Talent Beyond Borders

Travel is as old as man. Be it for basic necessities like food or water, or even bigger ones like earning a livelihood or plying one’s trade, travel has been the most common denominator. The lure of earning more money, having a better life and seeing new places prompted people to migrate and seek new opportunities far and wide, especially the developed world, which was witnessing a robust and growing economy. The post-industrial modern economic era saw developed nations like the US, the UK and Australia steadily becoming the hotbeds of skilled talent from across the globe.

While these economies continue to enjoy the privilege of ‘hot talent destinations’ to date, there is a new world order emerging on the other side. And this world order does not feature the US, the UK and Canada in the Top 10! According to LinkedIn’s study of its global database, the United Arab Emirates, Switzerland, and Saudi Arabia have become the highest importers of talent!! That’s not all: Singapore and India too feature among the highest importers of global talent. This is contrary of the perception that India is a major exporter of talent. More on that later.

Oxford Economics, an organization that tracks key developments that impact the nature and composition of global economics, published a report titled, “Global Talent 2021” in late 2012. The report argues that massive shifts in global talent movements is likely to happen across the next five to 10 years. An in depth assessment of the composition of demand across industries around the globe reveals that Emerging Asia will outrun the overall talent demand by a significant margin. While the overall talent demand will be 22.2 per cent in Emerging Asia, its closest competition will be Latin America at 13.2 per cent. What is interesting to note is that Western Europe, North America and Developed Asia will be the smallest importers of talent in the coming times.

As the new world order changes, emerging economies led by China and India are fighting tooth and nail for talent and this is the primary reason for increase in talent migration. A study by PWC, Talent Mobility 2020’ states that Western multinationals are already struggling to compete with the new and dynamic multinationals from emerging economies in the fiercely competitive battlegrounds of the emerging world. China’s banking is likely to overtake the US by 2023 and the leading emerging economies, including China, India, Brazil and Russia, will have banking assets and profits exceeding the G7. The rapid shift in talent flow from the developed to the emerging world is already starting to show. LinkedIn’s analysis shows that the top four cities that attract tech talent from across the globe are Bangalore, Pune, Hyderabad, and Chennai and not the Silicon Valley.

In India, sectors like construction, infrastructure and oil & gas sectors are going to be the leading talent importers in the country. Strategy& (Formerly Booz & Company) “The Big Crew Change” provides compelling evidence that oil & gas companies in India will soon be tapping the global talent pool extensively to meet their current talent shortages. Recent World Bank statistics sufficiently prove that the construction and infrastructure sectors in India are among the highest importers of skilled talent and the trend is not likely to go down in the coming times.

Another reason why pace of migration in India has increased is because of the rise in expat hiring. It is fast becoming a trend in the Indian services sector, especially at senior leadership roles. GoinGlobal, a research community tracking talent demands from various economies across the globe, in a February 2014 report states that Indian companies in the FMCG and consumer durables, engineering, manufacturing, telecommunication and services sectors will be aggressively looking to hire expatriates in the coming months. Sannam S4, a market entry research organization, says that there are as many as 40,000 expats working in various industries in India currently, and hiring of expats has gone up by 5-10 per cent in 2014 compared to 2010.

At the same time, there is also a healthy outflow of talent in various sectors in the emerging world. The STEM workforce shortage in the developed world is no secret. By 2015, almost 88 per cent of the world’s STEM talent will be produced in Brazil, India, and China. Reports from the Gulf Cooperation Council (GCC) state that the UAE and other member countries face serious skilled medical talent shortages and will be looking to import heavily from across the globe. India is among the highest exporters of medical talent to the Gulf countries. Earlier this year, the petroleum ministry prepared a list of 5,000 retired hydrocarbon professionals to showcase to energy-rich countries across the globe.

All these developments indicate one pivotal call for action–organizations, especially those in India, need to adapt quickly and prepare themselves to the realities of the global talent market. Organizations that fail to adopt to the new world order risk not just obsolescence, but also the difficulty to compete in a business environment where product and innovation cycles are shrinking by the day. In this cover story, we attempt to find out what opportunities the new world order present, how the India story will develop as boundaries of talent movement diminish by the day and the signs that HR leaders should look out for to help them understand the dynamics of dealing with a global talent workforce.

Talent movements have become easier as governments across the world recognize the need for skilled talent. Hence, governments are fine-tuning their visa and immigration policies that makes it easier for their industries to attract talent. At the start of 2015, Canada will adopt a new system of immigration that will make it easier for global professionals to shift to the country for work. Earlier this year, France introduced a new set of visas to attract start-ups and entrepreneurs from outside the EU.

Russia, China, UK, and Japan are planning to create their own versions of Silicon Valley and are actively investing in creating speciality talent territories for innovation. EY’s 2014 ‘India Attractiveness’ report provides a positive outlook for Indian companies. While concerns of economic and political stability, and general safety still plague the country’s image as an international talent destination. That said, several recent government initiatives intend to positively contribute to free flow of expat talent in India. Among them the key highlights include the Companies Act 2013, safe harbour rules, tax administration reforms, and raising of FDI limits.

Internationally, governments and administrators are looking to make talent movements smooth and fast to enable the import of quality talent. With the razing of administrative hurdles, making immigration and visa norms easier, and creating an attractive environment, organisations globally can view the talent globe as a truly borderless one.

