Govt. to take the issue of Training

In an interesting move the ministry of overseas Indian affairs is getting into migration management policy in a big way.

Given India’s young workforce and the huge economic opportunities emerging around the world, we are well poised to reap the benefits of global skills shortages. However, MOIA is seriously addressing the issue of upgrading the perception of India as a country that sends out a skilled and disciplined workforce. For this we will look into training and skills upgrade as well as basic foreign language training for skilled, semi-skilled and unskilled workers who decide to look for opportunities overseas,” G Gurucharan, joint secretary MOIA, told ET.

Some of the initiatives arise out of the Indian government’s concern about global competition eating into low wage jobs and localisation reducing the number of unskilled jobs available.

Go Green

Reports suggests that almost two-thirds of employees want their companies to invest more of their profits in protecting the environment, according to research out today.

The research also shows that staff racked up 26.5 billion miles flying on business last year, enough to travel more than 600 times to the Mars.

The findings come in a YouGov survey of 1,287 full-time staff, which found that 62% of employees believe companies should contribute something towards minimising the impact of business travel on climate change. But 77% of workers said they were not prepared to make a contribution of their own.

Only 5% are prepared to sacrifice a percentage of their salary and 2% would give up a percentage of their holiday allowance to help their employer to pay for the extra costs of going green.

Flexi timings at Mac donald

Mac donald has launched a poster campaign using the slogan 'Not bad for a McJob', which details the benefits the company offers staff such as extensive flexible working options.

Flexible working has become a trusted HR tool in the UK, but now fast food giant McDonald's is taking the concept one step further by piloting a scheme whereby employees can arrange emergency shift cover among themselves.

"It's all about tailoring the employee value proposition," explains vice-president of people David Fairhurst. "We pride ourselves on being a local, flexible employer, but wanted to take this to the next level. The answer was to devise the concept of 'family contracts'."

In essence, two people from the same family, who both work in the same McDonald's restaurant, can apply for a family contract. This is a contract of work that allows both family members greater flexibility in working their shifts. In practice, if one person chooses not to work a particular shift for any reason, then their family member can work it for them.

This means that if, for example, a child within the family falls ill, then employees in the scheme have the flexibility to choose which family member will work the shift and which will assume caring duties.

This concept of flexi timing has helped Macdonald to hit back at critics and build the impression of being a employee friendly organisation.It is the first time the company has tried to combat the "negative misconceptions" that have been associated with the title 'McJob' ever since the term was used by Douglas Copeland in his bestselling novel Generation X: tales for an Accelerated Culture.

The Future of Innovation

IBM conducted a two days discussion on innovation and the challenges facing businesses in the 21st century.Some of the world’s leading thinkers from across business, industry, government and academia gathered for the 2006 Business Leadership Forum, the fourth such event hosted by IBM, took place in Rome, Italy. IBM Chairman and CEO Sam Palmisano welcomed leaders representing more than 50 countries, setting the tone for the event early in his opening remarks.

Some of the key thoughts of the meet were:

Innovation is essential. Globalization is inevitable. Ubiquitous connectivity is breaking down physical borders and creating connections between people, economies, organizations and governments in ways that were never thought possible.

It's about being unique. In this age where competition for talent and brand share is critical, businesses need to cultivate their uniqueness. They need to encourage an environment that allows people to be open, to be multi-disciplined, to be collaborative, and to be global in their thought process.

The speed of change is much faster — and more disruptive — than seen before.

CEOs must pay attention to the implications of change among employees.

Technology plays a leading role in innovation, but it isn't the only factor. What were once disruptive technologies now are commodities. Technology can be the establishing base for innovation, but people are the ones that drive it forward. Technology is really only the mechanics of the process. Real innovation is about great people generating and then implementing new ideas.

To innovate, CEOs don’t need to control all the resources or build within their own frameworks. Partner and collaborate, then disband and go back to doing whatever a the individuals’ strengths are. CEOs aren’t limited to using their own staff or resources.

Governments can help spur innovation among the private sector. Governments must be more flexible to respond to today's business needs. Entrepreneurship creates jobs, and it turns inventions into innovation.

