BUSINESS TODAY

It used to be a nightmare; walk into office and find yourself out of a job-even if you don't get to hear the precise phrase Donald Trump wants to trademark ('You're Fired!'). It used to make one spring up sweating in the middle of the night. Now it's beginning to sound like some sort of a paid holiday-ever since severance deals have found their way into job contracts.

Smart job negotiators knew about it all along. The golden parachute. Spoken of in murmurs as some sort of a corporate myth for years, it has revealed itself to exist-right here in India-and it's best if you acquaint yourself with it, even if you don't fear a premature sacking.

So what is a golden parachute? "Simply put," explains Atul Vohra, Managing Partner, TranSearch International, "this protects you against a sudden downturn. In case you find your position eliminated due to strategic reasons, or your employer decides to leave the country, which basically means that you lose your job for a 'non-cause' issue, or if your situation with the new management is untenable, you will still be compensated for the remainder of your contract. Simply put, it is a fixed-term contract-you cannot be arbitrarily fired before it is over."

As an example, Vohra mentions the marketing chief of an insurance firm. "The person had a two-year contract with over nine months still to go," says Vohra. "His position was made redundant, and he was still paid for the remaining nine months after he was asked to leave."

"Sometimes," adds Sonal Agrawal, Senior Director, Accord Group India, "companies retain employees on the rolls as it is perceived to be easier for them to find a job if still employed." Otherwise, the old market rule applies: the more risk-laden the job, the better the severance terms. Top positions that are acutely sensitive to twists in market conditions, for example, are most likely to have parachute-loaded clauses. In the volatile TV media business, Sandeep Goyal's case is still talked about. In 2002, he left Zee TV, which he was running, but was remunerated as if nothing had changed, till the 2004 expiry of his original contract-on the condition that he would not start another company or work for someone else.

It all depends on contractual details. "Usually," clarifies Vohra, "the compensation continues as long as the person finds a new source of income, whatever that may be."

There's market logic to assuring someone the security of a fixed full-pay term, especially in 'fledgling' or 'high-risk' industries. It grants executives freedom to play a riskier game than they would otherwise; and under extreme competition, high risk is sometimes needed just to survive, let alone deliver high returns. "Fixed-time contracts are a norm nowadays," says Sunil Lulla, Executive VP, Sony Entertainment Television, who sees it as a necessary shield to be able to do a good job. As the former CEO of the doomed web start-up Indya.com, he speaks from his own dotbust experience. "I can't tell you much about myself, other than to say that I got a good package when I was relieved of charge," he says, adding, though, that everyone at Indya got a "generous" severance package.

According to Arun Das Mahapatra, Managing Partner, Heidrick & Struggles India, the dotbust experience has woken executives up to golden parachutes. "I expect to see more and more such contracts," he says. "In fact, I expect these contracts soon to become normal for senior executives in India."

While regular cheques till-your-next-job are becoming the severance norm, says Agrawal, some executives prefer clean-cut lump sum payouts. This is particularly so if the parting has been bitter, since bit by bit cheque-dependence could involve sustained trauma. Clearly, what works best for whom is not easy to establish.

Getting contracts right is no easy task. Agrawal recommends the services of 'career transition' firms (such as Drake Beam Morin) to help corporates work out the messy details of severance-particularly if it is not a clean cut. Often, the links endure for a while. Some corporates like to continue using some of the advisory services of employees asked to attend office no longer. Typically, this happens in job-overlaps resulting from mergers, and such ex-executives are often granted access to regular office facilities. The hp-Compaq and Standard Chartered-ANZ Grindlays are cited as examples by hr professionals.

So are we witnessing a new era of post-parting benevolence driven by market forces? Not quite, says Gangapriya Chakraverti, Head (Compensation Packages), Mercer hr. At least not in any broad sense across sectors. "Golden parachutes as defined by international corporations is still a long way away in India," she observes, adding that the broader trend is towards allowing ex-employees to retain the company house, car and other such facilities after the parting. The big difference, though, is that companies in India do not axe people quite so summarily either-partly because low salaries make space for some deadwood aboard, and partly because of a benign corporate culture. Remember, unlike in the West, India has no publicly-funded safety net to catch people when they fall. Risk-taking high performers, however, see it differently-and are demanding contractual safeguards not from benevolence, but as an incentive to perform well.

Partha Rakshit
Roll your eyes, grate your teeth-whatever else you do on hearing 'exit poll', the man you won't escape is Partha Rakshit, Managing Director, ACNielsen, a leading pollster. He's in the spotlight for all the wrong reasons, defending statistical psephology at a time it has begun rhyming with astrology. Just three states' predictions went wrong, he avers: Bihar, Gujarat and UP. States where small vote swings make huge differences. "Voter inhibition or what we refer to as the 'fear factor' may have led them to not revealing correctly the party that they have voted for," he says. "Moreover, the sample for exit polls tends to be a 'self-selecting' one and not a random sample," he adds. So much for the science of it.

I am a 25-year-old electronics and communication engineer working with a multinational firm as a project planner. My two-year contract is set to run out in another six months. The company is passing through a financial crunch and my contract has a good chance of not being renewed. I have tried looking for a similar job elsewhere but am finding it difficult to get one as most companies do not have a post of project planner. Should I continue in this industry or move on to an industry where there is more demand for my skill-sets?

