The recent recession has had a domino effect across the globe. and while most do not expect to come out of this situation any time soon, India Inc. might be able to pull a houdini on them. Experts predict that by the end of the year 2009, India will be among the very few countries to emerge mostly unscathed.
The World is Flat, author and journalist, Thomas L. Friedman, wrote in his book by the same name. Here Friedman talks about the phenomena of ‘Globalisation 3.0’ and how the world is “flat” , in the sense that globalisation has levelled the competitive playing fields between industrial and emerging market countries. In a nutshell, he is talking about the economic markets where all competitors have an equal opportunity to sell their products in a free market, without any restrictions. This phrase, however, can be affixed to another phenomenon that is currently gripping the world: the on-going recession. How, you may wonder? Well, the recession in the United States has caused a ripple effect in every country, with job cuts and cost cutting being the most glaring repercussions. Like most organisations, across the globe, India Inc., too, is following a similar path. However, every dark cloud has a silver lining. And for India, this dark cloud’s silver lining is a better financial and organisational future. Though this statement may sound exaggerated to many, experts across India Inc. say that this slower economic growth in India will end with a positive high, as India will be among the many countries that will ride the storm of recession. On firm ground =========== With several organisations, across the globe layingoff employees, it’s but natural for anyone to predict that the sole cause of this is recession, right? And when the same situation is being played in India, you feel that India, too, is going through the same situation. However, experts say that though there are signs of downsizing, India, actually is not facing recession. They say that this situation has arisen merely due to the slowing down of the Indian economy. Peter Handal, President, Chairman and CEO of Dale Carnegie Training predicts that the current situation in India is expected to get better, as India is going through a period of slower growth and confirms that things will start to look up, in the near future. Diptarup Chakraborti, Principal Research Analyst, Gartner says that India will see higher growth rate once the current situation settles down, all by the end of the year 2009. It’s not just Chakraborti or Handal that expect India to emerge victorious, Joel Perlman, President and Co-Founder , Copal Partners, too shares their opinion. He gives his perspective, “India’s exposure to global trade is low which would help soften the adverse affect of the slowdown. Moreover, given the favourable demographics and long term growth potential, we expect India to attract significant investments, particularly for infrastructure development, which should help improve productivity and competitiveness of the Indian industry.” Anil Kumar – CEO and Chairman, Quinnox, an organisation that provides customised IT solutions, adds that there will be a significant change in their vertical as well. “The focus will be on the domestic market rather than exports. In the short run, revenues and margins will be affected. However, in the long run, it will lead to good industry practices as bad practices will be weeded out,” he further adds. Making hay while the sun shines ======================== While India will come out mostly unscathed, after the slowdown, experts are predicting a positive outcome in various fields. They say that once India Inc. gets back on its feet, things will get better for industries as well as for organisations and their employees. Many say that this will also be the time when other industries will also witness an increase in value, in terms of availability of various job opportunities for potential employees and job seekers. Industry: While talking about the industrial growth, Anil Sachdev,Founder and CEO, School of Inspired Leadership, Gurgaon, says that sectors like manufacturing, retail, construction, etc. will see a considerable growth, as these industries will be the fore runners driving economic growth. “The domestic market will gain strength and there will be a shift in focus to core sectors like power, construction, manufacturing and retail. Growth will be strong in the government and industrial sectors too, wherein they would look to leverage competitive advantage through technology,” adds Diwakar Nigam, MD, Newgen Software. “The education sector is likely to gain momentum as people will retool themselves to adapt to the changes that will result from this crisis,” adds Pearlman. Jayaram Easwaran, Head - Corporate Development, Dexterity adds, “There will be an increased focus on the education sector because of the pressing need to make qualified people more employable.” Other than these, Chakraborti says that another sector that will benefit after the slowdown would be media and entertainment, as there would be an increase in demand for these products and services in the market, eventually. Organisations: With the rebirth of these sectors, organisations will also see a change in the way they operate and will reinvent themselves to suit the needs of their employees. “Indian companies will move from a capability driven approach to one that is more outcome based and measurable. They will seize this opportunity and remove all wasteful practices that do not add any measurable outcome to their businesses,” says Easwaran. “As a result of general slowdown, forces creating tight labour markets in technical, sales and service professions will ease down. This will be an opportunity for organisations to focus correctly on recruitment of the right talent by looking at pre-hire assessments, and other tools to improve the selectivity of recruiting efforts,” explains Nigam. Chakraborti says that this will also be the time when Indian organisations and entrepreneurs will have the opportunity to expand more in terms of value and supply, as they will be entering and playing in a more mature field. 3) Employees: This slowdown has not been very favourable for the employees. Though downsizing is taking place at a fierce pace, experts say that by the end of this period, employees will not be ignored. Organisations will come up with rampant policies to help them get better suited for their jobs. Sachdev says that a lot of organisations will be going back to the basics of employee engagement to make them feel more secure and wanted after the slowdown. Nigam adds, “Provisions like contract jobs, flexible working hours, and work- from-home arrangements will become popular. Kumar opines that employee stability will start shaping up. Organisations will focus on improving their skill-set to sustain themselves in the current market. Money matters =========== Though many feel that the outcome of the slowdown will have positive repercussions, the issue of employee compensation, will continue to linger in the minds of several employees. Experts are a little unsure as to how salaries will shape up after India comes out of this slowdown. While moving towards an outcome based approach, organisations / employees may also witness a greater shift to performance based pay. Adding to this is Perlman who says, “Companies are likely to become more cost-conscious and will look at all possible ways to improve efficiency, which we believe will be good for the long- run competitiveness of Indian Inc.” “Salary increases would be modest as most organisations will take into account inflation and rising input costs in their salary increase budgets for 2009. Most companies will look at reducing their HR budget - by snipping increments, outsourcing work to cut costs and increasing proportion of variable components and performance linked pay in the total compensation package,” explains Nigam. Call it prediction or hope; this recession will end. For India, it may be sooner than the rest, and also, with a positive outcome! N.Sukumar Research Analyst www.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. 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