Salary Structuring: A Primer

Well, let’s admit it. At some point in our HR Career, we have all wondered: should we include DA mandatorily in the structure, should we keep the Basic Pay at 30%-40%, or Should CTC include Gratuity? Certainly, I did, especially as I come from an Engineering background with no formal education in HR. The beauty of lack of HR knowledge was that I had to find each of these stuff from scratch for which the web and my fellow HR colleagues from and around Kochi helped. Special thanks to the connections I received through NIPM (one of my imminent blogs is on why HRs should network; catch you there soon!).

In this article, I intend to give a primer—a very basic understanding—of how we can structure the salary in India. I would speak of the structure as of 2021, to the best of my understanding, belief and practice.

Wait, tell me about the parlance!

Before we begin, let’s make sure that we get the terms right. During my tenure as an engineer, I never cared about the terms such as Gross Pay and what mattered was the CTC and Cash in Hand. But as an HR professional, there’s more to it and I believe all folks across all departments should get an idea about the payroll parlance. Here’s the gist:

A high-level overview of components of CTC
  1. Cost-to-Company (CTC): This is an accounting term with no legal definition whatsoever. You cannot find this term in any of our labour acts. You use it for your convenience, or for accounting purposes. No one else cares (except probably the job applicants).
  2. Employee/Employer Contributions: There are some mandatory contributions that employee and employer have to make periodically. While employee contributes Employee EPF, Employee ESI, TDS, Professional Tax, Employee Labour Welfare Fund contributions, etc., the employer also needs to make contributions such as Employer EPF, Employer ESI, Employer Labour Welfare Fund contributions. Employee contributions are deducted from the Gross Pay, while Employer contributions are outside the Gross Pay. More on those terms below. Please note that EPF and ESI are mandatory only if your organisation falls into the respective requirements.
  3. Gross Pay: Before I define Gross Pay, we must understand that the CTC is the sum of all payroll expenses an employer incurs on an employee. Basically, CTC includes the salary and other expenses the employer incurs (more on that later). Now, let’s split the CTC as (What Employee Deserves + Extra Expense for the Employer). Here, the “what employee deserves” component is the Gross Pay. Look at the Venn chart above.
  4. Net Pay: An employee has to pay statutory (or even non-statutory) contributions such as EPF, ESI, TDS, etc. These contributions of the employee are deducted from the Gross Pay. In effect, the Net Pay = Gross Pay — Employee Contributions.

Well, we got it covered; pretty much!

It’s important to have the right mixture of components for a tasty meal.

What all are in the CTC?

Elementary, my dear Watson! CTC = Gross Pay + Employer Contributions.

Oh wait, I got your question. You’re basically asking, what all can be there in the ‘Employer Contribution’, correct? Well, the answer is ANYTHING. You can include the mandatory employer contributions as detailed above, plus some other stuff. Some companies include valuation of ESOP in the CTC, some include the amount that the company pays for insurances for the employee/family, etc. As a standard measure, let’s keep the statutory contributions such as ER EPF, ER ESI, ER LWF and the like in the CTC. The best practice, in my opinion, would be NOT to include benefits and other rewards in the CTC with the purpose of inflating it to look attractive. Variables are welcome to be included in the CTC, but we need to mention that they are variables.

How do I structure the Employee Salary?

We’ve finally come to the million dollar question. How do we compartmentalise the salary? I am trying to explain this in the form of a FAQ compilation below:

What are basically the components of Gross Pay?

Broadly, let’s say, Gross Pay contains the Basic Pay, DA, HRA, and other allowances.

Why have you mentioned HRA separately, even when it is an allowance?

HRA has some exemptions with respect to definitions of wages (e.g: EPF calculation where HRA is exempted from consideration).

Okay, understood. Now, tell me whether that DA is mandatory?

As long as you are paying above the minimum wages (read my other article on Minimum Wages to understand how DA is calculated), you can subsume DA in the Gross Pay, without having to show it separately. There are certain occasions (e.g: in the case of those who are using the Wage Protection System in Kerala) some organisations are forced to show DA separately, which I would have no objections against.

How about Basic Pay? Is it 30% or 40%?

