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Dilemma Of The Downturn – Time for Leadership and Protecting Organizational Culture?

The recession is making organizations rethink their strategies on talent and cost management. A Price Waterhouse Coopers study on India  – ‘Rethinking your approach to People: Managing the effects of the Downturn’ among 100 respondents from across Indian industries showcases some of the trends.


The top three trends of organizational interventions are:

a) 75% revisiting the recruitment plan. Hiring has almost seized and most companies are even dropping offers shared at campus. Smaller outfits are hiring in pockets but retrenching is something they are avoiding. From what I hear, it is couched under the ‘performance management’ tag to make it sound less dismissive. Among the sectors, IT/ITES, FMCG, Manufacturing and BFSI (57%) have been hit the worst.

b) 70% surveyed are re-looking at their employee policies and practices. Those familiar with how the industries were pampering their employees just a few years earlier may be flabbergasted at the sheer pace at which these same policies and practices such as travel, allowances, perks are being restructured. I fear some have even gone overboard.

c) The deepest cut of them all. 69% of participants are changing the compensation policy. Some have frozen salaries and for some it has even come down. What I hear is that performance linkage to pay has got more focus and increments are all but history.
While many may argue that these are knee-jerk reactions and short term, others call companies ‘opportunistic’ for ‘right sizing’ and bringing down spiraling salaries and expectations.

My question is: if there is so much emphasis on efficiency and performance management, who is focusing on keeping the organization’s values and culture on track? Isn’t that a priority especially during tough times?

Also, unlike in the US where the recession has hit the hardest and leaders have taken pay cuts and no raises, I am yet to hear of such measures in the Indian context. Is it a case of the impacted sinking even more and the top of the pyramid staying afloat? Mystifying to me.

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