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India Inc allows executives to ‘side-step’ slowdown

Namrata Singh, TNN | Sep 2, 2013, 03.46AM IST 

MUMBAI: A slowdown in economic growth throws up many challenges on the HR front. While a booming economy generates enough scope for vertical movement of staff, a slowdown, on the other hand, results in fewer such opportunities. As a result, organizations are encouraging horizontal movements to keep employees motivated.

Industry experts said horizontal movements have gone up considerably and the trend is quite visible in the international markets as well. Besides a slowdown, it's also to do with the life-stage of a manager who may be content with his or her current profile and not very keen on moving up vertically.

"I believe because we have had a good economic growth in the past, there was enough scope for vertical job movements. As the economy slows down, a lot more managers would go in for horizontal job movements. With no social security in a country like India, a job is the only safety net on which people build their assets. Many managers are opting to "side-step" rather than drop out of a job," said D Shivakumar, former head of emerging markets, Nokia.

Industry lifecycles too have shortened. "There was a time when organizations used to undergo restructuring/transformation in a decade or so. Today, this is happening every 1-2 years. There is some or the other change in content or structure or format," said Shivakumar.

So instead of planning a vertical career graph, individuals are chalking out a horizontal chart for themselves and organizations are encouraging the trend. In an industry like banking, for instance, horizontal moves have proved to be more effective in de-risking an individual against odds equipping him or her with skills to tread across different roles. Citi India encourages employees to take charge of their own career and decide if they want to move horizontally or vertically.

"We believe that the fast changing economic environment needs greater flexibility and fungibility of skills, creating organizational structures that provides more empowerment to employees. This has led to decentralization of decision making in many places and thus flat organization structures at times," said Anuranjita Kumar, country human resources officer, Citi India. Quick decisions drive organizations to be more nimble and responsive to the changing needs of clients, leading to better productivity. "A flatter organization is not a choice but an essential ingredient to be effective in these times," said Kumar.

In terms of rewards, tangible benefits have been linked to promotions and thus vertical movement. Kumar, however, believes, horizontal movements can be equally rewarding for the right 'switches' especially in financial services where various types of recognition exist, the most important being the learning curve in a new role.

Approximately 20% of the employee population at Citi India had a role change last year. "With impending growth at Citi India, the opportunities available to the employees have further enhanced," said Kumar.

With the growing rate of attrition and an intensely competitive external environment, horizontal 'promotions' have emerged as a popular tool. "While the conventional system of longitudinal career progression is still quite ubiquitous, such opportunities are only available to those exceptional and deserving employees, who demonstrate the competence, technical expertise and attitude to take on higher roles," said Divakar Kaza - president, HR, Lupin. "The flip side is that such employees develop a great deal of depth in their area of knowledge, but lack the breadth of understanding broader business issues. And this is where lateral progression assumes critical importance," he said.

Lupin has a formal process for lateral career progression. "Every year, we are observing a healthy increase in the number of employees enrolling for the program. In the last fiscal, there were more than 100 employees who went cleared the eligibility criteria. Of these, 63 employees have moved in different areas, other than their core technical specialization. This number is up by about 18% from the previous year and we are certainly hoping that the trend continues progressively in the years to come," said Kaza.

In future organizations, said Kaza, hierarchical structures will make way for flattened, matrix or role-based team structures.

At SAP India, the concept of 'grow from within' has gained momentum and is expected to increase the pace of horizontal movements. "We now are meeting one-third of our hiring needs from internal candidates. By 2015, our goal is to grow this to two-third, so as to provide more opportunities for career progression," said Nagraj Shriyan, head - talent acquisition, SAP India.

The strategy has been adopted by most of the new age businesses like IT, ITES, banking, telecom, services and technology-based organizations. "Comparisons can be drawn like in a vertical structure, a company has to deploy multiple resources for the same activity, whereas in horizontal one person is assigned for one job,"{ said Sunil Goel, MD, GlobalHunt India.