The central theme of the 2006 IBM Business Leadership Forum was clear and unequivocal: Now is a great time to be an innovator; organizations merely need the willingness to do so, have the courage to fail, and a vision to execute against.

In another post Irving gives his views on the different leadership styles and approaches to innovation represented by the speakers.He also talks about Sunil Mittal and his views on telecom servies in India.

Learn Maths

It’s official now.

“It's important to understand if children don't have those skill sets (in maths and science) needed to compete with a child from India, or a child from China, the new jobs will be going there," Bush told students and teachers at the Parkland Magnet Middle School for Aerospace Technology outside Washington DC.

Bush's initiatives stems from recent studies that paint a grim picture of declining US competitiveness in the face of the rising number of science and engineering graduates from China and India.

India’s technical institutes may not figure in the top 10 colleges on Science and tech. in world but we are still able to compete with the best and produce some of the best technically skilled people. I think more than the institutes it’s our survival instinct and winners mindset to beat the odds that makes Indians so successful wherever they go whatever they do.

CEO Talks

Offshoring is a funny thing for an international company. Where is your shore?" asked Kleinfeld. "My shore is as much in India and China as it is in Germany or the U.S." Siemens will continue to migrate to developing regions where new sales are growing. "I really see more international businesses, or fragments, run out of those growth regions like India and China," .

Siemens CEO Klaus Kleinfeld talks about “teams,work culture , global economy ,fears of globalization and Outsourcing at a recent Wharton Leadership Lecture.

Kleinfeld said U.S. concerns about the sale of port assets to a Dubai-based firm, and French resistance to the sale of yogurt-maker Danone -- which French officials called a "national treasure" -- highlight growing fears that globalization comes at the cost of jobs in developed countries. Those fears could spark a backlash against globalism and limit future economic growth, he warned. "The common people -- the voters -- do not understand what's going on and see a threat," said Kleinfeld. "We, as leaders, need to be responsible for explaining the positives of globalization."

In today's world, knowledge travels faster than ever before, so if you are talking about a sustainable competitive advantage, probably the only one is the quality of the people you have and the way they interact as a team," he said.

Secrets of Sucess

One of the all times successful Business Book, “Built to last” written by James C. Collins and Jerry I. Porras has raised lot of interests about visionary companies and successful leaders.

The book sparked another investigation that has now led to a follow-up book, Success Built to Last, which will be published by Wharton School Publishing later this year.

Mark Thompson and Stewart Emery, co-authors with Porras of Success Built to Last, spoke recently with Knowledge@Wharton about their new book. In addition, the authors are conducting a global survey on how people think about success.You can visit the link and submit your views on success.

Mark Thompson says “The original premise of Built to Last was visionarycompanies. The idea was that a visionary organization would have more enduring success -- but what about individuals in terms of their work and lives?

What about careers built to last? What about a life built to last? What could we learn from people from a wide variety of professions who had had enduring impact in their work for decades? These were not one-hit wonders or superficial successes; these were people who were able to make a contribution and have enduring impact. That is what we wanted the new book to explore.

You can read the complete interview here.

The Cost of HR tools and processes

In a recent white paper release by Pilat-Nai on “ROI for HR systems and Processes” has some insight on how to justify the cost on HR tools.

Just like manufacturing, sales or distribution, HR should develop a business case for each of its initiatives. These business case should lead with the overall strategic purpose of the initiative but be supported by a thorough and objective assessment of:

􀂃 Costs - direct, indirect, start-up, Running
􀂃 Benefits
􀂃 Risks/certainties - factors that could Impact costs and/or benefits, with some Assessment of their probability and how any risks can be managed


As HR shifts from being 60% administrative and 40% strategic to 60+% strategic and 40-% administrative, it will need to focus on initiatives that add value; the focus will shift from assessing cost reduction to the more complex task of assessing increased effectiveness and impact.

