Academic journal article Indian Journal of Industrial Relations

Changes in the Indian Economy: Impact on HR Practices & Industrial Relations

Academic journal article Indian Journal of Industrial Relations

Changes in the Indian Economy: Impact on HR Practices & Industrial Relations

Article excerpt

The author brings forth here the changes that were evident in the macroeconomic conditions of the country in the preceding decade and how they affected organizational actors. It was found that such changes had a profound impact on the human resource management practices of the firms as well as on the industrial relations climate of the country. Work arrangements have evolved drastically in the past ten years and have challenged the existing norms within the firm and also brought the industrial relations climate under strain. The article traces how different human resource practices have changed to adapt to the dynamic exogenous environment.


To understand the changes that take place in organizational policies and practices, it is imperative to focus on the exogenous environment in which the organizations operate. Effective human resource practices are critical to a firm's survival and hence akin to any other firm-level practice is sensitive to the economic environment in which the firm operate (Budhwar, 2003; Sodhi, 1994). An economic analysis allows for a study of organizations, industrial sectors and markets. Organizations indulge in scanning the economic environment to make decisions regarding capacity levels, product differentiation, setting of processes and investment in R&D. Apart from the above it also assists in understanding how firms organise their activities and what changes they bring to their organizational process to remain adaptable as per the contingent exogenous conditions.

With multiple changes happening across sectors such as a radical shift in the utilization of technology to variations in how revenue is earned there has been a marked change in work relationships across organizations (Kalleberg, 2009; Okhuysen et al., 2013). These changes range from exhibiting boundary-less career by employees (Howes & Goodman-Delahunty, 2014) to a prevalence of more flexibility oriented contracts Vis a Vis commitment oriented contracts. Rapid advancement in technology with respect to social networks has enabled stronger peer to peer connectivity and new techniques of work interaction (Adler, Kwon & Heckscher, 2008; Gittell & Douglass, 2012). Such changes have also spawned new methods of employee engagement and also provide new platforms for recruitment and selection. The last ten years have seen one major recessionary economic event and this has impacted all sectors. Organizations faced with an unpredictable demand scenario owing to recessionary tendencies of the market have shown a greater propensity towards hiring contingent labor (Verma & Gomes, 2014). Hiring contractual employees has been seen as a trend in both blue and white collared jobs. Indian labor market has also seen an increase in migrant labor. Changing HR climate in diverse sectors is also bringing to fore issues related to diversity, discrimination and ethical treatment of employees (Buddhapriya, 2013; Bukhari & Sharma, 2014; Sia & Bhardwaj, 2008).

Indian Economic Scenario

The last ten years have, for a majority of the time, seen rule from a single coalition government. India's economic performance in the years 2005 to 2008 was superlative indicated by the high growth rate in GDP ranging from 6.57% to 9.32% (Rangarajan et al., 2008). Sectors such as services and infrastructure thrived due to high uptake in demand. Excess liquidity coupled with easy financing brought a surge in the real estate, automobiles and consumables market. In the services sector, India witnessed one of the fastest growth globally. The annual contribution to GDP by the services sector in 2013-14 was 57% (Bhargava, 2015). Agriculture continues to be a major employer, but its share in GDP has consistently been declining and contributes to around 17% of the annual GDP of the country. The country enjoyed a very high average growth rate to the tune of about 9%, but this period of growth was punctuated by a contraction in demand owing to the global recession that was witnessed in 2008. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.