Basic Pay used to be defined as any percentage of the Gross Pay by organisations at their will. But as per the proposed Code on Wages, 2019, to be effective from Apr 1, 2021, the (Basic Pay+DA) component should be at least 50% of the Gross Pay (legal nerds, please do not raise your eyebrows; I have used the term ‘should’ as in suggestive parlance and in a practical sense). Assuming that you are not showing DA component in the salary structure, let’s then fix Basic Pay as 50% of the Gross Pay.

Remember, if you are following 30% or 40% of Gross Pay as Basic Pay, you are recommended to revise the same to 50% wef Apr 1, 2021. This will, also, have impact on your financials such as Earned Leave Encashment, Gratuity, etc.

Earmarking the right amounts of the CTC under various heads is not only mandatory but the right thing to do.

Aha, I see. So Basic is Fixed. How about HRA?

HRA is NOT a mandatory allowance. But it is a general practice to provide HRA for the employees to meet their accommodation expenses. Further, HRA is exempt from income tax, while Basic Pay, DA and allowances such as Special Allowance are fully taxable. HRA has an income tax exemption rule, which is three-tiered, details of which I am omitting for now. For metro cities, a maximum of 50% of Basic Pay can be non-taxable, while in non-metro cities, it is 40%. I would then suggest that we go with HRA = 40% of Basic Pay if you are in Kerala.

We’re getting close. Now tell me about ‘Other Allowances’?

Code on Wages mentions about Retaining Allowance, which is an allowance provided to the employee for the retention purposes (this should be part of the offer letter if you are providing it, and you should call it ‘Retaining Allowance’ itself). Generally, new-age companies, usually do not include this in their structure and provide the rest of the salary as “Special Allowance”.

So, in short and in a crude form:

Gross Pay = Basic Pay + HRA + Special (Other) Allowance.

Can you explain it as a salary structure?

Well, that’s my job to explain. Here it goes:

ComponentAmount
A. Basic Pay50% of Gross Pay
B. HRA40% of Basic Pay
C. Special AllowanceRemaining amount to reach the Gross Pay
D. Gross PaySum of (A), (B) and (C)
E. Employee DeductionsTDS, EE EPF, EE ESI, PT, EE LWF, etc.
F. Net Pay(D) — (E)
G. Employer ContributionsER EPF, ER ESI, EDLI, ER LWF, etc.
H. CTCSum of (D) and (G)
Table 1: Sample Salary Structure
Sample-Salary-Structure

Wait, where is the Conveyance Allowance?

Conveyance allowance is a thing of the past. HRs usually included it in the salary structure since that component, up to an extent, along with Medical Reimbursement used to provide some tax benefits to the employee. Not any longer. It stopped two years ago when the concept of standard deduction was introduced in the union budget and there is no point of mentioning Conveyance Allowance in the pay structure unless you want to have one more column for your Finance team to manage.

(But wait, the Conveyance Allowance may sound well for salary structures when Code on Wages comes into force on Apr 1, 2021. That’s a different subject to talk about; but for starters, look at the exemptions from the definition of ‘wages’)

No, it can’t be this simple. I do not see any other allowance—such as LTA, Books and Periodicals, etc. Where are they?

Now we are on the right track! Well, these allowances are non-mandatory allowances, but at times provide great relief for the employees from a portion of their income tax. Such allowances are in fact reimbursements against actual bills, though some of them are paid in advance under the expectation that the employee would submit the bills to the employer by the end of the financial year.

Now to answer the question, yes there can be some such allowances as part of the salary structure. But they are simply the babies of the ‘Special Allowance’. Special Allowance (even this one is not a mandatory allowance; we use it as a filler bucket to make sure that the components add up to Gross Pay) is fully taxable. One can split the Special Allowance into smaller allowances/reimbursements so that a part of it becomes supposedly non-taxable. That’s a story for another discussion, which you can see in my next blog—Flexi Benefits as part of Salary Structure.

Okay, but you didn’t tell us about the statutory calculations yet.

Fine. Here’s the snapshot. Tables speak better.

