Outsourcing has become an accepted practice worldwide. India has benefitted enormously from outsourcing in the last two decades
India's challenges for achieving growth requires a joint responsibility from the government, business leaders and population at large
While India’s economic predictions bring immense opportunities for all, organizations are realizing that they will need to prioritize latent challenges in their business agendas to encash on these opportunities. With this central theme, the Employers’ Federation of India (EFI) conducted its landmark annual event this September in Mumbai. People Matters brings an exclusive insight into the learning from the conference – Are organizations doing enough to nurture their human resource? What are the latent challenges CEOs face? Is the employee development framework adequate? These important issues and more were discussed at the conference and following were the top 10 talent challenges that emerged from the conclave.
1. Enhancing Employability
It is a paradox that in a country with a population of over one billion, where 65% people are under the age of 35 and with an average age of below 29 years, business are facing acute talent shortage of skilled manpower. Normally, these figures should indicate the availability of an immense pool of employable people for fuelling the growth of the country and not growing unemployment. This mission of massive skilling of population cannot be left to the Government alone, business leaders too, have a critical role to play through their own initiatives at the macro level as well as at the individual companies’ level.
2. Creating an Environment for Gender Inclusion
Women represent a large available talent pool today and organizations will need to look at creating a conducive environment to attract, retain and groom women in the workplace. The paradigm of management and leadership will need to be revisited to incorporate women across levels within an organization.
3. Maximizing Benefits from Outsourcing and Contract Labor
Outsourcing has become an accepted practice worldwide. India has benefitted enormously from outsourcing in the last two decades. According to available statistics, in 2008, the IT industry and BPOs employed over four million people, accounted for 7% of our GDP and 33% of foreign exchange inflow. Companies in India will also benefit from local outsourcing both by way of outsourcing of certain services like logistics management, canteen services for employees and security and by large scale usage of contract labor.
This practice is being resorted to as it provides much needed flexibility in employment for lowering costs and remaining competitive. While outsourcing and employment of contract labor are essential to reduce costs and remain competitive, at the same time the need to improve the welfare and security of the large number of outsourced and contracted employees needs to be appreciated by the employer community.
4. Making Employee Relations a Strategic Lever
Management of workers, from knowledge workers to skilled and unskilled level workers will be one of the major challenges for business leaders. While on the one hand the best HR practices from different countries can benefit the local company, at the same time the local tradition and culture need to be understood and transitioned to ensure collective harmony.
5. Encompassing Society Through Sustainability & CSR
India’s challenges for achieving growth requires a joint responsibility from the government, business leaders and population at large to integrate all layers of the demographics in the economic and social growth.
6. Managing Legal Hurdles in a New Ecosystem
Indian legal framework has not evolved with time. Most laws applicable today were drafted at the time of independence and have not matured with the economic and social journey. The Indian labor market is still rigid and low in efficiency, lacks flexibility and is over protected; it is governed by antiquated labor laws and is badly in need of reforms.
7. Creating an Environment for Innovation
Innovation is about people putting ideas into valuable action. Across industries, ideas are required from every employee to reduce costs, improve productivity and improve quality.
8. Controlling Cost
Reduction of costs is not a luxury any more. Post recession, well structured organized continuous cost reduction programmes have become a way of life, which is monitored and enforced by all customers.
9. Mastering Employee Engagement
There is a transformation in the way that employees are looking at employers today. Business leaders need to look at their workforce not as employees anymore but as volunteers. People today have the option to choose where to work, so employee engagement will be key for businesses to attract and retain their talent.
10. Enhancing Productivity
This is the sum total of all the other inputs. Enhancing employability, adopting global practices, outsourcing and bringing about a culture of innovation must ultimately lead to attainment of global levels of productivity. India’s progress in terms of productivity is lagging behind its potential. This is one of the major threats for India’s inflow of investment and capital.
The Myth of the Labor Surplus: Duncan Campbell, Director - Employment Sector, ILO, Geneva
India’s population has been seen increasingly as a dividend for the country. ‘Young’, ‘growing’, ‘available’ are the most common connotations / adjectives that are defining Indian population as opposed to China’s aging population and give India a more attractive path for growth. The dangerous assumption is that massive unemployment does not mean ready available talent. Regardless of the numbers, corporate India is facing a huge talent shortage. How is that possible? The answer is in the availability of skilled labor. The problem, as we have seen it, is not in the access to education but in the quality of education. For India’s workforce to grow at the expected rate, a redesigned effort in education and skills training is called for.
Ahead of the Curve in a Flat World: B. Santhanam, MD, Saint Gobain Glass India & President, Employers’ Federation of India (EFI)
Being ‘ahead of the curve’ in a ‘flat world’ might seem like a paradox, but the reality is that for businesses to materialize the benefits of a growing economy like India, its leaders will need to anticipate the challenges and resolve them ahead of time. In a country with a predicted growth of 9% year-on-year, one of the major barriers will be the country’s ability to add an additional 4% to 5% workforce consistently to fuel it. India’s population can be indeed a major dividend only if we are able to convert this population into employable resources. This is an economic, social and political imperative. Most important challenge is in the area of Human Resources. Firstly, the historical productivity growth rate of 3% to 5% should improve to the global standards. Secondly, the opportunity to leverage 50% women in India in the spectrum of skills should not be ignored and gender diversity is definitely a lever in adding faster skill pool for Indian industries. Organizations must create an environment that attracts, nurtures and grooms women. Managing talent at all levels in an organization is another challenge and organizations need to deploy measures to prevent skill erosion. Thirdly, the legal systems are not in tune with the changing times. There is much to be done by the stake holders especially by the government. A simpler and contemporary framework is required for the country’s growth to fructify.