Global CEO study on Innovation

IBM and the Economist Intelligence Unit (EIU) conducted the study called "Expanding the Innovation Horizon, the 2006 IBM Global CEO Study which reported on the agenda of CEOs in the next few years. The results are based on interviews conducted recently with 765 chief executives from around the world. (It was the second global CEO study conducted by these partners; in 2004, the first Global CEO Study reported on interviews with 456 CEOs.)


Over the next two years, two-thirds of corporate CEOs say they're going to need to make fundamental changes to their business.

The reasons, they say, are many: intensified competition, escalating customer expectations, and unexpected market shifts. For many, you can add to that list workforce issues, technological advances, regulatory concerns, and globalization.

Yet fewer than half of CEOs think their organizations have handled such changes with much success in the past.

Some of study's findings are:

Business model innovation is becoming the new strategic differentiator. "The business model we choose will determine the success or failure of our strategy," one study participant said. In contrast to the findings of the 2004 survey, innovation in the enterprise's business model garnered nearly as much attention as innovation in a company's core processes and functions.

Business model innovation can pay off. In the financial analysis for the study, companies that have grown their operating margins faster than their competitors were putting twice as much emphasis on business model innovation as underperformers

Innovation doesn't need a badge to get in. CEOs said their company's employees were the most significant source for innovative ideas. But ranking close behind employees were business partners and customers—indicating that two out of the three top sources for the best ideas now lie outside the enterprise.

Collaboration can pay off. The financial analysis explains why CEOs are more eager to partner and engage with other organizations than ever before. Companies with higher revenue growth reported using external sources significantly more than the slower growers. As one CEO said: "If you think you have all the answers internally, you are wrong."

Indian HR market to Double

ET reports suggest that Dutch HR major Randstad is likely to expand in India.

After acquiring majority stakes in Indian HR firms EmmayHR and Team4U, the E6.6-bn recruitment and staffing company Randstad Holding nv plans to consolidate its position by targeting sectors like retail, IT, BPO, telecom and banking and insurance.

The HR staffing and recruitment segment in India is currently around Rs 2,000 crore and Randstad's acquisitions of two Indian firms had given it a market share of 10 per cent in the high revenue staffing market, where the company was looking at doubling numbers every year.

Berg estimated that the Indian HR market would double to a billion dollars in the coming 2-3 years and hoped that Randstad would emerge as the market leader in India in as many years.

World's most Modern Management:India

Ever thought that you’ll be allowed to raise tickets against your own boss and also close it when you are satisfied by the response of your boss. If you thought that it may happen in some MNC but not in India, think again. David Kirkpatrick says that the world's most modern management exists in India.

“I have seen the future of management, and it is Indian. Vineet Nayar, president of India's 30,000-employee HCL Technologies (Research), is creating an IT outsourcing firm where, he says, employees come first and customers second.”

Every employee rates their boss, their boss' boss, and any three other company managers they choose, on 18 questions using a 1-5 scale. Such 360-degree evaluations are not uncommon, but at HCL all results are posted online for every employee to see. That's un-heard-of!

And that's not all. Every HCL employee can at any time create an electronic "ticket" to flag anything they think requires action in the company.Explains Nayar, "It can be 'I have a problem with my bonus,' or 'My seat is not working,' or 'My boss sucks.'" The ticket is routed to a manager for resolution.

Amazingly, such tickets can only be "closed" by the employees themselves. And Nayar is vigilant that managers not intimidate employees about creating or closing tickets. Managers are evaluated partly based on how many tickets their departments are creating - the more the better. Nonetheless, I'm sure it continues to be recommended not to be the employee who regularly posts a "my boss sucks" ticket.

In addition, every employee can post a question or comment on any subject in a public process called "U and I." About 400 come in each month, and questions and answers are all posted on the intranet.

How to motivate employees ???

Why are employees losing motivation? HBR's study answer's this.

The great majority of employees are quite enthusiastic when they start a new job. But in about 85 percent of companies, HBR research finds, employees' morale sharply declines after their first six months—and continues to deteriorate for years afterward. That finding is based on surveys of about 1.2 million employees at 52 primarily Fortune 1000 companies from 2001 through 2004, conducted by Sirota Survey Intelligence

The fault lies squarely at the feet of management—both the policies and procedures companies employ in managing their workforces and in the relationships that individual managers establish with their direct reports.HBR's research shows how individual managers' behaviors and styles are contributing to the problem (see "How Management Demotivates")—and what they can do to turn this around.