ComponentPer Month ContributionObservation
EE EPF12% of (Basic Pay+DA+Other allowances excluding HRA)Go with 12% (Basic + DA + Special Allowance)*Some orgs have been exempted and some have 10% contributing rate
ER EPF12% of (Basic Pay+DA+Other allowances excluding HRA)Go with 12% (Basic + DA + Special Allowance)*
EE ESI0.75% of ESI WagesESI wages include all components including Basic Pay, HRA, Special allowance, OT, etc., but excludes components like Annual bonus, Retrenchment compensation, and Encashment of leave and gratuity
ER ESI3.25% of ESI WagesSame as above – 
PTDepends on your state and salary range. This will help you
EE LWFRs. 20/- for S&CE LWF in Kerala. Differs based on the nature of establishment
ER LWFRs. 20/- for S&CE LWF in Kerala. Differs based on the nature of establishment
TDSOn the Employee’s Earnings. Depends on the existing Income Tax rates
EDLI and admin chargesDetails hereOne may or may not include this as part of Employer Contributions
Table 2: Statutory Deductions on Salary

* Assumption: No other ordinarily paid allowances (other than those like OT, Performance-based incentive, etc).

Legal deductions are the savings for the retirement of your employees. Help them plan right!

So far so good. But I have read that there is a cap for EPF contributions. What is that and how is it incorporated in the salary structure?

Yes, EPF up to 12% of Rs. 15,000/-, i.e. up to Rs. 1800/- per month by Employee and Employer each is mandatory. If the (Basic + DA + Other allowances except OT, Bonus, HRA, etc.) is less than 15,000/- per month, then the EPF contribution will be less than Rs. 1800/-, which is fine. Suppose the above amount is Rs. 25,000/-. Then the 12% of 25,000 = Rs. 3000/-. The employee is not liable to pay this entire amount to EPF and can decide to cap it as Rs. 1800/-. This would mean that the employee’s EPF deduction will be Rs. 1800/- instead of Rs. 3000/-, meaning the net salary might increase since the deduction is lesser.

Another catch here is, the employer is liable to pay the equal contribution as the employee makes. So if the employee decides to cap it at Rs. 1800/-, the employer can also do the same, which may be a loss to the employee in the long term as a hole on the savings. But modern-day organisations tend to transfer the benefit of this capping to the employee, by fixing the CTC and increasing the Gross Pay to match the difference, still, all of them totalling to CTC. This would mean that the employee might get a higher net salary even if s/he caps the EPF contribution, but the transfer of benefit depends on the employer and is at their will.

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The post is getting longer by the minute. Would you like to conclude?

So, in short, our intention is to add up the component to Gross Pay and then add employer contributions to reach the CTC. When an offer is made (or a salary revision is recommended), companies usually look at the total cost that it would incur. The rest is on HR to design the structure in the most favorable manner.

More fun on the way

The calculation to sum up earnings, employer contributions, etc. to reach the CTC is pretty straightforward with simple arithmetic calculations. But it can become slightly complex when you are given a CTC and asked to bifurcate it to various components especially when there is a cyclic dependency is involved (e.g: ESI contribution depends on the components of the salary structure, while those components depend on the ESI contribution).

This is not rocket science and can be solved with a system of first-degree multi-variable equations. As long as we have HRMS in place, this won’t be a headache, but don’t you think it would be fun to go back to high school math and see how that helps in the above HR situations? Post your responses in the comment below and let’s see who gets it right first! Let me blog on the math later.

Salary Structuring may be an operational aspect of Human Resources, but it definitely is an important piece of the job.

This article is also published on LinkedIn and Medium.

Software Engineer and Getting Paid below 17,742/- per month? Well, something’s wrong! Let’s look at the Minimum Wages!

I am sure your you were curious as to why the number 17,742/- for a Software Engineer when you clicked on the link to land this article. Let’s see in detail. By the way, if you are a software engineer in Kerala getting paid below this figure, it’s probably the time to send this article to your HR Manager 😉

Context

Recently, on Dec 24, 2020 to be exact, Government of Kerala announced the revised Minimum Wages for the Software industry in the state, after long 10 years of the earlier revision. Numbers have soared up. This article discusses the concept of minimum wages, with examples pertaining to Kerala state; however, the concept should be the same throughout the country.

What’s this “minimum wages”?

As the name implies, the minimum wages is the minimum wage per month to be given to an employee of a particular sector in a state. There is a national minimum wage declared by the central government, and various state-level minimum wages. The idea is to keep the state-level minimum wages equal to or above the national minimum wages. The concept of minimum wages will ensure access to equitable and justifiable pay, thereby eliminating the chances of exploitation by the management.

When is it decided?