It is better to be in an industry or a function where you have a competitive advantage rather than a disadvantage at the beginning of your career. From this point of view, you are not so badly placed. That doesn't mean you can't try your luck in other industries, although you may find it a little difficult at the time of making the switch. You should look for a career where your qualifications and your work experience prove an advantage. If you must go in for a change of industry, try to get into a company where electronics and communications engineering are critical functions. Alternately, you could go in for a change of functions. You could switch from project planning to functions such as instrumentation or information technology. That would also be a lot easier for a person of your background.

I am a 28-year-old marketing professional working in the cement industry for over two-and-a-half years. I am a science graduate with a diploma from a second-rung B-school. My company has not been doing well and has decided to go in for lay-offs. I feel I am going to be one of the first to be laid off because of my inability to meet targets. This has created a feeling of uncertainty that has affected my work. Should I quit?

It may not be such a bad idea to quit. Your problems are symptomatic of what any person in a dead-end job would face. With your science background and the management diploma, you can easily land another job either in a bigger company in the same industry or in some other industry. Just remember this: non-performers meet the same fate everywhere, mass layoffs or not. So, do better in your next job and make sure you meet the expectations of your new employers.

I am a 44-year-old mechanical engineer with an MBA working for the last one-and-a-half years as an area sales manager with a machine tools marketing company. I have over 20 years of experience marketing capital equipment and industrial engineering products. I recently got to know that my subordinate, who is far less qualified and has just four years of experience in the industry, gets much better remuneration than I do. I have tried discussing the matter with the department head but he refuses to take up the issue with management. What should I do?

You could try talking to someone in your company's hr department or someone higher up on the subject. Apart from obvious considerations such as qualifications and work experience, intangibles such as dynamism and the ability to get along with and impress people also influence the salaries that executives get. The reason your colleague gets paid more than you do could be one of these intangibles. If your meeting with the hr people fails to sort out the problem to your satisfaction, you could always explore other options. There must be plenty of openings out there that would do a person of your qualifications and experience justice. However, make sure you do not leave in a huff and have a new assignment in hand before putting in your papers.

I am 42 years of age and have been working as a manager with a nationalised bank for the last 18 years. I feel my career has reached a plateau and am thinking of pursuing the CFA course offered by the Hyderabad-based ICFAI. How beneficial would the course be? Should I take up a management course with specialisation in Finance or will the CFA certificate hold good if I decide to go in for a career in financial consultancy services sometime in the near future?

If you are thinking in terms of a career in financial consultancy services, a CFA course would be an extremely useful thing to have. This is assuming that you do not already have a qualification as a CA or an MBA. However, you must note that though CFA can be obtained on a distance learning basis, doing a full-time MBA-the only kind that carries any weight in the job market-will mean leaving your job or taking long leave.

Answers to your career concerns are contributed by Tarun Sheth (Senior Consultant) and Shilpa Sheth (Managing Partner, US practice) of HR firm, Shilputsi Consultants. Write to Help,Tarun! c/o Business Today, Videocon Tower, Fifth Floor, E-1, Jhandewalan Extn., New Delhi-110055.

Appraisals. It is that time of the year when you either think your company can do nothing wrong, or nothing right. Just as last year witnessed a corporate increase of an estimated average 11.5 per cent in salaries, human resource consultants are expecting a double-digit jump this year as well. "Salaries are expected to boom for it, ITEs, biotech and consumer retail, but the big assumption is political stability," says a cautiously optimistic K. Pandia Rajan, Chairman and MD, Ma Foi Management Consulting. Managerial salaries across 40 industrial segments (excluding public sector units) are expected to witness an average increase of 12 per cent for 2004-05, concludes a Ma Foi report.

India's robust growth story spells bigger investment opportunities. Beyond that, a strong dose of competition could result in an all-out battle for talent. A Mercer HR Consulting report on compensation practices in Asia Pacific highlights such pressure on salaries in India. "This financial year would see an increase of 13 per cent year-on-year," says a senior executive at Mercer India. Now that's one lucky number, wouldn't you say?

-Aditya Wali

Wider Expanse
A wider swathe of sectors is getting 'hot'.

The retail engine: Nothing less than a job explosion

The Indian job market had three hot stories for a while: it, it and it. With the sudden economic turnaround, the breadth of sectors filling its ranks with fresh recruits is set to widen. "There is all-round growth in the job market, and it's here to stay," says Nirupama V.G., Executive VP at TeamLease, a leading hr outsourcing services firm. From FMCGs to retail, banking to insurance, and business services to manufacturing, the action is back. And it's not just for MBAs. "A 10th class pass can get a retail job and a 12th class one in the auto ancillary sector," says Nirupama, "A diploma holder can land a data entry job, while a degree holder can find place in the ITEs industry, and for a techie, it's it and manufacturing."

Yet, the BPO sector remains the hottest, even as policy go-aheads are awaited for others. "The new government is expected to open up more sectors for foreign direct investment," says A. Venkat Madhavan, Director (HR), Ernst & Young. "So retail, media & entertainment, and telecom will see a lot of action in the coming days."

-Payal Sethi