Saturday, November 11, 2006
Insurance cos need shelter from attrition
11th November 2006 - Economic TimesINSURERS provide cover to everybody against weather, catastrophe, theft, and business loss, but there are two things they can't insure themselves against - talent shortage and attrition . Major shortage exists at frontline level (first level sales managers ). An extreme shortage exists in getting people for the middle level where the required skill sets are broad-based . Even actuarial talent is in short supply at this point of time. The industry is in a typical Catch 22 situation - as the industry grows it will attract more talent but it has to have sufficient talent in the first place to kick-start this rapid growth . According to a leading recruitment agency, just about 5% of fresh candidates opt for the insurance industry. The pay structure at higher levels is comparable to other sectors, though it is lower at the entry levels compared to the other industries. Says Sugata Dutta, executive vice-president of HR, Kotak Life, "The USP of the insurance sector is the lucrative variable pay it offers. The higher variable pay structure works for people who are entrepreneurial in nature." Higher variable pay does not appeal to a majority of Indians who feel secure with higher fixed pay and a low variable component . These factors worry insurance industry players because the manpower required to support the growth will have to grow three times over the next five years. Currently, the insurance industry , along with insurance brokers , has close to 40,000 people on its rolls and keeping in mind the growth that this industry is posting, this figure is expected to touch 1 lakh in the next 4 - 5 years. Newer players entering this sector are only making the issue more serious. As a result, the insurance sector is likely to see a lot of attrition and churn for at least the next two years. Vikram Tandon , regional HR director, American International Group, "Attrition is becoming a way of life, and to deal with it companies will have to work towards developing pipelines of talent. Companies will also need to show better careers within the insurance sector, to attract and retain talent." Salary comprises a significant portion of the overall costs of any insurance company. From the time a person decides to quit and till the time he is replaced and trained, a company, on an average, loses salary of about 7-12 months, taking the dip in productivity into consideration. In the past one year, the insurance industry has witnessed an attrition rate of around 25-30 %, attrition at the lower-end is as high as 50-60 %. At the higher level, insurance companies, besides basic salary and bonus, are trying to retain talent by way of Long Term Incentive Plans and ESOPs, the benefit of which is not immediate. Insurance brokers are at a greater disadvantage, because there is a shortage of talent in the industry and within the available talent pool, the attractiveness of working with a broker is even lower. The other concern for the insurance broker is the lack of adequate number of training centres.
IT cos look outside tech orbit to hire
11th Nov 2006 - Economic TimesTHIS is the IT industry's clarion call to all those who have been left behind in the race to become 'Techville' inhabitants. With IT companies such as Infosys, Wipro, Patni and Polaris now eyeing professionals in other sectors to meet their manpower and talent needs, thousands of non-IT professionals are quitting their traditional jobs to jump onto the tech bandwagon. Take Patni's case - the company trains non-IT professionals with evening classes. The part-time classes - packed with modules on sofware training and practical shop floor lessons, allow non-IT professionals to test the waters before joining the tech fraternity. Targetting the young workforce , PCS organises these free-of-cost evening classes to attract non-IT professionals from sectors as diverse as insurance , manufacturing, finance and banking. IT major Infosys, on the other hand, expects to add around 1,000 professionals this year from non-IT sectors for its domain expertise. Others such as Wipro and Polaris too are busy absorbing professionals from varied industries holding glamour, healthy prospects and better compensation as a lure. "The varied domain expertise that these professionals get to the company is what makes them extremely attractive, unlike the fresh graduates. Our industry needs a lot of non-software expertise as well because of the kind of clients we have on board," says Patni training general manager Sunil Kuwalekar. The company has 80% conversion rate from these evening classes. The professionals who flock to these classes are engineering graduates having majored in disciplines like mechanical, manufacturing or chemical engineering, but with little software knowledge. Infosys, meanwhile, is planning to hire from industries such as manufacturing , automotive, banking and financial services. "The hirings are driven by our intent to recruit people with domain expertise of a particular industry. These people are then used as managers in particular practices. We look for learnability amongst such professionals," says Infosys HR head TV Mohandas Pai. Endorsing Infosys' views, Polaris Software chairman Arun Jain - the company hires from banking and insurance sectors - says, "These professionals understand the business requirements of customers and enable a better solutions delivery . They are not software programmers but business analysts who come from nationalised and private banks." Polaris gives these professionals training for about four weeks. "The programme imparts the perspective of software so that they understand customer requirements and can interact better with customers who are leading global banks," he adds. Wipro shares the same aggressiveness. But its strategy is primarily driven by the need to get domain experts, says Wipro strategic sourcing vice-president Achuthan Nair. On the flip side, HR honchos say the implication of this movement of talent will cause disruption in sectors from where these professionals are coming in. "This influx of talent from non-IT sectors indicates a definite dearth of talent within IT and training professionals from other sectors is better than training freshers as they already have instilled in them a corporate culture,"says Rakesh Malik, practice leader, Hewitt India.
