Why HR is undergoing a transformation
Of all professionals in the field of Management, Human Resources Management, often referred to as HR in professional circles, and identified as such, is the most challenging. There are many reasons why HR has still not been recognized as a major profession, like Finance and Marketing.
Be that as it may, the profession of HR is itself undergoing a transformation like never before. The different facets of this transformation needs to be properly understood.
Firstly, the times when HR was more identified with the more progressive sub-systems of HR like performance appraisal, career planning, training and development, talent management and so on, are all but gone, at least for another decade. We are back to the days of tension, back to the days when Industrial Relations was so important, and the HR Head was a legal professional of sorts, able to play the game of the Management by effectively exploiting all the loopholes in the labor laws. We are also back to the days of strikes and lock-outs, though the magnitude of this has still not reached the monstrous proportions of the yesteryears.
The earlier decade was one of huge growth, and the Corporate Sector grew by leaps and bounds. Managements were also a little bit more accommodating in terms of giving some more benefits, and extend the welfare facilities a little more than what was normal. So, industrial peace was possible, and the internal trade union movement also aided the formation of peace in most industrial undertakings.
However, two major factors are now responsible for a reversal of the trend, with Managements going all out to crush labor, with an iron hand, and taking recourse to contract labor like never before. The first major factor is the global recession, which does not show any signs of easing at all. So, profits are down, and Managements take the most easy route -- cost cutting by simply throwing people out of gainful employment. Naturally, this causes heart burn in every case, and the trade unions try to stop this practice. There is increased tension for the asking.
The second most important factor, is that the BJP Government at the Center is anti-labor in both letter and spirit. It has done nothing to stop the growing employment of contract labor, in just about every single industrial organization. The unrest at Maruthi Udyog, Honda Motor company, and in several other organizations, did not invite the attention of the BJP Government at all.
Worse, even the most recent ridiculous proposal of the BJP Government to tax the EPF Corpus of employees at the time of retirement, has sent a clear signal that the Government will simply play ball to the Managements and not protect labor at all.
So, we have a situation where the trade unions are up in arms against both Managements and the Government. However, they are not as effective as before, mainly because of the internal trade unions in most industries. Furthermore, the average worker is in no big mood to go on prolonged strikes and is less amenable to express dissent in any form.
However, there is a mad scramble to attract those who have a good industrial relations background, and Managers who have this background are in great demand. These Managers are back to the old days -- cost cutting at every single opportunity, exploiting labor and so on.
A case study of an auto ancillary organization will bring out how this is going on. This organization is part of a huge auto-ancillary conglomerate, which is also the largest in India, with Chennai as the headquarters for most group companies. The parent organization is Madurai-based.
This case study pertains to unrest in an organization of this group in a semi-urban area of Vellore district. The organization was happily employing contract labor in thousands in three of its manufacturing plants in the same location. They were on contract for even as many as over two decades. The workers were paid slightly better wages when compared to the contract labor in most other organizations in the surrounding areas, and were also given subsidized food in a canteen that was there for decades. They were given PF, Gratuity, ESI Medical facilities and so on, but were still on contract.
Such labor was employed for at least five years and up to twenty four years. For several years, there was simmering discontent among contract labor, who always felt that they were discriminated against regular labor. The Management did all this, even when the law of land says that if an employee was employed without any break for 240 days, he would have to be taken on regular rolls.
Worse, the work done by the contract labor was almost the same as the regular labor, and there were times when the contract labor were even computing data into the most sophisticated computers, as these labor were those who had cleared the plus two examination.
Matters came to a boiling point. One fine day, the contract labor who were on duty till 3.30 PM, in the general shift, refused to go out. They sat right in the huge open area in protest. They were joined by those who joined in, anytime between 3 and 3.30PM, and these were supposed to be the second shift. They struck work, and the labor combined themselves and demanded that the trade union leader, based in Chennai, would have to come and meet them.
Production came to a grinding halt. The Management sought to take the help of the police in throwing the workmen out physically. However, the police refused, fearing that a law and order problem would occur. Outside the gate, a huge number of members of the public gathered and the TV crew from a Tamil Channel managed to capture the event live and showed it on television, without mentioning the name of the company.
Two full days went, and there was absolutely no production. The trade union leader, an insider, was "taken care of" by the Management, and hence did not open his mouth all these years. However, when he eventually arrived on the third day, right after midnight, and tried to negotiate with the contract workmen, he was literally pushed away, and the workmen said that they would directly negotiate with the Chairman and Managing Director.
The CMD understood the gravity of the situation, declared that those who had completed over ten years of service on the date of announcement, would be taken on regular rolls. Those who qualified under this criteria, were immensely happy, and those who did not qualify, were left in the lurch.
Worse was to follow for such labor. Those who had put in less than five years of service on contract labor basis, were sacked overnight, and those who had put in even seven years of service, were also sacked. The Management was very harsh, and seemed totally unhappy with the decision of the contract labor to go on strike.
Those who now anxiously wait for another two or three years to qualify for the ten years of service, are now not sure that they will be taken in.
The Management closed down the co-operative credit store that helped the regular workmen to buy essential commodities on credit. They also closed down the technical training center.
This is just one example. Literally every single company is doing the same with labor, and playing around loopholes in every single labor law.
There is not much of a big hope that things will go back to the HR way, as Industrial Relations, with all its focus on cost cutting and dismissing labor, is back with a vengeance.
The profession of HR now stands at cross-roads and is undergoing a transformation, like never before. Superb practices like "engagement" that were loudly talked about a few years ago, are all but gone to the dustbin.
Only time will tell, when the global recession will abate a bit. Till then, HR in India, will be hugely influenced by the Industrial Relations function, for at least another ten years.
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