Auto Monitor
13 MAY 2013
COLUMN
10
Building morale Companies need to take proactive measures to cultivate and nurture its human resource, its biggest capital.
I
am only repeating an oftrepeated statement. And it’s worth stressing: the biggest asset a company can have is its human capital. It is this very human capital that can make or break the company. If the management of a company cannot keep its employees happy, then there are likely to be frequent discords between management and labour. This unholy relation with the labour is what has also contributed to the slump in the auto industry. In July last year, MSIL’s Manesar plant was hit as workers at one of its auto factories attacked supervisors and started a fire that killed a company’s senior HR official and injured 100 managers. That deplorable act of violence and the subsequent strike caused a loss of `1 crore to Maruti Suzuki India. Such incidents can escalate and affect any company in the automobile industry. Recently, Hero Motor Corp and Hyundai arrived at an agreement with their workers resolving pay scales demands, but this has cost them dearly.
Not at its brightest The current inactivity in the market is a great opportunity for the industry to introspect and take corrective measures to improve employee relations. The sluggish market scenario has forced many companies to substantially reduce produc-
Even in the worst cases, they should be more careful than when hiring. Losing one talented worked may not damage the quality of the workforce, but it can give the competition an edge. tion output and left idle capacity at their manufacturing units. And many of them have been forced to trim their workforce. According to my obser vations, this may not be the best response. Because once demand is back on track as expected, acquisition of right talent will take humongous effort. And the lack of skilled manpower might push them behind in the cutthroat competition. However, it is very important to be lean, so it is imperative that companies sift through their talent pool and nurture it. Even in the worst cases, where companies resort to retrenchment, they should be more careful than when hiring. Losing one talented worked may not damage the quality of the workforce, but it can give the competition an edge. The time is conducive to refresh relations with workers. Companies should take
initiatives to build strong ties with them and look at enhancing their skills. Identifying key skills and specializations of workers and working on improving their capabilities can pay rich dividends. Indian conditions are such that introduction of high cost automation will affect the balance sheet of companies. India’s USP has been availability of lowcost labour. No doubt labour is in abundance but finding skilled workers is crucial.
Relooking some needs The industry, being labour intensive, is also a major job prov ider. The government, under its Automotive Mission Plan, expects that by 2016 over 25 million people would find employment. It is well known that institutions are not capable of producing industry-ready talent so the industry joins hands with educational institutions, as well as investing in in-house talent training and nurturing programmes. According to the Indian Labour Report 2012 by TeamLease-IIJT, India’s higher education system is a bottleneck, as one million people, who don’t have adequate training, will join the labour force monthly for the next 20 years. About 80 per cent of India’s higher education system for 2030 is yet to be built and needs breaking the difficult trinity of cost, quality and scale — it needs massive
innovation, investment, deregulation and competition. A main concern raised by many consultants and worker representatives has been the unequal benefits and wages given to contractual and permanent employees. This creates an uneasy divide. Companies, in order to cut costs, give preference to contractual employees and in many cases the majority of the work force are contract workers. The industry has been citing strict government policy as reason for adopting such a policy. However, as expenditure on R&D and markets are always revealed in public no company has ever come out in the open and revealed their budgets for human resource development. This is an important point which companies need to be serious about. The government’s policy needs to be relooked and given some flexibility, in the sense that when there is a ramp up in production, the industry is in a position to hire more people and vice-versa. It seems a heartless thing to do, but what should be recommended is that there is some kind of insurance when they are out of a job so that they can sustain themselves during the time they are jobless. This is what happens in many countries globally. nabeel.khan@ network18publishing.com