Friday, November 10, 2006
Govt staff may get assured pension return
10th November 2006 - Economic TimesTo drum up the support of Left parties for the new pension scheme (NPS), the finance ministry is working on a plan to provide government employees an option of guaranteed minimum return on their pension contribution. However, the scheme, if rolled out, could mean government employees opting for it will have to shell out more than the 10% of their monthly salary towards their pension benefits. All Central government employees , post-January 1, '04, are part of the NPS. The proposal, floated as a Cabinet note, says all pension fund managers (PFM), preferably a public sector entity, will be entrusted to buy such a guarantee from the market and offer it to those government employees , who are risk-averse . The PFM will bear the price of the guarantee and, in turn, charge a fee from the subscriber. The guarantee, according to sources, is likely to be in the form of a minimum replacement rate (pension as a percentage of the previous earnings of the employee). The proposal is expected to assuage the concerns of Left parties who have demanded that workers should get 50% of the average of last three years' monthly payment as their pension. The passage of the proposal would also make it easy for the Pension Fund Regulatory and Development Authority (PFRDA) bill for opening up of the pension market in the country. There are around 3,00,000 Central and 16 state government employees who have become part of the NPS. Sources said the government was also toying with the idea of initially permitting only one fund manager - a public sector entity. As the new pension system evolves and matures, more operators may be brought in. The NPS marks a shift from the system of defined benefit to one of defined contributory pension system, with the facility to get handsome rewards in the long-term through investment in equities and bonds. The government has already indicated that a subscriber will have the freedom to invest his money totally in government bonds. This will anyway protect his capital and if he remains invested so, the return will also be guaranteed. ASSURED LINE PF managers to bear price of guarantee and charge a fee from subscriber Guarantee is likely to be in the form of a minimum replacement rate Proposal may assuage concerns of Left parties who have demanded 50% of last three years' monthly payment as pension
India Inc sees higher attrition in Asia
October 11, 2006 -Mumbai, India Express Indian companies are battling higher attrition rates than their Asian counterparts. India Inc faced a 20 per cent attrition rate in 2005, against 14.5 per cent in 2004, while companies in Asia saw 16 per cent attrition in 2005, up from 14 per cent in 2004, according to Hewitt's Attrition and Retention Study Asia Pacific 2006.
Outside firms paying higher salaries is the main reason employees quit their organisations in Asia. The study says 21 per cent of Asian firms cited external inequity of compensation as a prime reason for employees changing company. Limited growth opportunities and role stagnation ranked second and third respectively.
In this count also, Corporate India faces more heat — 59 per cent of Indian firms cited bigger pay packets as a reason for their staff leaving.
Andrew Bell, head of Hewitt's talent and organisation consulting practice in Asia, said, “In high-growth markets, it’s now easier for employees to move from one company to another, and so the complexity and cost of keeping the right people in an organisation increases.”
Turnover was highest at the professional/supervisor/technical level at 39 per cent of the total attrition and lowest among senior/top management at just 0.5 per cent. Interestingly, attrition among employees identified as high performers was much lower, indicating that most organisations are successfully retaining top performers.
The study says the Asian banking and finance sector saw the greatest employee turnover at 25 per cent, which is likely brought on by stable economies, growing markets and increased retail investor confidence.
At 23 per cent, attrition was also high in the outsourcing industry. The lowest turnover was recorded in the manufacturing sector at 11 per cent.
Though the survey does not have breakup of sectoral attrition rates in India, outsourcing industry has the highest rate at 30-35 per cent, according to industry body Nasscom. And the influx of private banks has pushed the rate to 20 per cent in the India banking sector.
Interestingly, a survey by Mercer Human Resource Consulting highlighted that finance, marketing and HR directors in India get less than average for this position in Europe, US and East Asian countries. Finance directors earned a base salary of approximately $53,800. Again, HR directors earned significantly less annual base pay at $47,900 respectively. Base pay for marketing directors ranges between $203,100 in the US and $40,000 in India.
Attrition hits Sony India hard
DNA Newspaper - Sept Issue
MUMBAI: Eleven years after it was set up as a 100% subsidiary of consumer electronics major Sony Corporation, Japan, Sony India is facing one of its toughest crises in the form of attrition of key marketing personnel.
Over 15 senior-to-middle level marketing professionals have quit the company in the last six months or so. And this week, the product manager for high-end television, Kumar Menon, put in his papers.
Industry grapevine suggests that a strong hierarchical structure, exacerbated by the influx of Japanese managers who formed another layer of top management, was the cause of the current crisis.
"A new level of management structure has been created between the marketing head and product heads. Such a structure exists nowhere in the industry and it has completely blocked the growth prospect of middle level managers," despaired one of the product heads, who quit Sony India recently.