Minimum wages are revised periodically. Minimum wages are defined for each sector separately. For example, the minimum wages for Software sector differs from that for the Oil Mills sector. There are roughly 80 such sectors identified for the State of Kerala; and similar numbers for other states as well. Governments revises the minimum wages when it deems that there is, inter alia, a significant increase in the cost of living over a period of time which is not manageable by a mere increase in Dearness Allowance (DA).

How is minimum wages calculated?

Minimum wage calculation for a role is easy. For example, look at the latest Software industry minimum wages notification for the State of Kerala below (extracted from here).

Kerala-Minimum-Wages-Notification-2020-Computer-Software-Industry

If you look at the notification, in the Software sector, roles of jobs are categorised into different grades. For instance, an HR Executive is a Group F employee in the industry, while a Software Engineer is a Group E employee. An organisation needs to categorise all their employees into one of these grades (and, if not already done by any means whatsoever before, it would be advisable to communicate the same through an HR letter/notice, through internal HR portals, payslips, etc. to the employee so that they are aware of the same) Let’s take the example of Group E: Software Engineer for illustration purpose.

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Demystifying the Minimum Wages Calculation: An Example

If you look at the Group E: Software Engineer, 16520-250-17770-300-19270 is the salary range shown for this role. What does that mean, let’s have a look!

The minimum wage for an employee who is a Software Engineer in an organisation is Rs. 16520. This amount is exclusive of another factor called Dearness Allowance (DA), which we will see about later.

Now, look at the number 250 in the wage structure. What does it signify? The notification says:

For every five years of completed or to be completed service in an establishment or under an employer, an annual increment at the rate next to the pay scale fixed in the new scale of pay shall be paid as service weightage to the employee concerned.

So, if an employee continues to be a Software Engineer under the same organisation/employer, then for every such service year, a minimum pay hike of Rs. 250/-pm should be paid as service weightage. That is, for someone with salary 16520/- as per month salary, and completed one year of service, s/he should get a minimum wage of Rs. 16520 + Rs. 250 = Rs. 16770/- pm during the second year of service. Every year, this figure per month will increase by Rs. 250/- for the first five years. Hence, s/he will have a wage of Rs. 17770/- pm during the fifth year of service. That’s the third number appearing in the pay structure.

Now, one can see a 300 next to 17770 in the pay structure. That means, we’re now done with the first five years and reached Rs. 17770/- pm as minimum wage for this employee. Hence for the next set of 5 years, the minimum wages should be increased for every service year by, not the old 250 but, Rs. 300/-. Hence, on the sixth year of service, the employee should have a minimum wage of Rs. 17770 + Rs. 300 = Rs. 18070/-. This will continue for the second block of 5 years. Hence, at the end of the 10th year (i.e. the fifth year of the second block), the employee should be getting a minimum of Rs. 19270/- pm as the salary. After the 10th year, the mandatory pay hike stops. If the employee gets promoted to a higher Grade, that’s a different story, in which case the minimum wages for that role will be applicable.

Image Courtesy: Investopedia

What if one gets more salary hike?

Good for them. The minimum wages talks about the minimum wages to be given, and the minimum pay hike to be given for every service years. If your pay is already above this level, then the employer is NOT obliged to give you the 250 or 300 pay hike.

Now, tell me about DA calculation?

Dearness Allowance is calculated based on an index called Consumer Price Index (CPI). I will skip the economy part and would encapsulate that it is a statistical number published by Dept of Economics and Statistics for various cities in the state, and it depicts the fluctuating cost of living. They publish it here.

DA is a mechanism provided to adjust the salaries for change in CPIs. If you look at the Minimum Wages notification, it says:

In addition to the basic rate of wages, all the employees shall be eligible for Dearness Allowance calculated on the basis of the Consumer Price Index published for the concerned District Head Quarters of the Department of Economics and Statistics at the rate of ₹ 26 (Rupees Twenty Six only) for monthly waged employees and ₹1 (Rupee One only) for daily waged employees respectively, for every point in excess of 300 points of the latest Consumer Price Index Number in the series 1998-99=100.

There are five parts to it:

  1. DA varies for each city (read district HQ)
  2. The rate of DA is Rs. 26/- for monthly waged employees
  3. DA is calculated for every point in excess of 300 points
  4. CPI is published periodically
  5. DA for this sector is calculated basis the CPI in the Series: 1998-99=100.