</<strong>Competition Should Continue Bringing Best Performance: N. Venkataramani, MD, India Pistons & immediate past President, Employers’ Federation of India (EFI)
Never before have businesses across the globe witnessed challenges of the magnitude that we are facing today. Extreme volatility in the business conditions starting from demand for our products and services, to cost of inputs like power and raw materials, fluctuations in currency rates, commodity prices, and a whole lot of other changes in our environment that have become day-to-day occurrences are impacting businesses. With many global players operating here, India has become a favored investment destination, which attracted as much as $34 billion of foreign investment last year and is expected to cross $40 billion this year. Perhaps, compared against earlier inflows, these may not be very impressive, but we have to look at these against the background of the present economic situation in the world. Likewise, many Indian companies are now operating in foreign countries – we are seeing the emergence of Indian multinationals. Along with China, we are one of the fastest growing economies in the world – a GDP growth rate of more than 8.5% p.a. is something that we can be proud of. While there are immense opportunities for all those involved in this growth story, there are also many hurdles and challenges that need to be recognized and acted upon. The competition should bring out the best in us and it is for the CEOs and HR professionals to make sure that this happens.
</<strong>Professional Organizations will Drive Tremendous Change: Tine Staermose, Director, ILO-SRO, New Delhi
Today, businesses in India are facing major challenges. On the one hand, there is a rapidly changing environment both globally and locally, and on the other hand, a very challenging field to operate where legislation constraints and availability of talent create major barriers for prosperity. The role organizations like EFI play is very important in this scenario. Firstly, it gives the ability to influence the policy maker and legislator to the professional community; secondly, it helps in bringing together the different stakeholders for skill development. India has a tremendous potential of transforming its population into a skilled workforce combined with innovation and productivity that will stimulate growth and generate full and productive employment.
It’s Time for Proactive Employers: Dilip Chenoy, Managing Director & CEO, National Skill Development Corporation
Economic prediction says that India will need to increase its employable workforce by eight times to be able to meet the future business demands. This growth needs to happen here and now and will require innovative ways of collaborating. The NSDC mandate is to train 150 million people by 2022, which means 35,000 candidates to be trained every day until 2022! This humongous task will require the support of proactive employers. Industry today has a lot to give to support this journey like: insist on ready-to-work employees and agree to pay a fee even when the candidate has been trained by an NGO; facilitate employment of trained people by repaying their loans or be ready to pay their placement fees, et al. This not only contributes to more young people investing in their skill training but also supports the retention strategy. Getting involved in the training process and ensuring we get the people we want should be the industry’s mandate; facilitating train-the-trainer initiative as it creates an opportunity for us and our employees to have a immediate repercussion and leads to engaged employees. Involvement also means commitment, approving curriculum, providing trainers and guaranteeing 75% placement to those groups, and sharing our workplace, machinery, equipment to create a learning environment for students. The bottom line is that companies need to support this initiative by providing assistance in the form of physical presence, finance and human resource, without which the numbers cannot be delivered.
Looking Beyond Corners for Enhancing Productivity: Visty Banaji, CEO, Banner Global Consulting
The first stage in getting productivity breakthrough is to remove the barriers which leaders create. HR must own the responsibility for putting the most egregious impediments in the way of managerial productivity. We do this even before people join by demanding an antiquated set of monolithic qualifications which exclude us from tapping into India’s demographic dividend. We continue the damage by slavishly following Welchian People Maddening Systems (PMS) that convert the ‘Bell Curve’ into the ‘Hell Curve’. We top off the waste by jettisoning our most experienced managers, whom we need for training our exponentially growing workforce, by following age-discriminatory rigidities that were evolved during ‘the War for Jobs’ but are totally out of place in ‘The War for Talent’. HR has even less reason to be proud of its productivity-building record at the bottom of the pyramid. The excessive reliance that large manufacturer places on contract labor is tantamount to admitting that a local ‘mukkadam‘, with no HR department, can do a better job of extracting productivy from workmen than all our elite business school managers with armies of HR experts to support them. Productivity in many parts of the service sector is stymied by our colonial-master-bestowed legacy of never trusting the ‘native’ at the scene of the action with the authority to call the shots. Consequently, ‘Moments of Truth’, that could have become customer-delight opportunities, end up as ‘Hours of Waiting’ while the sahib-successor is consulted for every minor deviation.
Innovation in Employee Engagement: Sharad S. Patil, Secretary General, Employers’ Federation of India (EFI)
One aspect which needs much greater attention on a consistent basis is to give focused attention to employee engagement, as well as encouraging innovation at the level of ‘bottom of the pyramid’ workforce and the front line management. There is a huge potential waiting to be unleashed which can take productivity, quality and competitiveness to newer levels. There are several examples to learn from such as Tata Motors, Maruti Suzuki, et al. Rather than duplicating what others have done, companies should develop and implement processes which will produce results in their own organizations. Creativity and innovation can continually enhance productivity. But to unleash this potential, or to make the ‘elephant dance’, people within the organization must feel inspired, committed and forthcoming. There is no magic wand or techniques which can guarantee results. And although techniques and processes can help to some extent, it is transparency, honesty, consistency, management walking the talk, individual and group involvement, and reaching from heart to head that can significantly contribute toward enhancing employee engagement within an organization. Another area which may not rock the boat but may bless growth is inclusiveness extended to socially disadvantaged, physically and mentally challenged people who keep constantly knocking the doors of powers in order to secure employment. Can they not be given opportunity for some training and jobs which they can perform best to their abilities and at par with other blessed employees? Experience shows that they can be as productive, and in some cases even more so. It is therefore imperative that organizations devise their inclusivity programs to enhance diversity at workplace.