Until a year ago, about ten product heads of the Japanese home entertainment major were reporting directly to the marketing division head, Katsuhiko Murase, a Japanese national. Then, the company decided to create a new hierarchy by bringing in four business group heads - Yamano Kuchi for color televisions, Ken Nakazava for Personal Audio, Kent Tanigaki for IT products and Takigawa for digital imaging business - all of whom are Japanese nationals.
And soon after the new business group heads joined, the product managers as well as other middle level mangers from marketing, communications and business opted for better career prospects elsewhere.
The first to quit was Amitabh Bhatnagar, product head, separate components and DVD players (home theatres). And since April, middle level managers have been following suit.
Among them, product manager for audio segment Akash Agarawal has joined Reliance Retail, product manger for home theatres Vivek has joined Microsoft and Chandigarh branch manager Ashish Sharma has joined LG.
In fact, around 7 out of 11 product managers have already quit. Over 8 other middle level professionals from marketing communications and business plan have also put in their papers in the last six months.
"It took some time for everybody to react to the new hierarchy and look for the right opportunity to switch over," said a product head who quit recently.
As it is, the company has not been able to match the industry growth rate in colour TVs and Korean chaebols LG and Samsung are doing better than it. On top of it, even in the handycam, audio and personal audio category where it has a leadership position in India, the growth rate was affected this year. Observers attribute this to the present human resource crisis.
You don't need techies to do IT
NEW DELHI: This is the IT industry's clarion call to all those who have been left behind in the race to become 'techville' inhabitants. With IT companies such as Infosys, Wipro, Patni and Polaris now eyeing professionals in other sectors to meet their manpower & talent needs, thousands of non-IT professionals are quitting their traditional jobs to jump onto the tech bandwagon.
Take Patni's case — the company trains non-IT professionals via evening classes. The part-time classes — packed with modules on sofware training and practical shop floor lessons, allow non-IT professionals to test the waters before joining the tech fraternity. Targetting the young workforce, PCS organises these free-of-cost evening classes to attract non-IT professionals from sectors as diverse as insurance, manufacturing, finance and banking.
IT major Infosys, on the other hand, expects to add around 1,000 professionals this year from non-IT sectors for its domain expertise. Others such as Wipro and Polaris too are busy absorbing professionals from varied industries holding glamour, healthy prospects and better compensation as a lure.
"The varied domain expertise that these professionals get to the company is what makes them extremely attractive, unlike the fresh graduates. Our industry needs a lot of non-software expertise as well because of the kind of clients we have on board," says Patni training GM Sunil Kuwalekar.
The company has 80% conversion rate from these evening classes. The professionals who flock to these classes are engineering graduates having majored in disciplines like mechanical, manufacturing or chemical engineering, but with little software knowledge.
Infosys, meanwhile, is planning to hire from industries such as manufacturing, automotive, banking and financial services. "The hirings are driven by our intent to recruit people with domain expertise of a particular industry. These people are then used as managers in particular practices. We look for learnability amongst such professionals," says Infosys HR head TV Mohandas Pai.
Endorsing Infosys' views, Polaris Software chairman Arun Jain — the company hires from banking and insurance sectors — says, "These professionals understand the business requirements of customers and enable a better solutions delivery. They are not software programmers but business analysts who come from nationalised and private banks."
Polaris gives these professionals training for about four weeks. "The programme imparts the perspective of software so that they understand customer requirements and can interact better with customers who are leading global banks," he adds.
Wipro too shares the same aggressiveness. But its strategy is primarily driven by the need to get domain experts, says Wipro strategic sourcing vice-president Achuthan Nair.
On the flipside, HR honchos say the implication of this movement of talent will cause a level of disruption in those sectors from where these professionals are coming in.
"This influx of talent from non-IT sectors indicates a definite dearth of talent within IT. And training professionals from other sectors is better than training freshers as they already have instilled in them a corporate culture," says Hewitt India practice leader Rakesh Malik.
Thursday, November 09, 2006
Due diligence key to good hiring: KPMG
9th Nov 2006 - Business StandardRISK MANAGEMENT: Screening is vital for staff in financial reporting.
An important part of an effective fraud and misconduct prevention strategy is the use of due diligence in the hiring, retention, and promotion of employees, agents, vendors, and other third parties, according to KPMG’s Fraud Risk Management Report 2006.
Such due diligence, it says, may be especially important for those employees identified as having authority over the financial reporting process.
The report defines fraud as ‘any intentional act committed to secure an unfair or unlawful gain’; and refers to misconduct as an umbrella term that covers ‘violations of law, regulations, internal policies, and market expectations of ethical business conduct’.
The scope and depth of the due diligence process typically varies based on the organization’s identified risks, the individual’s job function and/or level of authority, and the specific laws of the country in which the organization resides, according to the report.
There are certain situations where screening third parties may be valid. For example, management may wish to screen agents, consultants, or temporary workers who may access confidential information or acquisition targets that may have regulatory or integrity risks that can materially affect the value of the transaction. Due diligence begins at the start of an employment or business relationship and continues throughout, the report says.
