HR Practices need to change to accommodate the Workforce 2.0 Date:   Wednesday , April 04, 2012 Bhuvaneshwar Naik, VP – HR, SAP Labs talks about the changing HR trends and practices driven by the new generation of workforce. Changing HR trends In the last four to five years, from an IT industry stand point a couple of changes have happened in the HR space. A larger focus has been given to the Diversity. It is not just important to see if we have the right number of people but also to see if we have the right mix of people. This will eventually drive innovation, growth and more. The fact that NASSCOM now organizes diversity seminars since last few years is really a testimony of the importance of diversity in work culture. The understanding of the term 'diversity' itself has evolved over the few years. Today it is just not about gender diversity but it also means creating an inclusive work environment by adding a very young work force to our employee list. Another major change is that after 2008 downturn, organizations have become far more cautious about rewards, recognition and benefits to the employees. The cost pressure of benefits has taken a center stage such as health insurance where the cost of utilization is more than then premiums offered by organizations. New HR practices in SAP As mentioned earlier, diversity has become a part of our strategy in India and globally. Today, we have a very healthy gender ratio where 33 percent of our employees are women but our major concern remains about the fact that this ratio depletes when it comes to women in managerial and leadership roles. Our focus now is to build that ratio better and hence we have set a vision of women constituting 25 percent of our leadership team by 2017. The second important practice that we are following is an increased focus on recruiting freshers. Traditionally, SAP never hired a fresher from engineering college but in order to bring fresh thinking into the company, for the first time since two years we have started hiring fresh talent. This way, we are trying to change the whole fabric of the organization. Third aspect is on the leadership front. We have set up an intense training and selection procedure to develop the next level of leaders. If an employee has to become a programming director or a Vice President in the company, he/she has to go through a series of procedures like an online test to check the individual competencies, a panel interview and more before we make a decision if that person has the ability to become a leader in the company. One just can not become a part of the leadership ladder solely because of past work experiences. They have to prove in the interview that they are ready to take up the role. Therefore, we are becoming very selective in choosing the candidates for our leadership ladder. We are also looking at middle managers where we want them to become a strong link and considering this, we put a program for them called the "Managerite", a two year program which should make our managers the best in the industry. Challenges faced Talking from an SAP stand point I am getting more and more concerned about the healthcare costs. It appears that the entire IT industry will go through an overhaul, a mind shift that could happen with regards to this. Hence, I am a little worried about the benefit costs. The second challenge is that it is hard to find individual contributors today. For a product company like ours, we would constantly need to hire architects at a reasonable price, those who are technologically sound and not just managers. This kind of talent is hard to find in India. Though we are a product company, we operate in a service ecosystem. To get a good product specialist has traditionally been a problem for organizations in India. I’m not very much concerned about attrition as I believe we are in a good shape maintaining a very low attrition rate at 10 percent for the whole of last year. Our compensation plans are also quite good. In a nutshell, life is quite good at SAP right now. Aligning people strategy with business strategy We take our people strategy very seriously and it has always been in conjunction with the company’s business strategy. Our people strategies are not just devised by the HR team but rather it comes from the executive board members including the CEO who become pillars in the people strategy. SAP has a 2015 vision for its business and our HR strategies are set in order to see that we realize it. We have made employees believe that if they want to see the change, they have to be the drivers of that change. SAP has created a culture where employees take initiatives in building this organization and running HR projects which enable and facilitate making this organization a better place. This I believe is a big mind shift which we are seeing in some parts of the industry and should become a norm. As an HR it is important to look at the needs of the new generation of employees which are coming out, ensure that we are agile enough to change the way we work and create a happy place to work in. (As told to Vishwas Nair)