HR managers will focus on leadership development, compensation management and healthcare benefits in the New Year.

If 2007 was the year of Indian companies going global, skyrocketing pay packages and countless job opportunities, the coming year promises to take these developments to the next level.

Needless to say that HR heads will be working over time either to recruit talent to meet the companies' growth targets or to chalk out HR policies to retain the best people. Experts in human resource management say that trends such as outsourcing the human resource (HR) function, flexible work timings and job sharing, prevalent in the West till now, will take off in India as well.

"A lot of business for Indian companies is either coming from abroad or going there. In such a scenario, companies will have to re-orient their HR practices and bring them in line with international norms," says James Agrawal, consulting director and head, BTI Consultants India, a global search firm specialising in CEO and senior level searches.

Clearly, at a time when mergers and acquisitions are the order of the day and growth is driven by competition, keeping the employee satisfied not only in terms of money but other benefits as well will be top priority for HR heads.

"There will be more facilities to help employees in terms of working from home, health and welfare benefits and retirement benefits," feels Sandeep Tyagi, general manager (human resources), Haier Appliances India.

However, Pankaj Shankar, global head (HR) at the technology solutions company Infogain Corporation, says that acquisition and retention of talent will not be the only challenge. "Apart from talent acquisition and retention, leadership development, aligning and integrating people's performance with business goals, management of intellectual capital and compensation management would also require attention of HR managers in the coming year," he adds.

The Indian IT services industry, which has been a forerunner in creating and implementing innovative HR strategies, is expected to focus more on strengthening the middle management cadre. The IT industry's challenge seems bigger as the sector is facing an acute shortage of skilled manpower, rising income levels and the proliferation of new job opportunities.

"Organisations that continue with traditional enterprise resource planning will struggle. Realising this, many companies have adopted various advanced technologies in their work life like human analytics, human capital management, early warning systems and others. These technologies help increase the efficiency level and meet the ever increasing needs in this competitive world," says Rosita Rabindra, executive vice-president and head (HR), NIIT Technologies [Get Quote].

The 8th annual Asia-Pacific Salary Increase Survey conducted by Hewitt Associates, a global human resources services company, found that India ranked second this year in terms of average annual salary hike. Of the 262 companies surveyed in India, none reported salaries to be stagnating or decreasing in 2007. In fact, they expect salaries to go up in 2008.

Besides pay, which drives and keeps employees satisfied in an organisation, the coming year will see recognition, brand value represented by work culture, learning and growth opportunities play important roles, feels Narotam Ahluwalia, vice-president, Royal Orchid Hotels Ltd [Get Quote], a premium chain of hotels. "Companies are and will increasingly resort to variable pay (such as incentives and bonuses) to reward and retain high performers in 2008. From the organisation's point of view, the need to balance burgeoning pay packets and tighten budget strings can be best addressed through a system of rewarding those who contribute towards its growth," adds Ahluwalia.

The spurt in job opportunities, too, is expected to continue in 2008. According to the latest Manpower survey, employment prospects in the January-March period of 2008 will be 39%, which is 3% higher than the corresponding period last year.

HR experts say that except manufacturing, nearly all other sectors are expected to hire robustly. "Sectors like IT, retail, telecom, real estate, infrastructure and media are all going to hire in a big way," adds Shankar of Infogain Corporation.

According to NIIT's Rosita Rabindra, sunrise services in the IT sector like the managed services or remote infrastructure management services (RIMS) will see robust hiring.

"This has become the next wave in off-shoring and a major growth area, which is bound to attract a lot of talent in the next couple of years," she adds.