Eight practices to fire your team for HBR.

1. Instill an inspiring purpose.

2. Provide recognition.

3. Be an expediter for your employees.

4. Coach your employees for improvement.

5. Communicate fully.

6. Face up to poor performance.

7. Promote teamwork.

8. Listen and involve.

Thoughts on Mentoring

Two very interesting posts on Mentoring by Bob Roosner and Fast Company. Roosner talks about how you should go about mentoring .He give some vital action points and thoughts for self evaluation before one looks for a mentor. One interesting fact that he mentions is that “Most of us think of a mentor as someone who is older and more powerful than we are.He talks about the process of "reverse mentoring" where top executives spend time with younger people on the front lines to learn from their perspective.

I think reverse mentoring is something which many leaders need to adopt,it helps them to connect to the young and more ambitious talented and energetic work force of toady. Policy makers and team leads will find it a very helpful technique for team building and motivating employee’s .As a young lad when one finds his voice being heard in the organization I think it does a lot to create an impression of being an interactive and responsive organization.

What skills or traits do I want to develop? The best mentor searches don’t begin with who is available, they begin with you and what you need to improve.

Do I want to learn from someone similar or someone different?

Do I want someone I already know or someone new? This question all comes down to trust. Some of us only feel comfortable if we have history with a person, while others can easily open themselves up to a stranger.

How much time do I want to spend? Some mentor relationships last for an hour, while others can go on for years with many meetings. What do you think the optimal timeframe is for you?

Who is the person I can learn the most from? Most of us think of a mentor as someone who is older and more powerful than we are. This isn’t necessarily the case. In fact, there is a new trend of "reverse mentoring" where top executives spend time with younger people on the front lines to learn from their perspective. So open yourself up to mentors from above, to the side and below.

On the other hand Fast company post talks about the concept of radical mentors

" - senior executives who've cared enough to push her, even when it hurt. Radical mentors "move people along faster than they want to go," she says. "It's not natural for people to grow as fast as you need them to. People don't grow if you're soft with them. You catapult people forward by being extremely blunt."

Sound tough? It is. Carpenter suggests that senior leaders ask themselves this question: Who are 10 young leaders that I can grow quickly, and what's a crash course that's right for them? "Then you form a contract with those people: 'I would like to help you move along faster. Are you willing to buckle your seat belt and go?' " Mentors have to manage their commitments as well.

The key to radical mentoring, Carpenter says, is real-time feedback - direct, honest, public. Most business decisions don't involve such life-and-death consequences.

But the principles of radical mentoring are the same: Personal growth hurts; people won't benefit unless they consciously sign up for it; the process requires as much commitment from the mentor as from the mentee.

Carpenter is convinced that this kind of intellectual honesty is what young people need - especially in fast-moving industries. "People have much greater capacity for growth than they get credit for," she says. "Once you get your first taste of being really challenged, you want to be challenged more."

This concept reminds me of the movie MIRACLE starring Kurt Russell, Eddie Cahill, Patricia Clarkson, based on real life incident on the 1980 U.S. Olympic Ice Hockey Team and Their Victory Over the Soviet Union at the Winter Games in Lake Placid, New York

China and HR Jobs

Forbe’s Article suggests that HR is in high demand and the economic boom and some dubious practices by companies have lead to high demand for HR professionals in China.

China's economic boom and attendant surge in intellectual property theft and financial crimes are taxing the skills of personnel departments. The demand for those skills is making personnel into one of the hottest careers in China today.

According to consulting firm Mercer, wages in China for top HR executives of multinational companies grew 20% in each of the last two years to $97,000--in a country where per capita income is 1% of that figure. The risk of a bad hire is getting bigger as manufacturers transfer sophisticated technology to woo local consumers and overseas investment funds pour fresh capital into local businesses.

