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| Xerox's Chatteraj (middle) with his
team: The MNC employer offers international exposure
to its middle managers to keep them motivated |
Hr heads of companies across India Inc. would
like to have you believe that theirs is a 'tough' vocation. And
lest this refrain be misconstrued as a sign of unwarranted chauvinism,
they hasten to add two antonymous words to their statement: 'attrition'
and 'retention'-words that, across organisational levels, rather
perversely define the fallout of India's explosive growth. And if
you thought fat pay packets were the beleaguered hr manager's best
bet, think again.
The BT-Omam Salary Survey for Middle Management
employees shows that in 2005-06, the head of a large department,
say, in an MNC automotive major (typically designated as a Deputy
General Manager and reporting to a functional head), would have,
on an average, cost his employer a little under Rs 22 lakh per
annum. "Intense competition has forced us to hike pay packets
of middle management employees by 15-20 per cent," informs
G. Ramesh, Senior VP (HR), Hyundai, "and for high performers
with specific skill sets, the figure is as high as 40 per cent."
But has that helped him keep his employees from leaving? Not quite.
While the automotive sector saw attrition levels of 15 per cent,
the figure for manufacturing as a whole was a high 22 per cent.
Across most sectors, both Old and New Economy, a similar trend
prevails.
| METHODOLOGY |
| To capture compensation trends in corporate
India, Business Today collaborated with the Delhi-based research
consultancy, Omam Consultants, to publish data on salaries
across a range of industries (14) and companies. This survey
covers middle managers and is the second of BT's annual salary
sweeps for 2007. For the current survey, Omam compiled middle
management salary data across 102 companies in 14 sectors.
Since salary data is confidential, the names of the companies
have not been revealed. However, the sectors have been mentioned
in the survey, and these are: automotive, banking, chemicals/petrochemicals/fertilisers,
core, consumer durables, engineering, FMCG, IT, ITEs-BPO,
pharma, real estate, retail, telecom and textiles. The survey
looks at compensation data from a number of angles, including
inter- and intra-industry averages.
The Omam team that collated and analysed the data was
led by Director Rajeeva Kumar, Executive Director Anil Koul,
and Senior Manager Ashutosh Kumar. |
And therein lies the crux of the issue. "When
you hire someone, you invest in him both in terms of time and
money, all of which is lost when he leaves," laments Chandan
Chatteraj, Executive Director (HR), Xerox. But where are most
people leaving from and where are they headed? For the most part,
sectional heads of departments, typically technical and management
graduates from premier colleges, who may have spent anywhere from
5-12 years in the manufacturing sector, are gravitating towards
sunrise sectors like retail, IT, ITEs and banking, finance and
insurance (BFSI). The movement being witnessed in the sunrise
sectors, say hr heads, is internal. In fact, even within the manufacturing
space, certain sectors like steel, which is witnessing unprecedented
investment, international and Indian players alike are mopping
up seasoned employees, especially from PSUs.
 |
| Apollo's Pasricha (extreme right) and
colleagues: He says even lateral moves across industries
are fetching handsome pay packages |
But it's not just the lure of another job that's
behind the churn. "Higher responsibilities with significantly
higher compensation are on offer in emerging sectors, so people
make a vertical shift across industries," reckons Pradeep Panda,
President (HR), Ispat Industries. It's a perception corroborated
by survey results, which point to a yawning gap between compensations
across middle management levels. So while a manager, who heads a
medium sized department, say in an FMCG major makes anywhere up
to Rs 14.5 lakh p.a., his immediate boss will likely be raking in
upwards of Rs 23 lakh p.a. Says Sukjit Pasricha, Chief HR, Apollo
International: "Another interesting trend is that of people
making a lateral shift from one industry to another, and in the
process getting generous pay hikes." As the survey figures
point out, after three-to-five years in the BFSI sector, a manager
can easily hope to earn twice the money his counterpart does in,
say, the textile industry.
On their part, companies seem to be doing all they
can to retain experienced employees. The hundred or so companies
across all the 14 sectors surveyed have incentivised remuneration;
a substantial percentage of the money on offer is variable pay.
While New Economy sectors such as IT, ITEs, telecom and BFSI have
traditionally only had a 'basic' component in the range of 22-35
per cent, Old Economy companies too have joined the bandwagon
with some in sectors like core and engineering marking 10 per
cent of the payout as variable.
But factors other than money can also explain the
churn. "For one, organic growth, especially in Old Economy
sectors, can be rather slow," says Panda, "so if a high
performer, whose growth has been stunted, does not shift in time,
he can be fatigued."
Increasing numbers of people, especially in the
age group of 25-35 years, now want to study, and companies are
offering anything from tailor-made management programmes in association
with top management institutes to even allowing people to take
sabbaticals. "We offer people international exposure by way
of short assignments and programmes in a bid to keep their motivational
levels high," says Chatteraj of Xerox.
HR heads also say that once a middle management
employee in, say, telecom or it reaches 40 years of age, it becomes
difficult for him to rise any further. Some like Pasricha, however,
feel that this would change with the manufacturing sector taking
off. "Core industries, which lay a premium on experience,
will absorb them," he says. But for that the job market will
have to cool first.
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