts or applaud any new business wins—all of which would keep the momentum and morale high. The above mentioned steps would help position the company as being fair, objective and very transparent even in adverse situations and all this adds to the goodwill.”

Meanwhile, companies stand out in the crowd when they take certain value-based initiatives such as exploring other options of cutting costs and do not resort to lay-off as the first move; re-skill and redeploy people so that optimum use of people can be done to grow the business; ensure that they assist the people being laid-off with possible job opportunities outside; ensure that the recruitment process does not discriminate against the laid off people from other companies, but actually treat them as normal candidates when hiring is going on; giving first preference to laid-off employees when re-hiring begins; and giving good reference to the laid-off employees so that they get opportunities elsewhere.

“Since we are a product development company, our hiring numbers are conservative even in good times. This is to emphasize the fact that when we hire, it is very selective and only the best of the lot gets recruited. So we do not believe in letting them go just like that. Economy always comes up after a dip. Hence we believe in and practice retaining of talents and that is the reason why we as a company stand out from other IT companies,” added Jagat M Sarkar, HR Head, eRevMax Technologies.

Plans for 2009

The big economies are taking drastic steps to overcome the present scenario. Companies are framing HR policies that are employee-friendly and which cater to their needs. They will continue to offer conducive work environment, challenging and rewarding career, besides offering comprehensive training on product and technology and of course adequate compensation. The companies should maintain a status quo while dealing with their employees—whether it is economy uphill or downhill.

Ajit Varwandkar, MD, FS Management, emphasized, “The need of the hour is to ensure that the workforce in our country is ‘more employable,’ irrespective of being currently employed or not. The decades of 80’s and 90’s have already introduced the concept of ‘flexible employment and temporary staffing.’ Soon we should look for short-term contractual employments and hourly employments in India. We should inculcate employability in the workforce so that they become their own career entrepreneurs.”

Regarding HR policies, companies are coming out with effective performance counseling process, policies to enhance productivity, strengthening their reward mechanism and aiming for total reward policy. They need to be employee-friendly as that is what will help them generate goodwill. Happy employees are the perfect and best brand ambassadors for any company.

nivedan.prakash@expressindia.com