HR Consultancy in India

HR Advisory Sector in India

The HR Advisory space in India is a fast -developing sector and has been witnessing consistent growth every year. Many organizations (especially international companies operating in India or large progressive Indian conglomerates) outsource multiple HR functions to regulate overall costs, to create a strategic HR function with an aim of delivering improved customer service and superior HR experience to a global workforce. Intricate employment related issues like Statutory Compliance and Employee Relations advisory is more often handled by external consultants for the types of companies mentioned above.

Generally, it is observed that the SMEs choose more to rely on external HR consultants and utilize their expertise on a ‘need base’ instead of hiring specialists in the central functions.

However, the companies operating in a highly regulated environment (e.g. Banks, Pharmaceutical companies, FMCG, Insurances, Aviation and Hospitality sector etc.) usually have their in-house legal and employment counsel. The organizations under the aforesaid sectors employ a huge employee pool with offices across different cities in India and therefore they find it easier and practical to reserve specific departments to address policy issues, ER problems or compliance matters. Having said that, the external liaison part of compliance (dealing with government agencies) even by such companies is outsourced to private labour law practitioners.

So, it is the SME sector (primarily MNCs) who utilize more help of private HR Advisors and Employment law practitioners…


The Growth Factors

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Inarguably, the HR Consulting area is seen as a high growth area. The ‘Make in India’ and ‘Digital India’ campaigns championed by the PM Modi led government is attracting many global companies to invest in the country as well as encouraging young entrepreneurs to establish businesses in India.

With the influx of new companies in India, employees/candidates have more options available to contest their talent. This leads to high attrition at times. ‘Shelf-life’ of employees in one particular organization has drastically reduced, compelling the progressive organizations to revisit their existing employee benefits, HR policies and procedures, working conditions and other employment practices. Naturally, this has facilitated to a higher demand for HR Specialists/Advisors.

With Tech start-ups mushrooming all over the country, the IT sector of India is going through a big ‘talent turmoil’. The employee churn is seen highest than ever!

In such environments, ‘Staff Retention’ is paramount and so the Companies recording high attrition rates consider luring their employees with attractive perks, compelling benefits, recognition opportunities, performance rewards and progressive HR practices.

Companies (whether small or medium sized) in times of change, expansion or crisis mostly look at an external intervention from a HR perspective as they believe that an external consultant would be looking through his lens and offering a more pragmatic, sustainable and value-based solution in such events. This entire sequence of events has been working in the favour of HR Advisory companies. A somewhat similar boom is seen by Coaches and Learning & Development specialists.

For the past 3-4 years, revolutionary changes have been noticed in certain areas of HR. Some illustrations of this are the change in Maternity Benefits Act, strict imposition of the law pertaining to Sexual Harassment of Women at Workplace, revamping age-old Shops and Establishments Act etc.

In the recent elections in India (those concluded in May 2019), the Narendra Modi led government has been chosen consecutively for the second time. This government, alike their first term is expected to continue bringing in more positive and sustainable changes in the employment world.

However, change in laws generally brings in ambiguity and this leads to a surge in enquires directed towards HR Advisors. Regularly, HR Advisors are invited for seminars or chat shows to contribute on specific topics around new and amended legislations of employment. Representatives of companies attending such seminars claim to be receiving more clarity on the subject and the in-house HR teams are also enriched with the knowledge required to run their day-to-day HR, compliance or ER issues.

The current government is also pegged to address some grass root level issues of employment of the ‘work-men’ category. Therefore, enhanced social security is being brought to unskilled and semi-skilled labour force.


The Start-up Ecosystem and Role of HR

If your company is newly set up in India you may have many priorities before you viz, Capital requirements, Licenses, Banking, Insurance, Real Estate, Business plan, Distribution-Agent network, IT infrastructure and PEOPLE! Out of the other priorities, the PEOPLE factor (a.k.a. Human Resources or HR) still remains a significant point of debate and consideration.

India is certainly a labyrinth when it comes to employment laws and statutory labour norms. While India is shining with success stories and new milestones every day, the fact remains undisturbed that the employment world of India is still one of the most complex environments in the world of work.


Role of a HR Advisor

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While you can focus on your core competencies, a professionally competent HR Advisory partner would guide you efficiently on the areas in HR which are complex, or which need better handling.
If you are managing a fairly new business in India and have already established an office here, then some of the questions listed below may be on your mind already:

  • Is your team a small bunch of professionals who are passionate about their work but they lack Teamwork?
  • Does your organization feel the need to offer a competitive compensation and benefits package?
  • Have your employees expressed a need for better (and friendlier) HR policies?
  • Have you experienced that your lead Manager’s time is invested (or wasted??) in resolving employee relation issues or the team really complements his/her pace of work?
  • Do you want to see your Business Managers as efficient and effective People Managers?
  • Is your team delivering as per the acceptable standards of performance or should they should be coached to achieve performance?
  • Have you had any instance of Misconduct within your company, particularly harassment or sexual harassment of a female colleague?
  • Does your team see your brand in the same manner as you want to see them?

If the answers to most of the above questions is ‘YES’ then probably you may require professional and competent HR guidance on these matters. New businesses (esp. SMEs) usually don’t have the budget for full time HR members and most of the time it is seen that the business managers don’t have the necessary awareness of the various applicable HR compliances and knowledge of the rapidly changing issues of employment.

In such scenarios, Human Resource Advisors can offer a platform that a Start-up needs to attract and retain talent, maintaining compliance and adhering to all applicable employment laws.

Changing legislations, record keeping norms and the legal ramifications of improper management of personnel can quickly push your organization southwards. Professional HR Advisors can be the ‘sounding boards’ of the CEOs of newly set up companies in India as they can seamlessly mitigate the risk of employee unrest, parity issues and potential non-compliance hazards. This would also help the employers to concentrate on providing avant-garde services and stay focused!

It is worth noting that the environment and cultural fabric in India is thick with emotions. Therefore, it doesn’t encourage the ‘Hire & Fire’ policy. Albeit, if such need arises, professional HR Advisors can best handle the situation maintaining the necessary balance between the task at hand and the company’s goal and values, thus keeping legal hassles at a distance!

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