Corporate-snooping outfits are thriving as clients demand more background checks on their partners and employees. After opening a Shanghai office in 2003, Control Risks has gone from 2 to 22 employees in the city and will add an office of 5 people in Hong Kong this year.

I think it's a good enough reason for HR folks to learn some Chinese as soon as possible, most of the analyst thought that China will find it tough to survive in the global market because of its lack of skilled English speaking population but it seems china has turned the table around and now the knowledge of Chinese has become critical to stay in Chinese market.

In another report from China ,McKinsey has an interesting article on protecting intellectual property in China.

He feels that many multinational companies in China are losing the battle to protect their intellectual property, largely because they rely too heavily on legal tactics and fail to factor IP properly into their strategic and operational decisions.

When we studied the Chinese operations of ten multinationals competing in IP-sensitive industries (including consumer electronics, medical equipment, pharmaceuticals, semiconductors, and software), we found that many executives think of protecting IP solely in legal terms—and sometimes only after property has been stolen. The most successful companies, however, take strategic and operational action to protect their IP before that happens, thus lowering their litigation costs and improving the odds that their IP will remain safe.

Business and E-learning Forum

Tata Interactive Systems (TIS) which is a global pioneer in e-learning, a part of the $18 billion Tata Group- is hoisting the Tata Interactive Learning Forum at London which highlights key learning themes for the early 21st century.

Games and simulations; performance support; measuring e-learning effectively,and implementing e-learning throughout large organisations were the key themes of this year's Tata Interactive Learning Forum .

"Learning is not a 'soft issue'. It's a priority at every point in the business cycle in order to create and sustain competitive advantage," stated Terry Lehmann, director of training and development at the Houston, Texas-based oil products giant Baker Hughes, who outlined how to prevent 'random acts of training' of varying quality within a large organisation.

His fellow American, Gary Dickelman, of EPSS Central, based in Annandale, Virginia, examined ways to improve business performance through human performance- notably through the adoption of performance support systems. He commented that these systems have not only enabled people to become competent in their jobs in 'minimal time' but also eliminated the need for up to 80 per cent of formal training activities- including e-learning programmes.

Keynote speakers, drawn from across the world, included Terry Lehmann and Gary Dickelman, as well as Christiane Zimmer, Germany's leading business simulations specialist and Charles Jennings, head of global learning for Reuters. They were supported by a panel of e-learning experts .

Who's responsible for employees retention

Mikel Goldman raises the question on "Who's responsible to employee retention anyway?

Is it the recruiter? Is it HR? Is it the manager? Is it a combination of all three? HE argues that at most companies, no one is responsible. He says that “It's true that many strong HR departments do things like measure employee retention, provide guidelines for performance evaluations, implement training programs and plan the company picnic. That's a good start,but it's not enough. People don't quit companies, they quit managers.

Corporate-wide retention programs implemented by the HR department are nice, but they don't solve the problem.

The problem needs to be solved at the Manager-Employee level. Managers need to be given guidance, training, tools and support but, at the end of the day; they need to be accountable for retention issues on their team. If managers are given the support and they still have retention problems, they need to be warned, and then fired quickly if they can't get the problem under control. So, do we need retain-ers? No. We need programs to recruit, hire, develop and support strong managers. He challenges you to look at your own management recruiting and training programs. If they haven't been significantly updated in the last 3-4 years, you've got some work to do.

I think his assertion that HR needs to do much more than organizing corporate wide retention policy is quiet valid .Some additional points which I feel HR must do it terms of improving upon its stake in employee retention ;

1) Be the first point of contact for any issues, grievance and concerns of employees .If it is not possible in a large set up then the line manager has to take the role of ensuring that employees are free to voice their concerns.

2) Provide the employees with adequate forums to ask questions and seek clarifications on policy and other work related issues.

3) Educate the managers about the resource pool availability and prevalent market situations.

4) Work more on changing employee’s perception about the employer and the career path which the organization has to offer.

5) Ensure that communication flow in the system is flawless and that every individual is made part of decision making process.

6) That each manager has a future plan for his team members and a career path to offer .

Dimensions of Innovation

How do you encounter the growth of competitors, technology, reduce cost, retain employees and develop killer applications? INNOVATE

What exactly is innovation? Beth McConnell has his views on this ..