With these reading in mind, let’s calculate the DA for an employee posted in Trivandrum. Look at the CPI page on the EcoStat website and choose the latest month for which CPI is available. As I write this, it is Nov 2020. If you look at the Trivandrum’s CPI value under the column Estimated Indices for Base : 2011-12 = 100 Base : 1998-99 = 100 for Nov 2020, it is 369. That’s our little guy.

Now, we need to find out the DA from this 369. As per the #3 above, DA is calculated on the CPI-300 value. Here, it is 369-300 = 69.

We need to pay Rs. 26/- per month for every point in this 69. That means, the DA per month for an employee posted in Trivandrum is Rs. 26 * 69 = Rs. 1794/-

DA is paid over and top of the above minimum wage. DA may change when CPI changes.

Tip: An organisation need NOT provide DA as a pay structure component. They can subsume DA component in the gross pay and make sure that the gross pay is above the (minimum wages + DA) figure. But it would sound problematic for organisations who use the Wage Protection System, which mandates the DA component as such, in which case one may decide to keep that little guy in the pay structure.

Are we talking about Gross Salary or Basic+DA?

With the introduction of Code on Wages, 2019 (to be in force from Apr 1, 2021), all confusions with respect to the definition of wage will vanish. You may consider the Basic + DA + Other ordinarily paid allowances (other than OT, commissions, performance-based incentive, etc.) as the wage for this purpose, meaning we’re talking about the Gross Pay. Confused about Gross Pay, CTC, etc.? I’ll write about it in my next article 😉

Compliance is a Culture.

When is this to be effective from?

This notification is to be effective from Dec 18, 2020. Even if December 2020 and/or January 2021 salaries are already paid out by the employer, they are to abide by these changes. If there are revisions to be made as per this notification, then employers have to comply and give arrears wef Dec 18, 2020.

For the existing employees, if the salaries are to be revised to comply with this notification, then the employer must take care of the service weightage as well.

Where can I see minimum wages for other sectors?

Govt of Kerala published minimum wages notifications on this page. This is the old notification for the Software Industry.

An exercise

Well, now find out the minimum wages to be paid to a Senior Software Engineer with 3.2 years of experience in the current organisation in that grade, and posted at Calicut. Post your answers in the comment box and let’s see how many of you get it right 😉

This article is also published on LinkedIn and Medium.

Why did I write SHRM-CP and how did it go?

Anish asked me to write about why and how I prepared for the SHRM-CP examination so a few HRs who might not know about this certification yet could benefit. I spent some time reflecting on whether I should actually write it or not, and finally, here I’m. If it helps someone, I am happy. If not, that’s still okay 😉

Background

I am an engineer by education and early-career profession. I did my masters in Computer Science and joined Oracle in Bangalore where I spent more than 3 years doing things that I was not contented with, and that I do not consider myself good at. FullContact happened as a you-got-what-you-wished-for opportunity, and I happily accepted the offer to join there as an HR. I always loved the HR job, unlike many other engineers out there!

Well, it goes without saying that I am without an MBA. Did it matter? I will be blunt: it did matter to me, though it didn’t to my employer. I was a beginner in the HR profession, but I was invited to lead the India people division of the organisation, owing to the trust and hope the then leaders had in me. I had to make it up to it, and I did not have an MBA. Did it really matter? Does it, now?

(Image courtesy: www.peoplematters.in)

Hey dude, do you really care about the degrees (and not the skills)?

We as humans tend to see and believe things as binaries—YES or NO! Do degrees really matter? Some say that it doesn’t, and some it does. Certain degrees do really matter, but what matters more is the kind of environment you studied in and the exposure you have attained. I have seen the case studies MBA colleges use to teach the graduate students in the tier-2 colleges and the top B-schools in the country and abroad. I was well aware of the differences in engineering education, but the kind of exposure those top-tier B-schools provide to their MBA students is something unparalleled from my observation. One can’t simply say that degrees do not really matter. What matters is exposure and potential—be it with a degree or not.

One may argue that college degrees cannot provide the quantum of exposure that on-the-job training provides. While this generally true in our country, the quick(kick)start the tier-1 educated graduates get is, still, something. There’s no denying that.

