The Recession Reaction Correction in salaries, focus on productivity, and no poaching!

nullSix months ago, poaching, job-hopping and inflation of salaries were commonplace in the industry. A fatal (seemingly), self inflicted culture which the industry was grappling with unsuccessfully. Interestingly, one of the lesser negative (or shall we say positive?) effects of the recession is that the spiralling salary structures threatening the Industry‘s cost competitiveness have come under control. Back then no one would have even dreamt that there would be a reversal so soon. Today, things have changed and cost has become very dear, it‘s the survival of the fittest. Be it the studio, or the artist. “Reality had to set in” opines Anibrain‘s Jesh Krishna Murthy, “Going to a situation where artists don‘t make money is certainly not desirable. Neither do we want to be in a situation where India is as expensive as the US. This correction will allow us to remain competitive vis-a-vis the West and emerging economies.” The pain of the unreasonable salary inflations, and the subsequent relief with market corrections is evident as one speaks to the studio heads. To quote Dhruva‘s Rajesh Rao “The extremely bullish phase of the past 3 to 5 years was characterized by 20 to 30% salary increases being taken for granted, and job offers that doubled pay packages instantly … it made many lose sight of the basic requirement of constantly improving skills and performance. There were also times when managers and leads would find it difficult to be critical with their teams, for the fear of losing people. The current market conditions are bringing a much needed correction to those unhealthy trends. It will allow us to become more competitive which is going to be good in the long run.” Crest‘s AK Madhavan agrees. “Though at Crest we were always conservative and pragmatic with our salary structures, the market dynamics were not healthy. All the huge vulgar salaries have now come down to logical and reasonable levels” Toonz India‘s Jayakumar stressed that costs needed to be kept in check in order to stay competitive in the industry. With 60 to 70% of monthly expenditure being salaries, correction is imperative in these trying times. “These days there is an air of caution on the hiring pattern which is directly linked to the project demands in hand. I am getting 100s of applications from experienced people everyday who are aware that the market dynamics are reversing and are willing to forgo fat pursed salaries” he shared. “70% of our cost is staff salaries and it is ideal to have a check on them, I strongly believe this was a correction to make sure that the industry is as productive as possible and is fit for survival. Everyone needs to become cost effective to survive.” He added. Paprikaas Nandish Domlur was perhaps the only one amongst the studios spoken to who was bullish on recruiting. “As a studio we have always been cautious about costs, but that doesn‘t mean we will not ramp up, in fact we are recruiting good talent aggressively.” One thought nags consistently, with layoffs as rampant as the corrections in salary, what about the hundreds and thousands of young students who have invested their time and money into joining courses to pursue an animation career? What about the era of 150% placement guarantees? The recession effect is indicating that institutes might have to shift focus from expanding the number of their franchisees, to ensuring that every student who goes out in the market is equipped with the right fundamentals, training, and work ethic. Or else, things will be really contrary to what has been positioned. Commenting on this Animation Xpress viewpoint, the studios maintained that it was not as if recruitment had completely been stopped but it was just that with the demand supply reversing, the access to experience and talent was much better for studios who were now in a position to select, while earlier they had to just add to the number of seats even if an individual‘s productivity levels were low. Madhavan inputs that, “Whatever the demand supply scenario, I still think there is dearth of trained talent and institutes need to focus on improving the same” Toonz Animation India also has its own chain of Animation Institutes. On being posed with the query of what about the new students given the recruitment situation, Jayakumar opined, “Studios have a pyramid structure in their teams and there is always a constant infusion of fresh talent, for reasons of creativity, as well as cost. Good students who will work hard and hone their talent will always get jobs. It is inefficiency being weeded out and unreasonable salaries that are being corrected. Not the opportunity for good talent to find work” Whatever the case, the era of 150% placement guarantees by institutes, rampant poaching and 150% salary hikes seems to have just passed away. For the time being, or for good, remains to be seen.