Talking to All Things Talent, Satyajit Mohanty, VP – HR, Crompton Greaves Consumer Electricals Limited shares his insights on HR practices related to the consumer durables industry, hiring goals, articulating EVP, and policy changes at Crompton Greaves done in the last one and a half years amid Covid.
Can you give us some background in terms of the entire industry, like consumer durables, consumer manufacturing as an industry, from the point of view of workforce talent?
Unlike FMCG, we don’t have a well-developed network of HR managers in the consumer durable industry because it’s a mix of professional companies and family-run companies. But I’m saying this from what I have understood from interaction with employees, media stories, etc. So I put a caveat there about my understanding of the durable industry. It is an industry which is fragmented in nature. Many of them are family-run businesses where the exchange of HR data is not prevalent and the practices are very different. I’m talking about HR practices related to the consumer durables industry, like the electrical consumer industry, in which primarily the major players, we being one major player, in the industry are Havells, Bajaj, Orient, Signify, etc. So one thing which outlines this industry is that it is doing very well in the Covid times. Not just us, but most of our major competition has been doing well in terms of growth and market growth. When Covid started, quite a few organisations went into a situation of downsizing and salary reductions in the industry. However, all these things were reversed sometime in October last year, when the Covid situation improved drastically, the salary cuts which had been enforced were restored, and of late, there has been a lot of hiring happening in the industry.
We are one of the few players in our industry who probably did not go for any downsizing last year. We did not lay off a single person, not even contractual manpower. Secondly, there was no reduction in the salaries of employees. In fact, we went overboard in improving the benefits, driving a host of employee engagement activities, training, etc. Thirdly, while many other companies were downsizing and reducing employee numbers, we significantly increased the employee headcount by creating an entirely new channel of hiring. I think it was one of the highest in the industry.
So, these are some of the broad trends, which I’ve seen in the last one and a half years in our industry. Again, this is anecdotal data because we have not done concrete benchmarking, but we compare notes.
You highlighted the family-run business which is also an interesting factor because with many employees working from home, the priority for HR has also increased in the last two years. A family-run business might not have this kind of importance given to this particular segment. How did the perspectives change among the promoters and what were some tech disruptions that happened in the industry?
There have been some companies that have introduced progressive employee benefits programs like the enhancement of medical benefits. But by all accounts, the kind of policy changes we have done in the last one and a half years during Covid seems to be a cut above the rest. I have a lot of employees from other companies who come and join us. We do get feedback from them and I’m talking in terms of HR policy changes. For example, during Covid-19, we doubled and tripled our medical and associated benefits. Not that you won’t find many people who will fall in the same bracket as we do. However, every time there are policy changes we try to informally find out what policy is prevailing among the biggest competition. What I’ve seen is that we are slightly ahead of them in terms of changing policies. For example, recently, we changed the car policy. We enhanced the benefit by almost 40 to 50 percent. Our productivity per employee is the highest in the industry at this point.
Can you give a number about your particular company in terms of the workforce?
There are approximately 5000 employees. 3000 odd would be at the factories. We have seven different manufacturing locations – two in Goa, one in Ahmednagar, one in Baroda, and three in Baddi. About 3000 employees, both direct and indirect, are distributed among them, the balance is distributed primarily in sales and other functions. Sales should be approximately 1000 employees. The balance would be the other functions.
In 2022, where do you see these trends leading to? And do you predict anything that hasn’t happened yet? But you see things brewing somewhere?
From a talent perspective, I have not observed any breakthrough thought process in the last five years. For example, let’s say how do you revisit the HR processes and practices deeper in line with your digital transformation? I have not observed those practices in the last couple of years in our industry. It seems to be one of those industries that try to do the basic stuff pretty well, instead of going high tech. If I extrapolate this thought process of the last 6-7 years to the coming 2-3 years, yes, they will start using more data. They will try to make processes more robust. But my take is, it was incremental in nature in the last two to three years. It will put HR talent as a different genre. This has been the trend for a long time in the industry but has not leveraged the trend significantly.