For instance, taking into account behavioural considerations— such as adherence to the organization’s core values—in performance evaluations provides a powerful signal that management cares about not only what employees achieve but also that those achievements were made in a manner consistent with the company’s values and standards, the report says.
It argues that management should incorporate fraud and misconduct awareness initiatives into training programmes that seek to educate employees about their obligations concerning reporting fraud and misconduct.
An organization’s code of conduct is a vital vehicle that management can use to communicate to employees on key standards that define acceptable business conduct, the report states.
A well-written and communicated code, it says, must provide ethical decision-making tools to assist employees in making the right choices and make clear reporting channels and viable mechanisms that employees can use to report concerns or seek advice without fear of retribution.
Who's afraid of trade unions?
9th Nov 2006 - Economic Times
The business process outsourcing and information technology industries are in a tizzy, following the left-wing trade union Citu's move to unionise their workers. Are unions such a menace? They can be, but needn't be. In fact, unions can and should become sources of rapid productivity gains and faster economic growth. This will strike most readers as pure drivel, but only because it doesn't fit in with the usual stereotypes about employers and workers. Historically, unions have played an antagonistic role vis-a-vis employers. Karl Marx famously said, "Capital is dead labour, which lives vampire-like by sucking living labour, and lives the more, the more labour it sucks." That employers can gain only at the expense of workers and, conversely, workers can gain only at the expense of employers has been a basic principle in the relationship between trade unions and industrialists. Traditional, too, has been employers' opposition to unions. However, the asymmetry in the deemed legitimacy of associations of workers and of employers have not escaped scholarly attention. This is what Adam Smith wrote on the subject in the Wealth of Nations: "We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination." Such antagonism was a reality and a legitimate facet of the respective projects pursued by capitalists and workers in the 19th century. However, times have changed. So has the nature of the relationship between workers and capitalists. The experience of the last century, particularly its second half, is that of shared prosperity by workers and capitalists, with the well-being of one section being dependent on the well-being of the other. The creation of the mass market in the twentieth century put paid to the notion that workers and employers have to be necessarily waging class war at all times. The better the wages of auto workers, the more money they will have to buy washing machines, refrigerators, etc. The better the wages of workers across the board, the greater the demand for cars and for other industrial produce. The fewer the hours workers spend at work, the greater the growth of industries that cater to leisure: food, music, movies, newspapers, books, sports, television, hospitality and travel. If every industry seeks to maximise its own profit margin by squeezing wages as far down as possible, that would depress the collective demand for goods and services and thereby reduce business volumes and profits.
Check your medical deduction benefits
9th Nov 2006 - Economic Times
Individuals can avail of several deductions under the Income-Tax Act for medical expenses. While the deduction available for payment of medical insurance premium is well known, a benefit is also available when an individual pays an amount for maintenance or medical treatment of a disabled dependent, who is a relative of that individual. Several conditions have to be fulfilled in such circumstances.
Let's take a look at what one has to do to claim this benefit.
Tax benefit offered
Under Section 80DD, the disability benefit is available to an individual with a dependent on whom medical expenses have been incurred. The first thing to understand here is that this benefit is a deduction.
This means that the income of the individual is reduced to the extent of the deduction available. Thus, the net figure after this deduction is the actual income used for the purpose of calculating tax. Second, this benefit is available on medical expenses incurred on the dependent of the individual; hence, the person has to fall within the definition of a dependent, as specified in the Income Tax Act.
The basic condition is that the taxpayer has to incur expenditure for the medical treatment, training and rehabilitation of a dependent. Another way to obtain a benefit is to deposit a sum with an insurance company for maintenance of the dependent.
The dependent here is a person with disability, and may include spouse, children, parents, brother or sister. The person has to be wholly-dependent upon the individual for support and maintenance and such a person should not have claimed tax benefit under any other section for his/her disability.
Additional conditions
The term disability is defined in the Persons with Disabilities Act, 1995 and covers blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation and mental illness. Now, even autism, cerebral palsy and multiple disabilities have been included in the provisions. The other condition that has to be adhered to is that the disability has to be certified by the respective authorities.
The medical authority has to issue a disability form as per the rules, and this certificate has to be attached with the income tax returns. The specification of disability is important because a higher or severe disability may result in higher benefit.
Amount of deduction
Irrespective of the amount that has been spent on the person, or the amount that has been deposited with a life insurance company for the coverage premium, the benefit/deduction available to the individual is a fixed sum of Rs 50,000. In case the disability is over 80%, this figure rises to Rs 75,000.
Claiming deduction
The key to claiming the deduction rests on two factors. The first is that it falls within the range of what the overall scheme allows. The second is that the dependent person has to fall within the definition. A good example is the amount spent on treatment of a dependent grandfather.
Here, the problem is that the grandfather is not a dependent for the purpose of tax benefit. Hence, this is not allowed as a deduction for the individual.
