Article: 2011: The Year In Retrospect For HR

Strategic HR

2011: The Year In Retrospect For HR

Presented here are some of the key themes that were covered during the year-governance and ethics, CEO's increasing role in the talent agenda, the emerging skilling industry, business implications of India's demographic and gender dividend, and how organizations can be more talent friendly
2011: The Year In Retrospect For HR

Ethical Storm Brewing' discussed the unholy nexus between politicians, promoters and shareholders which eventually casts an ugly shadow on India's growth story


While defining what is core and what is not,each company should look at their HR processes tp identify the best way to support business requirements


Throughout 2011, People Matters, in association with industry and academia, deliberated upon diverse issues that are central to an organization and its talent agenda. Presented here are some of the key themes that were covered during the year - governance and ethics, CEO’s increasing role in the talent agenda, the emerging skilling industry, business.

Talent is intangible, yet it is talent that differentiates between a high performer and a laggard. With the war for talent, the scenario in India is more complex. It is not merely the managerial talent that organizations compete for, but for people at all levels. In a talent deficit environment, it is but logical that people occupy the centre stage. People Matters, in its regular cover stories, keenly deliberated upon the micro as well as the macro aspects keeping people as the central theme. While on one hand, the stories laid emphasis on the existing skill deficit, on the other hand, there were stories which focused on the missing link to the growth opportunity and highlighted the hitherto untapped potential. The inputs from academia and industry further enriched the stories by providing insights into how well prepared the industry is to tackle the challenges and take proactive measures to reap the benefits of future opportunities. All in all, each cover story was chosen based on its importance and relevance to the community as well as on its ability to impact business and organizations.

Governance & Ethics

As a nation, India witnessed an uprising of a sort which brought to focus the issue of ethics and probity in public life. For once, it was not only the government that was taking note of the undercurrents in the society, but so was India Inc. In its ‘seven year hitch,’ scams have become the new norm and that set the tone as to why transparency, accountability and probity must be restored. While India Inc. wrote open letter(s) on ‘governance deficit,’ they too needed some amount of ‘soul searching’. People Matters, in its Jan-Feb 2011 cover story, ‘Ethical Storm Brewing’ discussed the unholy nexus between politicians, promoters, media and shareholders, which eventually casts an ugly shadow on India’s much touted growth story. It brought to light how publicly held companies, in countries perceived as less corrupt, are valued at bigger market premiums than those in places considered corrupt. Experts put forth the point that increasing the autonomy of investigating agencies and fast tracking the judicial process would go a long way in resurrecting the large scale collapse of ethics. With specific reference to corporate, experts argue that the role of a company’s board as a conscience keeper and strategic advisor, required greater attention. The need of the hour, as the story aptly pointed, is to solve the collective problem of “global warmingesque proportions” by resorting to serious structural reforms and a visible return of propriety and ethics in public life.

CEOs driving the talent agenda

Grappling with externalities, the greatest challenge for India Inc. remains talent acquisition and retention, as reflected in People Matters – “CEO as Chief Talent Officer” survey 2011. Agreeing that people are core to their business success, 73 percent CEOs in India spend more than one-fourth of their time directly on talent-related activities. A thumping 68 percent acknowledged that focus on talent and its associated activities have increased in recent years, 79 percent also affirmed that this focus will only increase further next year. As per the findings of the survey, the three top priorities of a CEO are: building teams to meet expected growth (65%), building motivation and engagement (56%) and retention of key talent (52%). The survey categorically brings forth the point that CEOs are investing a significant part of their time on meeting the stated priorities. Having said this, talent measures and targets too find a place in CEOs’ scorecards. In fact, a CEO’s performance on these measures accounts between 20 to 30 percent of the CEO’s overall performance.