“Although the subject has risen to the top of the CEO agenda, many companies have a mistakenly narrow view of it. They might see Innovation as synonymous with new product development or traditional research and development. But such myopia can lead to the systematic erosion of competitive advantage. As a result, companies in a given industry can come to resemble one another over time.

In actuality, business innovation is far broader in scope than product or technological innovation.

In fact, a company can innovate along any of 12 different dimensions with respect to its

(1) offerings,
(2) platform,
(3) solutions,
(4) customers,
(5) customer experience,
(6) value capture,
(7) processes,
(8) organization,
(9) supply chain,
(10) presence,
(11) networking, and
(12) brand.

Together the 12 dimensions of innovation can be displayed in a new framework called the “innovation radar,” which companies can use to manage the increasingly complex business systems through which they add value.

IT Industry and India's Role

We all know that the IT industry in India is making news all over and analyst all over the world are quiet bullish about the growth of Indian IT trade.

IBM has a global strategy for SOA hinges on India as it bets big not only on the enormous talent pool in the country, but also on India’s image as a channel to the global market. The Armonk-based IT giant is moving development of software-based on SOA to its Bangalore centre. “India is extremely critical in both development and deployment of capabilities around SOA. I don’t see ourselves don’t see ourselves succeeding without leveraging India,” Ambuj Goyal, senior worldwide executive, information management software.

If we want to succeed worldwide, we need to be able to leverage the reach that India has. We may find great talent elsewhere, but India has another edge. It is a channel to the global market,” Mr Goyal said.

One of the poster boys of the India IT industry Azim Premji is interview in the latest edition of Knowledge at Wharton .

On being asked that today, Microsoft's revenues are more than 20 times Wipro's revenues. Here’s what he had to say

“It would be reasonable to assume that Indian services exports in IT and in BPO will grow cumulatively for the next five years at about 35%. They are now growing between 23% and 25% a year. I do not see any reason why leading companies like ours cannot grow faster than the growth of exports from India.

After that, it is a matter of interpolation and desire. Do you keep scaling the organization? Do you use high-leverage models? Do you use productivity tools so that your headcount doesn't increase as fast as your revenues do? That is what we are trying to achieve, and it is not an easy challenge. How do you build maybe 8% productivity growth a year in your business model? To do that, you have to grow 8% a year in terms of revenues with the same headcount, or to grow 16% in revenues a year but with just an 8% increase in headcount.

Employee Learning and Growth

HBR reviews Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent.The review tries to examines the business implications of trends in the pool of current and future employees.Some key points are :

Learning is integral to any organization's capability and productivity, recruiting and retention, and leadership and capacity for change. More importantly, learning can mitigate the coming shortage of labor and skills in two ways.

First, learning is an increasingly visible, important, and on negotiable component of the employment deal. So lifelong learning has advanced from "nice phrase" to business performance imperative.

Second, with labor and skills shortages ahead, organizations must "grow their own" expertise by providing employees with opportunities, both on the job and off, to raise their skills level.

Learning is both a marketing and a productivity tool—a means for attracting and retaining key talent, as well as for ensuring that employees are equipped with the right capabilities both to perform well and to maintain competitive competency levels. Simply put, your company must excel at enabling employees to learn.

Employees want to learn

In nationwide survey of workers and their preferences, "Work that enables me to learn, grow, and try new things" ranked third among ten basic elements of the employment deal, behind a comprehensive benefits package and a comprehensive retirement package. It ranked higher than more pay, more vacation, flexible schedule, flexible workplace, work that is personally stimulating, and even (by a small margin) a workplace that is enjoyable.

Well-educated ones, those with postgraduate work or degrees, rank learning significantly higher than do employees in general.

Employees at the two ends of the income spectrum—lowest and highest—value learning more than those in the middle.

Both young workers and mature ones show above-average preference for learning.

People with more time available—single, childless, with time to socialize—value learning above the average.

Employees of nonprofit organizations show above-average preference for learning opportunities.

Self-employed or part-time workers value learning higher than full-time employees.