“From a talent perspective, I have not observed any breakthrough thought process in the last five years. For example, let’s say how do you revisit the HR processes and practices deeper in line with your digital transformation? I have not observed those practices in the last couple of years in our industry. It seems to be one of those industries that try to do the basic stuff pretty well, instead of going high tech.”
Think of it, how do you use data in talent assessment? Very few organisations are using psychometric tests or big data in those fields. India is not a world leader in terms of applying state-of-the-art practices in HR, from a digital perspective. We look toward China or America for state-of-the-art practices in HR talent management. Since most of our companies are Indian companies, our horizon to that extent becomes much more limited because we don’t benefit from global practices.
Let’s take the example of Unilever. Its local management may not be very forward-thinking in terms of talent, but since they have to adhere to global standards as the company is a global one, they will have to comply. That way the local branch also benefits from global practices. Therefore, I don’t think any breakthrough in terms of innovation can be expected from this segment as all are Indian companies.
You mentioned most of the companies that are working in this space are Indian, so what happens to the talent pool? Is there too much tug-of-war?
Yes, indeed. There are two things. If I look at the talent landscape from three or four years ago, 90 percent of the talent movement would happen between the industry and within the industry. However, in the last two to three years, some significant shift is happening. For example, a lot of people we hire are not from our industry right now. Many of our competitors have become much more open to hiring people from other industries. Three years back nobody would even think about hiring a territory manager or a frontline guy from the telecom sector, but right now, everyone from our industry has opened up to the possibilities of hiring people from other industries like FMCG, telecom, etc. So, within the industry talent movements have gradually come down.
“If I look at the talent landscape from three or four years ago, 90 percent of the talent movement would happen between the industry and within the industry. However, in the last two to three years, some significant shift is happening. For example, a lot of people we hire are not from our industry right now. Many of our competitors have become much more open to hiring people from other industries.”
Has that significantly increased the attrition rates also, in the industry?
Starting from April last year, there has been sizeable downsizing or freezing of recruitment in the industry for at least six to eight months. Now that everybody’s hiring, attrition is going up. How much it has gone up for the other organisations is largely anecdotal data because most companies in our space don’t share the data with the competition.
Any employee practices that you would like to introduce in the coming year that would increase your employer branding initiatives?
Employer branding is an area of opportunity for us. We have a very strong brand in terms of products and people get attracted to our brand itself. However, we don’t have an articulated employee value proposition even though we have been there for the last seven years in the industry, doing business extremely well. For the first time, in the company’s history, we have articulated EVP for the employees. It is around three topics, one is ensuring the growth of employees to transform Crompton and innovate. We grow employees by giving them the empowerment to transform and innovate Crompton. So, the keywords here are – growth and empowerment. The second is transformation and growth through innovation. We may not boast of a state-of-the-art talent management system like some of the world-class companies, but what we know is that we are best at growing employees by giving them empowerment and autonomy.
You mentioned that you are also hiring now since things have opened up. What would be your hiring goals for the coming years and what kind of talent?
We have been hiring since the Covid times. Last year, we even did significant hiring in the months of July, August, and September. It is just that we put a recruitment freeze only for three or four months in April. We are pursuing a single goal as a part of our long-term business strategy of five years which just refreshed around a year back. We identified five strategic focus areas where we want to have the best-in-class talent in the industry.
Therefore, our hiring goal is to have the best-in-class talent. For example, in one of the areas like distribution, we want to have the best-in-class talent. At a transactional level, of course, we have our KPIs and everything to measure how much we are progressing towards it, from a hiring perspective. As per our internal talent philosophies, 70 percent of our talent should be from in-house which has got an implication on our talent sourcing perspective as well.
We are currently in the final leg of this process where all the talent discussion is concluding. And we’re identifying the next generation of leaders. It’s a process that’s been there for quite some time right now. So we are in the second cycle of such discussions.