Withdrawing PF may no longer be easy
9th Nov 2006 - Economic TimesNEW DELHI: You may no longer be able to bank on your provident fund (PF) to bail you out every time you need cash.
With a large number of people withdrawing their PF money when they switch jobs, the Employees Provident Fund Organisation (EPFO) is working on tightening the norms to ensure that employees have sufficient cash, and a pension option, to take care of their post-retirement needs.
Unlike now, when you can depend on your PF accruals to meet a variety of spending needs, EPFO proposes to block 40% of your contribution and release it only after you turn 58. At present, rules permit partial withdrawals for financing insurance premiums, housing, illness, marriage, higher education, natural calamities, purchase of aids by the handicapped, needs arising out of closure of a factory or retrenchment and, of all things, power cuts! In some cases, employees can withdraw up to 90% of their PF savings.
According to the fresh proposals , 30% of the accumulation or interest earned will be set aside for buying or building a house. But you can tap this source only if you have been an EPFO subscriber for at least five years and have Rs 20,000 in your account.
As for your other contingencies, there is the remaining 30% which can be used once every five years. If the proposals are accepted by EPFO's board, no other withdrawals would be permitted.
Wednesday, November 08, 2006
New job ? Make sure you get a good hike
WEDNESDAY, NOVEMBER 08, 2006 - ECONOMIC TIMES
You have just accepted a new job that has offered you a higher annual salary. You are looking forward to that extra cash but much to your surprise , at the end of the first month your see that your monthly take home salary has actually gone down by a couple of thousands.
The reason behind this quirk of fate is a much higher tax liability than what you had anticipated. No two organisations are the same. It is not just the work culture that differs but also policies regarding salary structuring. It is possible that your new employer does not follow a tax-effective salary structure; whereas your former employer was extremely savvy when it came to structuring compensation packages for its employees.
Typically, it has been seen that younger employees prefer a higher monthly take-home salary (high cash component) even if it means paying a higher amount of tax whereas senior employees prefer to utilise tax-saving opportunities available to them within the tax framework.
Companies are increasingly moving towards simplifying their salary structures. Perks are being cashed out as organisations prefer to adopt cash-based structures and move away from administrative responsibilities that come with managing a compensation structure that is high on benefits. From an employee's perspective, this is both good and bad news depending on the employee profile and individual needs.
As an employee, it is important for you to be aware of which are the perks which can help you reduce your tax liability. Most commonly used components that help to save tax are House Rent Allowance, Medical Reimbursement and Transport Allowance. In addition to this, several perks such as driver salary, fuel reimbursement, company leased car, and rest and recuperation allowance can be used to reduce the tax-liability of an individual. But do bear in mind that you need to be able to understand and use the salary structuring your future employer adopts, and evaluate and negotiate using these points as your framework.
Especially, in a job change situation, it is important for you to compare not only the annual compensation package being offered to you but also your monthly take-home salary to understand what would your monthly cash-flow situation look like once you move to the new compensation structure. In the event that your cash-flow is reducing, you might like to bring this to the notice of your new employer and negotiate a better salary package that would ensure that your monthly net take home is secured.
An additional aspect to be kept in mind is the recently introduced fringe benefit tax (FBT) which comes into play on these perks and is to be paid by the employer. Companies tend to adopt varying stance for handling the liability of FBT. Where some companies are choosing to pay this tax, others are passing the liability completely to the employee and reducing the annual compensation package by the amount of FBT liability. Also, there are other companies which are dividing this liability equally between the employee and the employer.
Preference to structure salary around tax saving opportunities would be a function of an individual's spending habits and need for monthly cash flow. So next time you are doing your salary structuring negotiation, make sure that it is based on comparison on all aspects - change in tax liability, impact of FBT and monthly net take home salary - and not only on annual compensation package being offered at the time of a job change as only a complete picture would help you to understand what you will actually take home.
Want IIM students, pay more placement fees
Mumbai November 08, 2006 - Business Standard
B-School: Thanks to service tax, corporates will now have to spend more money to hire management students from these premier institutes.
IIMs are planning, and in some cases have decided, to hike their placement fees this academic year. While IIM Lucknow has already hiked the fee, IIM Kozhikode has decided to increase the same by 25 per cent. IIM Bangalore, too, would increase its fee by 12.2 per cent if forced to pay the service tax and IIM Calcutta also does not rule out an increase in placement fees or fees for its full-time MBA course. IIM Ahmedabad, however, will not increase the placement fee, at least for this year.
The placement fee hike in these premier management institutes comes in the wake of the Central Board for Excise and Customs (CBEC) levying a 12.2 per cent service tax on the placement fee collected by the IIMs and IITs.
Placement charges vary at IIMs. At IIM-A, for instance, multinational firms are charged between $5,000-$6000 for every student that the MNC picks up. Charges for Indian companies are fixed between Rs 40,000 to Rs 1.5 lakh for interviewing students – depending on the day slotted to the firm to hold the interview. Besides, Rs 25000- Rs 50,000 is charged from the Indian companies based on the offers accepted by the students. The institute spends over Rs 3.5 lakh on every student during the two-year course while it collects only Rs 1.58 lakh as fees and other charges.