Back to our story: well, I did not have a degree. My ego and self-esteem played, and I thought of doing a distance MBA, joined, fully paid for and found it to be worthless an affair, left it at that. But as time progressed, thanks to the openness and unusually solid support that I got from this organisation (and the HR communities that I am associated with such as NIPM Kerala Chapter), I could learn A LOT while being on the job. I wanted to, however, benchmark myself to see where I stood (read this as self-appraisal. Unless you benchmark yourself, you are not giving yourself feedback. If you do not give feedback often, you are buying the same fish, again).

I heard about the SHRM certification and I was not eligible to write SCP then, hence chose CP; out of the blue, after reading some online reviews. I knew that it would take some effort, but my organisation supported me by spending considerably good amount of money on this learning effort by sponsoring the digital training kit for the examination. That’s one reason why I was fast ready to write the exam.

Tell me more about the exam

There is more than enough articles on what and how the SHRM Certification examinations are, hence I will skip that part except for an excerpt:

  • You can write SHRM-CP if you have 2 (or, 1 for those with PG) years of professional HR experience. If you are senior in terms of service, you could try SHRM-SCP.
  • The test is computer-based. Continuous 4 hours (trust me, my eyes pained). 160 questions. I wrote it at Prometric centre in Trivandrum, Kerala, India.
  • Of the 160, there are 95 knowledge-based questions, 65 judgement questions. They are all multiple choices, but alternatives can be confusing and similar-looking. This page gives you a sample set of questions.
  • How I prepared: There are four books that came along with the digital learning kit that was sponsored by the organisation. I read them. They are quite helpful and one may get tons of revelations of as to how many bad concepts/understanding of HR that one has had (I did). In fact, this was the best outcome of preparing for this certification.
  • You will get to know your provisional results immediately after the test. They will send you the official intimation later.
  • The examination costs you $400 ($300 if you are an SHRM member). The certificate is valid for 3 years (and can be renewed by acquiring certain recertification points by doing online courses, attending seminars, etc.). It is not mandatory that you purchase the digital learning system. This page may be helpful.

(Image courtesy: blog.shrm.org)

Should I do it?

  • Yes, if you want to benchmark yourself, and maybe, study something that you already didn’t know. Or, if you are doing it as a self-confidence booster.
  • No, if you are just doing it for a pay hike. Mostly no organisation—I understand some may still be doing—in India provides with a pay hike for HRs just because they have a certification (but that’s not the case abroad, and some job descriptions specify these certifications as minimum requirements, which is a benchmarking/filtering tactic). However, it can be a distinguishing factor. After all these, I know in person a ton of HR professionals doing much better than me, without an MBA and/or an SHRM Certification. So, it’s just all about what you want.

If you’re not so concerned about the certification, why have you written “SHRM-CP” in your LinkedIn profile name?

I am just being ostentatious.

So, you’re saying that you’re after fancy degrees (or candidates with such degrees)?

Wait there, never did I say that I have high respect for candidates just with fancy degrees. Moreover, I believe in interviews that are based on Behavioral Competencies (from a People standpoint)—BEI as it is called—rather than education texts that fill in white spaces on a resume.

TL;DR: Take an SHRM certification exam (or its competitor HRCI) if you want to benchmark yourself against what is considerably-okay in the industry. You may gain some confidence, too.

Wait, did I write a TL;DR at the bottom? 😉

P.S: Julian has written about how he passed the examination already, my job is reduced by 90% in writing this article and hence not explaining what he has already done.

P.P.S: I would strongly recommend being part of the SHRM community by spending money on their membership. It is really worth it (an online membership would suffice) in terms of strategic/operational documentation that is available on their member-only portal and the community of HRs they have built.

If you have more questions, I am happy to help. Please drop me a message or write in comments (beware: you are going to talk to someone who is known to be incommunicado for longer durations; so please expect the delay).

Also published at: https://www.linkedin.com/pulse/why-did-i-write-shrm-cp-how-go-arunanand-t-a-shrm-cp

Work From Home Musings

Here’s the snapshot of my WFH experience (though I’ve done it in the past, not as many continuous days as this time).

