Companies invest heavily in talent retention amid slowdown

According to Kamal Karanth, cofounder of Xpheno, the demarcation between employees recognised as ‘superstars,’ ‘finishers’ and ‘also-rans’ is sharper now and is used to grade talent and define increment bandwidths. (Representative image)

With layoffs, hiring freezes and onboarding delays once again in the air, it seems the days of exorbitant job offers and retention bonuses are over.
However, companies – especially traditional firms – are not shying away from investing in their top talent.

According to Kamal Karanth, cofounder of specialist staffing company Xpheno, the cost of replacing talent is considerably high.

“The comparative cost of a retention hike or performance-linked bonus is lower in the context of the larger enterprise impact,” he told Moneycontrol.

However, Karanth said tighter performance monitoring and increment structuring are the aftereffects of expensive hyper-hiring by IT companies in 2021 and early 2022.

According to him, the demarcation between employees recognised as ‘superstars,’ ‘finishers’ and ‘also-rans’ is sharper now and is used to grade talent and define increment bandwidths.

Superstars, who make up 20 percent of an enterprise, may receive up to 20 percent hikes, while also-rans may qualify for increments that are much below the inflation rate. Key cohorts in the tech sector such as services and products are set to see increments in the 6-11 percent range, as per Xpheno.

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With attrition rates still at about 20 percent, Karanth said enterprises have reason to focus on retaining their superstars while keeping the finishers just happy and allowing the also-rans to feel the pinch.

Vedanta Resources, KPMG India, Tata Power, GlobalLogic and Tata Projects are among companies investing heavily in their workforce where holistic policies – and not just monetary benefits – are at the centre stage.

Vedanta Resources

At Vedanta Resources, recognition through awards has an important role to play in retention.

“We also provide our high-potential employees with the opportunity to take up elevated roles even if they show 70 percent readiness,” Madhu Srivastava, group chief HR officer of Vedanta Resources, told Moneycontrol.

This year, Vedanta Resources introduced stock options for all its young campus hires. Emphasising the “purpose at job” factor, the company introduced a revamped companywide car policy in December. In February, 40 percent of the employees had spent more than 10 years at Vedanta.

Tata Power

Tata Power has a Cadre 2.0 programme that allows its employees to opt for higher qualifications, higher skills, higher awareness, and experience. A graduate will be trained to enable him/her to pursue higher studies.

“We look at an employee with a diploma and analyse their profile and on-the-job experience to evaluate if they can become an engineer,” said Himal Tewari, CHRO of Tata Power.

The company is working with employees from a range of subject streams to give them contextual sector understanding.

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“Attrition has affected us but it is not bad. It is still manageable. This is because we have stayed true to our basics – employee care has been the key part for us for many years,” Tewari said.

KPMG India

KPMG India’s strategy to retain talent continues to focus on making the workforce future skills ready, providing holistic rewards and benefits, and fostering a people-centric culture.

The firm implemented a new employee value proposition (EVP) that recognises and reinforces the aspirations of people wanting a meaningful association with what they do at work.

“Attrition has started trending downwards due to actions we have periodically taken,” said Sunit Sinha, partner and head of people, performance and culture at KPMG in India. “Recent developments have only softened that further.”

Tata Projects

Market demand for high-quality talent remains robust but there is no slowdown at the engineering, procurement and construction firm Tata Projects.

Though attrition levels are higher than in previous years, CHRO Ganesh Chandan said it is much lower than industry benchmarks. As investments in infrastructure continue to be high with many large projects announced across the country, he said the war for talent is intense.

This year, Tata Projects plans to roll out increments in the range of 8-10 percent.

“We want to remain competitive in the market space. Additionally, we are also working on many incentive programmes that are directly linked to business/project success,” Chandan said.

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Chandan said the company has moved away from monetary rewards and incentives towards long-term investments in career growth. The focus is more on retaining critical talent and investing in their long-term development by offering diverse career growth opportunities, executive leadership education and coaching, and setting benchmarks in compensation and long-term incentives.

Tata Steel

The company recently launched the role/project marketplace to facilitate the internal career movement of employees. Besides, it aims to provide fast-track promotions in the upcoming financial year.

“Tata Steel consistently works on our people's policies to ensure attraction and retention of talent, which is one of the prime reasons why we have not seen an alarming attrition rate even in the past 2-3 years,” an official spokesperson told Moneycontrol.

Attrition at the company has been at 6.8-6.9 percent in recent years. About 92 percent of the senior leadership have spent 22-30 years on average at Tata Steel.

GlobalLogic

Working mainly with Gen Z and millennials, IT company GlobalLogic, a Hitachi unit, offers employees opportunities to ideate and innovate.

Through its 13 academies, and certifications, among others, the company tries to make sure employees are constantly learning what they love – technology.

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“The objective is to retain the best people and while recent developments may indicate a decrease in numbers, they may not necessarily indicate a decrease in the quality of attrition, which therefore, must be a huge area of continued focus,” said Rajesh Rai, VP of people team and head of HR, India, at GlobalLogic.