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ITC: Enduring Value

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ITC - Welcomgroup among 5 best employers 18 Apr 2009

Outlook Business

An Outlook Business – Hewitt Associates Study of 25 companies that keep employees smiling even in these bad times

THE DOWNTURN, THE MUMBAI TERROR ATTACKS, AND MOST recently, the shifting of the IPL to foreign shores, have affected the hospitality sector adversely, but the Rs 2,300 crore ITC Welcomgroup hotel chain has no plans to slow down. The company isn’t lowering growth projections or reducing its workforce. In fact, ITC’s cash-rich, debt-free hospitality division plans to double the number of rooms in its luxury hotels to 5,000 in the next three years, to be in a good position to ride the upturn when it happens.

At a recent conference in Gurgaon, senior officials from across the country discussed how to weather the current difficulties without any major internal upheaval. The message that went out to employees at the end of the three-day conclave was: “no layoff s or pay cuts’’. Given how most other companies are taking drastic cost-cutting measures just to stay afloat, that message would have been very reassuring for employee morale.

Employees have always been treated well, even after they retire. Although it is the ideal hunting ground for other services players such as airlines, business process outsourcing (BPOs) and banks, especially at the junior management level, ITC Welcomgroup has managed to keep attrition down to 11%, well below the industry average. “That has been made possible,’’ says Anil Sharma, Vice-President and Head of HR at ITC Welcomgroup, “by benchmarking our salaries to those paid in these industries, ensuring that the cash component is the highest in the salary, and also paying a handsome retention bonus at the end of three years.’’

For middle-level managers, the benchmark is the hospitality sector: hospitals, competing hotels and real estate companies, because these companies were luring away its managers. ITC Welcomgroup also added the best in lifestyle benefits—houses in good locations and expensive cars—to take care of employees’ family needs. For those at the very top, it is Hindustan Unilever, Infosys and the Tata Consultancy Services (TCS) that became the competition.

A high basic pay is just one part of the package; other intangible benefits such as job satisfaction, ability to move within the organisation and the freedom to express opinions also help in employee retention. Moreover, the company’s distributive leadership model, as opposed to centralised leadership followed by most companies gives strategic business unit (SBU) heads full autonomy and authority to run their respective businesses as they see fit. Also, its emphasis on collective action has built team spirit among employees.

Nakul Anand, CEO, ITC Welcomgroup, feels that morale is high because the company takes care of most employee needs. And he should know, having spent 33 years in the company. Every employee gets ample opportunities to rise up the ladder. Says Sharma: “The only limits to growth in our company is our own competence.” He cites the example of Sunil Sikka, who rose from bellboy to general manager over a 30-year period, after getting 17 promotions.

Anil Sharma recruited Jeevan Unnithan, who was a captain in the army, as an assistant manager nearly six years ago. Today, Unnithan has risen to the post of Divisional Human Resource Manager. “Even in these troubled economic times, I know I can sleep soundly because I am working with ITC Welcomgroup,’’ says Unnithan.

© ITC Limited