On an average, IIM-A's realisation through placement fee is over Rs 2 crore. Other institutes realise between Rs 50-80 lakh from placement fee every year. With the 12.2 per cent tax being levied, these institutes will have to shell out anywhere between Rs 6.10 lakh-Rs 9.76 lakh. IIM-A however, would shell out Rs 24.40 lakh.
IIMs say they collect placement fees from recruiters only to keep the cost of education low for the students. But with the new regime in place, they have no option but to abide by it. The institutes have started informing companies on the proposed hike and are positive that companies will receive it well.
The money generated through placements at these institutes is utilised by the IIMs towards meeting capital expenditure and other campus related expenses. But while the IIMs are all set loosen their purse strings, IITs are still not able to figure out why they have been included in the tax net. The management schools at IITs do not charge any placement fee from the companies and thus the confusion.
IIM Calcutta, meanwhile, is still trying to figure out the modalities of taxation. "At this point we are not quite sure of the applicability, conditions and timing of the new rule. We have not received any formal notification on this from the tax authorities and are still awaiting a final confirmation from the government. But if the rule is imposed, we will increase the placement fee," said a professor from IIM Calcutta.
The IIMs had vehemently opposed payment of service tax on placement fee on the grounds of being non-profit making institutes. IIM Ahmedabad (IIM-A) and IIM Bangalore (IIM-B) were issued showcause notices this March by the service tax department. Both IIMs had contested the notices. While IIM-B won the appeal on the grounds that it is not a commercial concern, notice to IIM-A is still to be adjudicated up on. IIM-B maintains since it has won the appeal it is not supposed to pay any such tax but if the government makes it mandatory, the institute has no other go.
Tuesday, November 07, 2006
Cos may have to focus more on fraud risk management
November 07, 2006 Economic Times
NEW DELHI: Even as business leaders are aware of the need for addressing fraud and fraud-prevention initiatives, implementing a comprehensive and integrated approach to fraud risk management across the enterprise remains a significant challenge, says a new white paper by KPMG International.
According to the white paper, effective fraud risk management provides an organisation with tools to manage fraud and misconduct risk in a manner that meets regulatory requirements, as well as the entity's business needs and marketplace expectations.
"In view of the changes in the regulatory environment by introduction of Clause 49 and other such regulations, the companies need to take a strategic approach to fraud risk management by aligning corporate values with performance," said Deepankar Sanwalka, head (forensic Services), KPMG in India.
He added, "Fraud risk management must become a part of the corporate culture. The board, senior management, internal audit, in fact all employees, have a role to play to ensure that the company is enacting and achieving ethical and responsible business practices."
According to Adam Bates, international chairman, KPMG forensic, "An effective, business-driven fraud and misconduct risk-management approach has three primary objectives — prevention, detection and response. The challenge for companies is to adopt a comprehensive and integrated approach that enables all of the organisation's control criteria in these three areas to work together."
Prevention covers aspects like fraud & misconduct risk assessment, code of conduct, employee & third-party due diligence, communication & training. Detection includes issues like hotlines, audit & monitoring, and proactive forensic data analysis. While response will have to incorporate internal investigation protocols, enforcement & accountability protocols, disclosure protocols and remedial action protocols.
Free professional help for filing returns next year
| New Delhi November 07, 2006 - Business Standard Self-employed individuals, women, senior citizens and Hindu undivided families (HUFs) whose income-tax returns do not have to be audited will be able to use "tax return preparers" for filing their returns free of cost from next year. |
| |
| According to the Tax Return Preparers Scheme, unveiled by Finance Minister P Chidambaram today, 5,000 graduates with degrees in commerce, law, economics, mathematics, statistics or management would be trained to prepare tax returns. The scheme was announced in this year's Budget. |
| |
| These individuals will be selected from 100 centres in 84 cities across the country and certified by the second week of February next year. |
| |
| The finance ministry is launching a publicity campaign for the scheme from tomorrow. Ministry officials said they planned to make the facility available free of cost to the self-employed, small businessmen, salaried employees, senior citizens and women with income of up to Rs 3 lakh per year. "We want to make the scheme more popular, which is why it may be extended to all individuals and HUFs whose returns do not have to be audited," an official said. |
| |
| He added the scheme was expected to reduce the cost of compliance for small taxpayers. Bigger taxpayers would have to pay Rs 250 per return. |
| |
| "The preparers would be paid 3 per cent of the tax collected for the first year's return of a new tax payer, 2 per cent for the second year and 1 per cent for the third year," Chidambaram said. |
| |
| The return preparers will be selected through an examination and trained for nine days with the help of NIIT, which will be paid Rs 5 crore. |
| |
| Chidambaram said a fee of Rs 100 would be charged from each applicant along with a deposit of Rs 1,000, which would be returned after successful completion of training. The amount was being charged to ensure that only serious candidates applied, he said. |
| |
| Each preparer will, on completion of training, be given a certificate and an identity card bearing an identification number, which will be used to monitor their performance. Quality alerts would be sent and certificates cancelled if the performance was not up to the mark, officials said. |
| |
| Officials said the revenue department would prepare a database of preparers, which would be posted on the website of the income-tax department. |
Bribe HR personnel and get through MNC job
27 Oct, 2006 TIMES NEWS NETWORK
HYDERABAD: Sarita (not her real name) is cursing herself these days not because she failed to make the cut for a job at an international bank, but for blindly believing an 'insider' who offered the back-end job for Rs 10,000.