Unavailable talent: The Skilling Industry

As the focus shifts to talent acquisition and retention, the broader question, which needs urgent attention is the non-availability of a robust talent pool. The demand-supply mismatch is further worsened by the skill gap in the available workforce. The numbers to be achieved are huge and the current capacity or extent of work done in the area so far does not still look promising enough for the industry to reach the 500 million mark by 2022. The reality is that collectively, India was able to skill only around 25-30,000 people last year, which poses a question on whether the current speed and scale can meet the skilling target of 50 million per annum for the 75 year old India of 2022. There is need for financial impetus through access to loans from financial institutions for vocational training with efficient collection mechanisms to ensure sustainability and scale. The dismal state of the government-run schools and institutions has propelled the private sector to initiate a speedy entry into this sector, and the market for formal education (K-12 to Higher Education) saw a growth of $40 billion, with another $10 billion in the non-formal (preschool, coaching centers, multimedia/IT to schools and colleges, vocational studies and the book market) segment in the private education market in the last decade. The new industry is an entrepreneurial opportunity of $80 billion for skills development experts, private equity players as well as large industrial conglomerates. If the government fails in creating a well-orchestrated environment for skills development, it will boil down to the familiar Indian story of “not because, but in spite of government”. But still, the question remains can employers and skilling companies meet the humungous skills gap of 500 million in 10 years, without a pro-active shift in education policy.

Untapped talent pool: Women are opportunity

Amidst the talent crunch, an interesting fact that comes to the forefront is that the working age population in the 15 to 64 age group in India is expected to increase from 780 million in 2010 to 915 million by 2020 and to a staggering 1 billion by 2030. Yet, the sad part remains that, as a nation, India is unlikely to realize its demographic dividend to the fullest extent unless significant strides are made to increase women‘s labor force participation through an increase in employment avenues and reductions in labor market disadvantages. The moot point is, women who form close to one-half of the human resources of the country, there is a decline in work participation rate of this major chunk thereby undermining India’s demographic dividend theory. The fact is 77 percent of highly educated urban Indian women are not part of today’s workforce; in a talent deficit environment tapping this hitherto untapped workforce potential will be a significant opportunity for growth and scale. As the war for talent gets more competitive, organizations across the verticals will, in the days to come, ensure a workplace environment that attracts nurtures and retains women talent.

Innovation in hiring process: The new edge

But how does one attract talent and more so when there is talent deficit? As organizations, besides competing for customers, are on the same footing competing for quality talent, does it make business sense for them to rely on the traditional tools to attract talent? As the new generation joins the workplace, it will require new ways of attracting and recruiting talent. Social media hiring is emerging as mainstream, supplementing consultants and job boards. GTM-People Matters study points out that 4 out of 5 top employers in India use social media for hiring, and 2 out of 3 have a corporate page on social media platform. The study further finds that companies with high “Talent Friendliness Index” have 46 percent higher return on invested capital (ROIC). With present day talent pool for which social media is the new norm, companies will necessarily need to incorporate social hiring tools to attract talent and leverage their career site to optimally provide in-depth information about their company and make the engagement and experience attractive for candidates.

Transforming HR for a new organizational reality

With the dynamics of business changing and triggering change in organization structures and processes, HR delivery needs to redefine its priorities to adapt itself to the new realities. In this light, the essential question is, what are core and non-core business activities within the periphery of HR. Ideally, HR transformation will require HR teams to define what is ‘high-touch’ and what is ‘high-transaction’ when deciding what is core and what is not. Further, they must look at outsourcing everything that is high-transaction. Even in the high-touch areas, very specialized services will also be outsourced when the size of the company does not justify a full-time team for delivering this service, for example, coaching and mentoring. In the high-transaction area, most activities will either be replaced by technology or be outsourced to third party vendors. While defining what is core and what is not, each company should look at their HR processes to identify the best way to support business requirements. As the debate over whether to retain the activity or outsource the same continues, HR teams need to ‘let go’ of transactional work and take on a role that supports organizations with strategic inputs and execution towards business plans. If this unfolds in the future, which is likely so, we could see new equations emerging in the HR industry.

A new industry in the offing: The Industry of HR

Consolidation and entry of new players backed by VC funding are the key reasons for the rapid growth of the HR industry. Organizations who till date have been focusing on defined areas in HR will seek to expand their offerings to leverage the opportunities to cross sell and up sell to capture the complete business potential of the HR value chain. Mafoi Randstand investing in outsourcing in strategic alliance with ADP; executive search firm Korn Ferry leveraging their inbuilt capabilities to deliver leadership and talent consulting with Lominger and recruitment services and RPO with Futurestep are a few examples in this direction. Access to better technology, marketing strategies, and benefits derived in terms of offerings and outreach will be the key drivers of consolidation in the HR industry. These changing dynamics in favor of the industry will help HR to portray itself as an attractive career option for candidates in sales, marketing, and finance.

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Topics: Strategic HR, C-Suite

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