Merger’s last step: TechM integrates HR policies

K. V. Kurmanath
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C.P. Gurnani, Managing Director and Chief Executive Officer
C.P. Gurnani, Managing Director and Chief Executive Officer

The Mahindras have begun the crucial phase of integration of human resources (HR) policies of Tech Mahindra and Mahindra Satyam.

The merger was consummated two months ago after the Andhra Pradesh High Court cleared the way, creating the fifth largest IT services company with total revenues of $2.7 billion. The merged entity has a combined workforce of 84,000, including 36,000 in the erstwhile Mahindra Satyam and 40,000 in Tech Mahindra.

Attrition rate

While Mahindra Satyam had reported an attrition rate of 14.3 per cent, Tech Mahindra reported an attrition rate of 19 per cent.

Though the two companies had been operating as one with a joint go-to-market strategy before the formal merger, there used to be two HR policies.

“Because of the sensitivities involved in running two separate organisations, we have always kept it as a parallel policy. But it was time for us to now integrate the whole HR organisation and those policy integrations are happening as we talk right now,” C.P. Gurnani, Managing Director and Chief Executive Officer, Tech Mahindra, told analysts after the company announced its first quarter results.

“They are all policy related. Whether it is working hours, leave encashment policies, offshore rotation or onsite rotation — all of that is critical to our business. But there were two sets of policies and they are being harmonised,” he said.

Some of them have already been harmonised and some will get harmonised in the next few weeks.

The company has delayed the wage hikes by two quarters. The staff had been hoping a hike for a few months now.

A good number of them expected it come into force with July salary. But the company has announced that hikes will come in January, 2014.

An analyst wondered whether the delay in hikes would result in increase in attrition. Gurnani replied in the negative.

Seeking co-operation

“I do not expect any attrition to be beyond normal. We are explaining to the employees that the company’s compensation and benefits is still higher compared to the target that we have kept for ourselves,” he said.

He said it was a one-time chance to correct and called for cooperation of the staff. “I would not say that I would meet the complete target that I have set for our management team but we will get closer to it,” Gurnani said.

(This article was published on August 19, 2013)
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