Work From Home, Working From Home
Image Courtesy: www.entrepreneur.com
  1. Gained weight. I was on a consultant diet for the last three weeks and had lost 3 kgs. Looks like I eat at leisure while at home and gained 2 kgs over the last one week.
  2. I eat my meals on time, but while at the office I am known to procrastinate meals and eat them all together later. However, I drink less water while at home. And I miss pantry talks.
  3. Missing the office AC. The room where I’ve set up my work from home corner is damn hot. Internet at the office was heavenly, too.
  4. Missing my people around, especially the G&A team of FullContact. Meetings having been moved online, I’ve started missing meeting people in real. Added to it, I am in HR.
  5. I fail to switch to work attire though many on the web suggest doing so.
  6. Productivity swings. At times, I am underproductive while productivity soars up sometimes.
  7. Feeling unnaturally sleepy after lunches (while at the office, it doesn’t happen quite often).
  8. Kid at home & Working at home together is a bad idea.
  9. Last but not the least, I am living two more days in a month. I have a two-hour transit daily, multiply that by 24 and you get 48 hours = 2 days!

Did your employer ever deny the Experience Certificate? Read on.

Indian labour laws are, majorly, employee-centric than employer-centric. Though this is the state of the act, most employees are not aware of their rights per various labour laws of the land. Or else, many employers purposefully do not educate their employees of the latter’s rights at the workplace.

One of the major threats many young professionals face from disgruntled employers is ‘we will not issue the experience certificate unless you do x or y‘. Not issuing an experience certificate is, unfortunately, used by many HRs and management as a tool to get something done by the employee. This something could be repayment of what the employee owes to the company, the employee not serving the notice period, etc.

Another common practice among some SMEs (I must admit that this trend is on a decline now) is to keep the originals of the employee’s certificates and mark lists with them until the term of employment/resignation. This is to make sure that the employee does not look for alternative employment whilst employed at the master organisation. Poor employee, s/he believes that the organisation has rights in their limit to do so and obeys this demand.

As it turns out (and it has always been like that), NO EMPLOYER is entitled to DENY experience certificates (service certificate in legal terms) to an employee or a former employee. If the employee demands such an experience certificate during or after the term of employment, the organisation is BOUND to issue one. To cite the labour law, 2J(3) of Kerala Shops and Commercial Establishments Act, 1961 mandates that the employer shall issue the service certificate in Form BE, within seven days from the receipt of such a request from the employee (every state has its own S&CE Act, and they will have similar provisions).

In a nutshell, employer cannot deny a service certficate (experience certficate) even if the employee is absconding or under a formal domestic enquiry for a gross misconduct. If the employer does not follow the request, the employee has the right to contact the District Labour Officer or the Labour Court thereafter for redressal.

Now, Section 5E of the aforementioned act says:

5E. Prohibition of retaining education certificate or experience certificate.—No educational certificate or experience certificate in original received from an employee shall be retained by the employer of any establishment at the time of appointment or during the course of employment.

This means, no establishment has the right to retain the originals of the experience certificate and/or educational certificates of their employees. Copies, however, can be maintained for record purposes, but originals have to be returned immediately after verification.

Ever denied justice? Talk to your HR first. If they do not fall in line, you now know what to do.

Also published at LinkedIn and medium.

The Agony and Ecstasy of Working as HR Professionals in Organisations Today

‘You should not stop being people’s advocate! The day you end being one is the day the HR dies’.

These words which I happened to randomly listen to while working at Oracle as an Engineer, later became the cornerstone of my HR career. While I believe that any job has its own merits and fashions, there are certain jobs that have the capability to make impacts of higher gravities. HR is one, nevertheless, it goes a thankless job in some organisations.

HR, like any other job, is like a two-sided coin. You will have happy days; and then there will be days that give you a headache. Interestingly, the primitives on which the functions of an HR are based invariably embrace the ‘headaches’. What’s fun if things go as in the books; HRs come into play when things are not in line or if there’s no line at all. Thus, the headaches become opportunities. We cannot really see these as binaries—either yes or no—but grey. Let’s have a closer look:

Leaders with People Mindset

HR team’s vision will only be successful when your company has a management that believes in people. Forget your company’s revenue, business strategy and everything else; it’s the faith of the management in the people business and their mindset of treating people as the largest investment that drives the success of any HR team.

Starting from the CEO, every C-level and VPs should have a clear understanding and buy-in to the policies that the HR team parks on. This is the biggest factor of all which decide if an HR’s life is hell or heaven. This article on HBR says that during 2008 recession, only a  third of HR departments were consulted when layoffs happened, pointing to lesser influence HRs had in strategic business/people decisions—this is fast changing now.