The insider - who happened to be a human resource (HR) person in the company - told her that there was no way that she would not get the job after the payment. But that was three months ago. After the anxious wait, Sarita has lost hope of getting the money back or the job. Sarita is unlucky because many in the city are able to land jobs with companies after paying up either to an HR guy or to job consultancy firms tied up with companies. While it is difficult to even put a guesstimate on the number of back door entries, companies privately admit they are grappling with such problems.
Probably this is the reason why many top MNCs go in for third party investigations on chosen candidates. Many job consultancy firms in the city are raking in the moolah as they charge anywhere between Rs 10,000 to Rs 60,000 for getting a job with an MNC. "In small IT companies for a requirement of 10 employees, we can easily push in six candidates. If we charge a candidate Rs 50,000, we make around Rs 10,000 to Rs 15,000. The rest goes to the HR guys," said a job consultant.
He added that likely questions during interviews are leaked to candidates of the consultancy. According to consultancies, getting a job through the back door is easier in BPOs. It is difficult to push in candidates for hardcore jobs like software engineers and programmers. But this is happening in major MNCs with the connivance of insiders, they said. The word is that company representatives engaged in such transactions regularly change their mobile phone numbers. "I got a Rs 15,000 per month job with an MNC in Jubilee Hills after paying Rs 25,000. In hindsight, it appears to be a profitable gamble.
I approached the company insiders directly. If I had gone through a consultancy, they would have charged Rs 60,000," said an employee. Some employees who have made it on their own steam do not object to the back entry. "Despite people getting in through back door, candidates can still get jobs on merit. The cut off mark to get employed in top companies is 60 per cent," said V S N Mastan Rao, a software engineer. "The macro-economic reasons for back door jobs is the gap between dearth of resourceful candidates that companies want and the abundant manpower available in the job market," said Tarun Singh, director with Kenexa, a global employee process outsourcing company.
Monday, November 06, 2006
A Guide to the Latest Batch of Corporate Buzzwords
Date - Nov 6, 2006 - Yahoo WebsiteThe Wall Street Journal Online
By Carol Hymowitz
Don't even talk about "rightsizing," "digitization" and the "war for talent." The new business buzzwords are "delayering," "Web 2.0" and "knowledge acquisition." A new crop of buzzwords usually sprouts every three to five years, or about the same length of time many top executives have to prove themselves. Some can be useful in swiftly communicating, and spreading, new business concepts. Others are less useful, even devious. "Too often people use buzzwords to muddy or cover up what they're actually saying," says Warren Bennis, management professor at the University of Southern California in Los Angeles.
It would be wise, then, if executives who want to be believed and understood, carefully select their language.
Delayering, for example, may evoke an image of a cake, but there is nothing sweet about it. In plain English, it means managers are being fired. It's the latest manifestation of rightsizing and downsizing.
Knowledge acquisition is the opposite of delayering, but different from the now passé "war for talent." It has been awhile since executives have had to do battle to find job candidates. These days, companies need to know how to sift through an onslaught of applications to hire the person with the kinds of knowledge that will best help the company stay competitive. Hence the notion of knowledge acquisition and its corollary, "skills development," which refers to efforts to use the employees already available, but to teach them new skills.
Another current buzzword, "unsiloing," mangles the noun silo to make an important but simple point: Managers must cooperate across departments and functions, share resources and cross-sell products to boost the bottom line.
This buzzword is likely to appeal most to new chief executive officers, says David D'Alessandro, former CEO of John Hancock Financial Services, now a unit of Manulife Financial. "Suddenly they're in charge and they want everyone to play together nicely in the sandbox," he says. That's never the case when executives are on their way up and fighting colleagues to get promotions. The need for wide cooperation is "an old problem with a new imperative in today's competitive global economy," Mr. D'Alessandro adds, "especially for older companies with entrenched organizations."
Sunday, November 05, 2006
How do you turn down a job offer ?
Sunday, July 23, 2006 - DNA Money
After a long search, you've finally got a job offer. You then start agonising whether it's the right one, just like you did while writing your resume or preparing for your interview. This is the time to carefully explore job content, salary, co-workers, location and your future boss.
