Sustainability of high compensation package

15 March 2007

The threat of employee attrition is forcing companies to develop policies and procedures to adapt to the changing environment says Dr. Chandra Mauli Dwivedi, HR head, Financial Technologies Group.

Talent acquisition and retention is increasingly becoming one of the most critical challenges for organisations as the demand-supply gap keeps increasing. The recent NASSCOM-Hewitt total reward study supports this view.

India is forecast to become the world's fastest growing economy between 2006 and 2020. The war for getting good talent is equally difficult as retaining them over the long term.

Companies regarded as "employers of choice" believe that people are central to their organisational success. They develop HR strategies that are clearly aligned to their organisation's business goals. Typically, such organisations have also succeeded in pioneering innovative concepts in employee rewards.

Beside salaries, these companies also work proactively in providing a better work environment as well as learning and development opportunities. They also find innovative ways to identify their top 10 per cent performers and bottom 10 per cent laggards and use this as the base for differentiating compensation packages since it is impossible to reward very high salaries to each employee.

Lately India has emerged among the countries with the highest salary increases. This is because of the phenomenal increase in job requirements especially in areas where domain-specific expertise is critical and for people in the mid and upper management levels who have acquired crucial hands-on experience.