People in small companies value learning more than those in large ones.

Employees who work over fifty hours per week show above-average preference for learning.

Those who work primarily from home also have above-average preference to learn.

People in professional and business services, information and technology, and construction show a significantly above-average preference to learn and grow than workers in other industries.

People in education and health services show a slightly above-average preference to learn.

Employees who are currently excited by a new project or assignment show a preference for learning well above the norm, ranking it number two among deal elements.

Some 9 percent of employees (13 percent in large organizations) say they have inadequate training or knowledge for their current positions. Meanwhile, this group as a whole shows lower than average preference for learning and growth opportunities, and a significantly below-average engagement score. So an individual's general passion for knowledge prompts learning more than one's specific job demands do.

HR Metrics

In a report release by Price Water house cooper and Saragota on HR metrics highlights how the structure of an organization influences the matrices to be followed, these metrics may underestimate the actual efforts required to deliver HR services.

For example, many organizations have HR functions such as Staffing and/or IT support that report to and have costs charged back directly to the line. At Saratoga, these types of costs and resources would be considered Indirect HR and the headcount and costs of these individuals would be excluded in Saratoga’s traditional HR calculations. Saratoga’s traditional definition of HR (AKA Direct HR) includes labor, outsourcing, system, and consulting/contractor costs charged directly to a centralized HR budget.

To help illustrate Indirect HR consider the following examples: Company A has an HR Headcount Ratio of 120 and spends about $1,200 per employee served for these HR services. All of Company A’s HR employees and costs are charged to a central budget. Contrast this with Company B which has an HR Headcount Ratio of 180 employees and spends about $1,000 per employee served. You might think that Company B is providing more cost effective HR service delivery, until you realized that all staffing at Company B is charged directly to the business unit and not to HR.

To help organizations monitor their true investment in HR, Saratoga offers Total HR Spend Per Employee and Direct and Indirect HR Headcount Ratio. The formula for Total HR Spend Per Employee is:
(Direct HR Costs + Indirect HR Costs) / Regular Headcount
The formula for Direct and Indirect HR Headcount Ratio is:
Regular Headcount / (Direct HR Headcount + Indirect HR Headcount)

It is important to note that while many organizations have Indirect HR, the majority of organizations do not.To read more download the report

Social Issues getting Strategic

McKinsey Quarterly global survey finds that “Business leaders must become involved in sociopolitical debate not only because their companies have so much to add but also because they have a strategic interest in doing so. Social and political forces, after all, can alter an industry's strategic landscape fundamentally; they can torpedo the reputations of businesses that have been caught unawares and are seen as being culpable; and they can create valuable market opportunities by highlighting unmet social needs and new consumer preferences.

The challenge is to find a way for companies to incorporate an awareness of sociopolitical issues more systematically into their core strategic decision-making processes. Companies must see the social and political dimensions not just as risks—areas for damage limitation—but also as opportunities. They should scan the horizon for emerging trends and integrate their responses across the organization, so that the resulting initiatives are coherent rather than piecemeal.

Executives around the world overwhelmingly embrace the idea that the role of corporations in society goes far beyond simply meeting obligations to shareholders." More than four out of five respondents agree that generating high returns for investors should be accompanied by broader contributions to the public good -- for example, “providing good jobs, making philanthropic donations, and going beyond legal requirements to minimize pollution and other negative effects of business”. Only one in six agrees with the thesis advanced by Nobel laureate Milton Friedman, that high returns should be a corporation's sole focus, the survey found.

According to McKinsey, “executives are hard-nosed about why companies are engaging in this new agenda. Only 8 percent think that large corporations champion social or environmental causes out of 'genuine concern.'

Almost nine in ten agree that they are motivated by public relations or profitability or by both concern and business benefits in equal measure.”

McKinsey says the most enthusiastic proponents of a social role for business are executives in India: 90 percent of them endorse the "public good" dimension.

Executives based in China are the most lukewarm, with 25 percent saying that investor returns should be the sole focus of corporate activity.

“Looking ahead,” the survey finds, “executives expect that a wide range of concerns will dominate public and political debates.

