FALLING DOLLAR IMPACTS WORKFORCE STRATEGY

Sudipta Dev
Express Computer

The last six months have seen an endless stream of debates on how the IT industry will be impacted by the falling dollar rate. Those who expected it to be just a temporary phase and were waiting for the situation to get normal, have a much longer wait than anybody expected—the rising value of rupee, it seems, is here to stay. For a dollar-focused industry whose maximum revenues go into wages, it would mean long-term changes in workforce strategy. Interestingly, most experts believe that the situation will actually be beneficial for the industry in the long-term as it would bring about the much needed stability in people resources and costs.

The situation is almost reminiscent of the dotcom bust, only this time most companies are trying to deal with the problem more strategically and positively. The revenues are mostly generated in dollars and the costs are accounted for in rupees. “There’s been a direct and an incidental impact which will continue to affect throughout this year and a spiral effect on the years beyond. There will be a shift in the paradigm within talent management and C&B (compensation and benefits) policies, also more direct HR interventions would become the order of the day,” stated Vikram Bhardwaj, Managing Director, Redileon.

It has also impacted sales negatively. “However, it does also have a converse effect on cost-to-serve for Indian service providers, which has achieved a better efficiency,” said Monisha Advani, Managing Director, Randstad India.

Cutting the flab

Is the flab being cut, particularly among the bench staff? There have been reports of companies reducing their bench strength, along with plans for reduced hiring in the next few quarters. Some experts believe that the bench is now a luxury as organizations have now to fully utilize their workforce to combat effectively in a tough market scenario.

Many organizations have streamlined their processes to cut the flab on costs. “Bench staff reduction will only happen in very extreme conditions,” asserted Vaidyanathan Iyer, CEO, Flexiworks India. With most Indian firms adopting positive measures to deal with the situation, he added that the best way was to increase work hours (with employee concurrence), retrain in cutting edge technology, and use more people to cut down deployment time and earn extra dollars for early completion.