It’s imperative for the modern day HR to work closely with the line managers as well, to make sure that the ‘people mindset’ envisaged at the top level trickled down appropriately at the length and breadth of the organisation. The organisation’s profitability comes only through the growth; and growth comes only through its employees and culture—not the C-officers alone! HR is certainly a partner in strategy execution, and hence they should have business acumen and understanding as well as the people mindset. 33% of execs believe that there’s ineffective HR leadership that drives their organisation to the unsolicited directions as per this HBR report. This can be tricky and painful for some of us, but definitely the need of the hour; it has always been, but clearer in the recent years.


Data and Opportunities for Analytics

With the advance of technology, data has come to play a major role for the HR as well. This has helped establish data-driven strategies. Since most HR operations have gone digital, HR gets instant access to the data and can run an analysis on it to reach faster and effective conclusions. Analytics has resulted in the greater impact of HR activities starting with talent acquisition through engagement to exit.

Changing Workforce

Gen X is fast coming to the top of the ladders, and most ‘workforce’ now comprises of Gen Y and Z. The millennials tend to pose and trigger a change in the way most HR teams function. The factors that excited Gen X may no longer be valid/needed for the Gen Y/Z. This needs a larger discussion in all organisations, where HR takes the lead role.

Starting from how your recruit talent to keeping them engaged should change due to this workforce change. Your ‘food coupons’ or ‘telephone reimbursement’ may not be an attractive benefit as it used to be. Your vacation plans, office timings, attire requirements and health initiatives may need a thorough change keeping in mind the interest of the new workforce. This is one place where HR gets into agonies or ecstasies. This also points to changing your HR practices and policies to accommodate the new-styled workforce who love things to happen faster and easier.

Pay Gaps and Diversity

Gone are those days HR recruited the ‘protagonists’ alone. Ideologies and societal factors keep changing, and Diversity & Inclusion (D&I) has become another opportunity for HR. While this is seen as an ecstasy from a philosophical standpoint, various reports suggest that the pay gaps and men:women employee ratios are still really bad in numbers. The report from WeForum suggests that in 82 out of 142 countries, pay gaps based on gender is still increasing. This is alarming, and agonising for the HRs, for they have been trying to establish a reverse scenario through D&I and localisation initiatives.

KPMG reports that HRs around the world struggle to keep in line with the global workforce, which turns out to be an agony for the HR fraternity, yet. With globalisation, teams become more and more integrated and agile, which HRs must run fast to cope with. Increasing number of remote, and arguably virtual, employees demand that the HRs tighten their belts.

Attraction, Training and Retention

Organisations today want not job-seekers, but talents. For example, in IT, with the massive ‘attack’ of automation over the services sector has diminished the glitter of the old glossy, silky texture of the industry to a great extent. Companies today want to find talents (“attraction”) rather than applicants finding them for jobs (“acquisition”). The onus is on the HR team.

The new organisation have a diverse workforce that constantly looks for enhancing their skill set. The old school training curriculum is undergoing a thorough revamp, which is, yet again, equally agonizing and ecstatic for HRs. Starting from the training modes—virtual to gamification to anytime anywhere learning platforms—to the training content, organisations are thoroughly revamping their L&D strategies with the Gen Z in mind.

Another area of concern for the HR is retention. It’s way beyond creating a good brand; stories float about youngsters rejecting offers from big brands to choose what they want to do in small companies. Retention plans of the new age is another agony for HRs, planning of which needs a thorough analysis of their workforce as well as the industry trends. People don’t just stay back for money.

HR Tech: the future

As it goes without saying, HR Tech is already here. Yesteryears’ Personnel Manager changed to HR, and then got transformed into People Enablers over a period of time. The new role of HRs will be that of technology and business leaders enabling people functions with the help of cutting edge tech. Coming of tech into HR will certainly reduce the job opportunities of the existing HR workforce, but wait! It’s a two-sided coin again. While this is seen as an ‘oh-my-god-am-I-gonna-lose-it’ scenario, why don’t we look at the brighter side of it? It gives us room for learning technology and pouring it into what we have been doing, thereby making a yet greater, happier, better workplace! Ain’t it ecstatic?!

Disclaimer: Any of the discussions above does not reflect the views of my present or previous employers. Views are all personal.