Asked which three issues will have the most impact, for better or worse, on the shareholder value of companies in their industries during the next five years, 41 percent choose job loss and offshoring.

Also at the top of many minds are corporate political influence and involvement; environmental issues, including climate change; pension and retirement benefits; and privacy and data security.”

Eesentially the study tries to highlight the fact that Corporations will go where they feel they are likely to get some of long-term value (for example, its brand, talent, and relationships) .The rationale behind the social investment is to build on the intangibles and so as to create a more socially relvent and conscious workplace.To read more click here

Talent Crisis in America

Shortage of quality technical manpower is not the only worry being faced by American industry today. In a survey conducted by Ernst & Young LLP, ExecuNet Inc., and the Human Capital Institute reveals that, although corporate America foresees a significant workforce shortage as boomers retire, it is not dealing with the issue at present and may be underestimating the strategic challenges ahead.

Some highlights are.


Of survey respondents who believe that the aging workforce is an issue that must be dealt with, 53 percent said it will lead to a workforce shortage.

Sixty-three percent said that retirements will lead to a “brain drain."

While almost 15 percent of respondents’ employees are eligible to retire in the next 5 years, they estimate that just over 10 percent of their current workers are likely to do so.

Approximately 40 percent noted that their top human capital concern is the availability of talent over the next five years. Other highly ranked areas of concern include retention of key employees and talent management (i.e., ensuring that the right employees are in the right positions).

Over 85 percent had no formal retention programs in place. Of those who did, hiring retirees as consultants or contractors, retention bonuses, promoting a culture of generational diversity and pre-retirement planning programs proved to be the most popular.

Survey findings are based on responses from a sampling of senior human resources executives from a cross section of some of the largest employers in the U.S. in a variety of industry sectors.The survey was conducted electronically from November 11, 2005, to December 21, 2005.

The crisis of talented skilled workforce has lead to repeated request by the Industry in America to raise the cap on H1 B visa ,the govt is likely increase the cap.Reports suggest that US Senate committee has approved a bill which seeks to double the number of H1B visas and Green Cards issued annually from the current cap of 65,000 to nearly 1.15,000.

Salary Gap

Study shows that that companies in the US continue to pay the highest base salaries and annual total cash for finance and marketing directors, with those in India paying the lowest.

India may be reaping the rewards of its economic boom, but when it comes to what it pays senior managers, it is still the bottom of the pile.

The survey - covering pay for finance, marketing and HR directors in 14 countries worldwide - found that finance and marketing directors in America earn five times more than their counterparts in India, while HR directors earn over three times as much.

Mercer's Steve Gross said that salaries and annual total cash are generally higher in the US because there is greater competition for talent and employers must pay more for top employees.

"Factors such as retention costs, availability of skills, and productivity influence market rates and determine what an organization must pay to attract and retain talent in the respective locations," he said.

HR Folks don't miss this in your Comp. Review

HR directors emerged as the lowest paid of the three positions. The best paid HR directors are found in the US, UK, and Germany, where employees can earn US$175,000, US$161,900, and US$160,500 respectively. Annual total cash for this position is highest in Germany, at US$227,500, followed by US$219,000 in the US and US$202,500 in the UK.

Again, employees in this position working in Hungary and India earn significantly less annual base pay than in those in other countries – receiving around US$57,100 and US$47,900 respectively.

I-Pods for Induction

In one of my earlier post I talked about I-pod being used as learning tool in educational institutes. Another post reported that Two Scottish hospitals have become the first organisations in the UK to use Podcasting to train new staff.

The Voicemap training system is being used at Glasgow Royal Infirmary and the Princess Royal Maternity Hospital to deliver audio inductions comprising a customised tour of the workplace and identification of particular safety issues.

"Using technology - the iPod - means we can make sure all new staff are trained to exactly the same standard, and it's inevitable that that's a big improvement on a system that relies on other staff and can therefore be vulnerable to human error," said Alastair Kirk, NHS Greater Glasgow's training and development manager.

"What is fantastic is that, as well as working to the same standards, it can also be 'personalised' to each department."