Sunday, January 8, 2012

The Serious Catch22: Companies are helpless..employee hopeless

What happens if role of 25% employees in the organisation does not change and their salary grows @10 to 15% each year.
If salary grew @10%, company would pay 150% salary cost after 4 years.
If salary grew @15%, company would pay 175% salary cost after 4 years.
If some of these salaries at higher band grew by 20%, the cost of salary would be more that 200% after 4 years. Does your company make ~50% profit YOY?
Take a situation, Recruiter hired at 3 lacs PA gets 6 lacs after 4 years, while she still does the same job she did years back and sometimes, does less than what she did when she was new. Do you think I need a recruiter with 6 lacs if I still expect her to source resumes, schedule interviews and send me daily tracker. Compared to 6 lacs cost, a third party recruiter or contract recruiter would cost me ~2 lacs for the same job.

A training coordinator who costs me 5 lacs will cost me 10 lacs after 4 years and if he keeps doing the same job, I lose 50% each year on cost efficiency of my department.

I remember, one of my bosses in an MNC told me a situation , where her HR Generalist and other back end HR people asked her, 'how can I grow in my position' and my boss, answered her, "you will grow if you get out of your current role". That is a very logical and fair answer. Now, having answered that, If that person does not come out of her role for 4 years,you certainly lose out 50% and more on cost efficiency of my department. While this situation is unavoidable, many a times for department heads, is there anyone thinking of what is the right value of the services delivered and how to keep her team lean? If at any point in time, a Manager realises that her team is becoming cost heavy and flatter on services, what shall, she do? Having a cost heavy team does not make sense to me. I have seen HR Managers holding the same role and title for 11 years or more in the same company. Think of my formula of salary raise, this HR Manager would have gone past 3 times his starting salary and for what? Same role? same title? Same Deliverables? Huh! How can you keep seeing this happening? Do you think your justification that now the same team member serves more people because company hired more people is a baffling excuse. I see most of HR roles not even enlarge horizontally, leave aside vertical expansion or enrichment. No HR head normally keeps teams leaner, meaner and meaningful beacuse they know HR is a cost centre and business has to bear this inevitable cost.
This frustrates the employee and makes him helpless as he becomes expensive for market and flatter on his learning & execution capability and scope of work and responsibilities. This is a career blocker!
Should companies not ask such employees, how do they plan to make a better career choice? and if they do not do it by themselves, should companies not ask headhunters to outplaceplace these cost heavy and services flat people?

I believe, this is a catch22 situation and more you prolong your decision, deeper you go the trouble spot.

Trust me , this reminds me of the Wall Street Journal article I read sometime back, where it talked about companies who have stopped doing performance appraisal and have started making more 1-1 meetings and feedback with managers. They hire compensation consultants every year and set the compensation for each position.
Do you think if other companies start hiring Compensation and benefits consultants each year and agree with their recommendation, lots of static positions will be ruled out and as a result companies will do justice with cost and services and also with employees who become top heavy and feel helpless and get a sense of eroded self-value and esteem?

Choice is yours.

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