Even if you have received a job offer, nothing is final until there is a written confirmation. That's when you decide whether you can accept or reject it.
What happens if you want to reject the offer? How do you go about doing it, and what are the things you shouldn't do?
Don't dilly dally, but inform the employer either verbally or through a formal letter. It is professional etiquette to confirm your decision in writing. According to Sudhakar Balakrishnan, director and chief operating officer, Adecco India, a human resource solutions company, there is more demand than supply for people with nil to five years experience.
"In this rung, most of the employees compare notes with friends, peers and colleagues and if they do not like an offer, they do not even inform the prospective employer, but just disappear."
When it comes to actually rejecting an offer, few people know how to do it gracefully. Says Girish Sharad Bhide, national director of training and recruitment with EVP, a New Zealand-based placement company with operations in India, "It is always better to be upfront and tell the prospective employer why you are rejecting the offer, since a good relation with the human resources head may be of help for future use."
It is good to be positive about the company you have rejected and not burn your bridges behind you.
Many smart workers know it is a small world and they can bump into the same human resource head elsewhere, whose offer they have rejected.
Says Sasi Kanth, director of product engineering, Razorsight, a business intelligence and telecom auditing solutions outfit, "The HR community is very small and maintaining transparency is appreciated." Kanth turned down an offer from a multinational information technology company by communicating over the phone. "It is always better to tell them the truth and the reason why you are not joining," he adds.
Agrees Anuj Sharma, a public sector bank employee, who received an offer from a private-sector bank. Sharma wrote a letter to the HR head of the bank, rejecting the offer and citing job insecurity as a major hurdle. "I did not want the company to spend any more time on me," he says.
Some candidates suggest references and recommendations. "References usually do not come in voluntarily, but good HR people do ask for recommendations," says Balakrishnan. But it is important to keep in mind that once you accept a job offer, even verbally, try not to renege or go to another employer. Your reputation could be at stake. As we all know, it's a small world.
AV Birla begins retail headhunt
Friday, August 25, 2006 - DNA Money
The newest kid on the retail block, the Rs 40,000 crore Aditya Vikram Birla group is finally flexing its retail muscle.
"Everything is still low-key," says a Birla manager. But the hirings have begun.
Heading human resource at Birla retail is Vijay Kashyap. He was earlier the human resources head of Shoppers' Stop. Another Shoppers' veteran who is understood to have crossed floors is Sanjay Badhe. He was in charge of property in his earlier job.
At a time when anybody with retail aspirations is thinking Reliance, a prize catch is Pankaj Katiyal of Reliance Retail.
He was looking after the petrochemical major's gasoline stations.
In fact, Shoppers' Stop and Pantaloon are said to have become the favourite poaching ground for new entrants like Birla.
Over the past 10 months, Reliance, which had spread its recruitment dragnet, picked up almost anybody who spelt retail. "Their pay back time has just begun," says a leading competitor.
Industry sources claim that the Birla group which plans to have a retail outlay of around Rs 4,600 crore, is talking to one of Britain's top retailer - Tesco group.
Tesco already has a sourcing operation based in Bangalore.
Another contender is said to be the French retail major Carrefour which is also sourcing many products from India.
The Birla group has honed its retail skills with its apparel arm - Madura Garments which has turned around.
Apart from being the licencees for a clutch of global brands like Espirit and Tommy Hilfiger, Madura's veteran brands include Peter England, once the largest selling shirt brand in India, Louis Philipe, Van Heusen and Allen Solly.
Madura Garments which nestle under the Aditya Nuvo umbrella is understood to be at the forefront of the group's mass market retail foray. Hypermarkets and large departmental stores are said to be the formats that the group is toying with. "While it is easy to break even within a year with hypermarkets, the department store format will be a Madura Garment annexe."
Who is a good leader ?
22 Oct, 2006
TIMES NEWS NETWORK
Who leads an institution? Is it someone with an outstanding teaching and academic record or someone with good managerial skills? Or is it just the right combination of both? Education Times takes the opinion of the academic fraternity
K K Aggarwal, VC, GGSIPU An institution's head needs to have combined skills of a good researcher, teacher and manager. He should be a role model in himself, he should be someone whom you wish to emulate. If you can inspire your students and teachers, your work is half done.
Gauri Kumar, director general, NIFT It's quite a pertinent question. The making and damage of an institution entirely depends upon an institution's head. The head should be an interdisciplinary person with a 360 degree vision.
He should be passionate about his institution and loyal to the institution's agenda. Aditi Dimri, mathematics honours, final year, St Stephens If you take a student's perspective, he would always like a teacher to become an institution's head.
Though the trend has changed and we find a person from the industry or defense background as an institution's head because they have good managerial skills, yet I will opt for a teacher.
I feel only a teacher can understand a student best. The new trend is to maximise the profit of privately administered schools and colleges instead of taking care of students. A principal must have an outstanding teaching record.
Subscribe to Posts [Atom]