So how does having a global talent pool help? It provides an organization unprecedented access to higher experience and skills, thereby fuelling growth. The Indian infrastructure scene is a good example of how the import of people and technology helped to build some of the most iconic infrastructure projects in the past two decades such as the Metro Rail projects, commercial and corporate establishments, and surface and air infrastructure. New building techniques, introduction of some of the most advanced engineering technologies and conceptualization of projects with unprecedented size and scale were among the few factors that completely transformed the industry in India from the times of century-old “IS codes” and primordial methodologies and building material.

The sector continues to be among the highest importers of experienced architects, designers, and planners from countries such as Singapore, Thailand, Australia and New Zealand. The important question is—“How many organizations and sectors in India are seriously working to build a global talent pool?” Evidence suggests that the most progressive ones across sectors are silently and methodically engaged in building a global talent base, not just by aggressively hiring global talent, but also through the meticulous development of pipelines of targeted repatriates, grooming internal talent through global rotations, and carefully devising retention plans to avoid losing key talent to global competition.

So what attracts talent now? Faster growth, challenging work and enhanced learning opportunities— things that the emerging world is much better poised to provide to the talent universe. For many global professionals, an “India-stint” or an “Africa-stint” have now become an essential component of their CV value. Indian organizations thus have an excellent opportunity to attract global talent if they are able to hit the proverbial nail on the head. Pali Tripathi, Co-Lead, Organization, Change, and Leadership Practice, at Strategy& says, “Companies across the globe are witnessing a saturation in the established markets. Developing markets such as Africa have surprisingly become some of the most active talent destinations globally.”

Many Indian majors such as Godrej, Aditya Birla, and Wipro are hiring aggressively from global business schools and graduate colleges to fuel their expansion plans in South-East Asia, Latin America, the US, and Africa. Hiring a blend of global and local talent helps organizations achieve a balance between local knowledge and global expertise. Infosys, at the beginning of the year, announced its plans to hire 200 from overseas business schools to create a global talent pool. The number of international graduate students from reputed Indian business schools, such as the IIMs and ISBs, who choose to stay back in India after completing their education have also risen.

Almost every country across the globe faces surpluses and deficits of skills in various forms. The shortage of professionals with the right soft skills is evident in a country like India, where cultural emphasis revolves around the development of hard skills or trades. Hard skills, on the other hand, are getting increasingly rarer to find in the Western world. Recent ILO statistics indicate that over 40 million people in the industrialized world are unemployed and yet, recruiting skilled talent features as the top challenge for recruiters and executives across economies. This evidently indicates that business demands are far outpacing the skills landscape. The Gulf countries are recruiting talent heavily from India and neighbouring countries for specialized skilled and semi-skilled professions, including healthcare and hospitality. In its latest skills schedule, Australia has released 17 trades for which there is a distinct need for talent, and the Australian government plans to source talent from across the globe to fill those positions.

Dilip Chenoy, CEO and MD, National Skill Development Corporation says, “The developing world is facing a shortage of soft skills such as languages, communication, and leadership. Among hard skills, several economies across the globe face shortage of finance, IT, R&D, and healthcare skills. Construction, healthcare, and the service economy will continue to be human-intensive in the foreseeable future and economies across the globe will be looking to employ experienced talent in these sectors.” In India, companies continue to hire expats in and auto, hotel, hospitality and airlines industries heavily and this trend will likely continue. Both the developed and the developing world economies will continue to face shortages of skilled technicians, sales representatives, and engineers and organizations looking to future-proof their talent plans need to seriously start thinking about how to develop, retain, and attract global talent.

While the migration of skilled talent out of the country presents a huge risk, there is also the other side of the story. Talent repatriation has becoming a noticeable trend in the market. Professionals who left the country in their 20s and have gained more than 15-20 years of experience are looking to return to the country. Such candidates not only bring with them a wealth of experience, but also global skills that aid disruptive developments in the market. “In the auto sector,” Chenoy says, “M&M hired Dr. Goenka as GM R&D and he was instrumental for the development of several leading-edge products for the company, including the hugely successful Scorpio SUV.” Goenka, incidentally, served for 14 years at General Motors USA in several roles. The auto sector also has the example of V. Sumantran who brought back with him several years of global automotive industry experience for Hinduja Automotive Ltd. and Tata Motors. The hotel and airline segments also offer several example of employing international repatriate talent in India.

While there are no benchmarks or baselines to it, most of these repatriation opportunities happen at the 45-plus age bracket. The advantage of hiring repatriates is that they require little or no cultural conditioning. The over 45 repatriate talent pool, thus, presents immense opportunities for Indian companies to source candidates for executive positions.

Of course, there is the other side of coin: Talent rotation. Talent rotations are an integral part of the professional experience in several companies. Multi-national companies rotate talent across locations and this helps them build a pool of skilled employees who are not only loyal to the enterprise goals but also comprise a wealth of diverse global experiences. Companies such as Unilever and Prudential, like many others, organize management trainee programs, for newly hired management graduates that expose them to a diverse set of offices and working cultures in different international locations. The management trainees gather a wealth of international experience through short stints. These companies invest in their talent starting at the junior management stages.

Philips India’s global career programs for young talent is exemplary in many ways. These programs serve to provide bright talent in the company with the skills and exposure to gain global skills. The company’s commercial leadership program kicks off with an induction program in the Netherlands followed by two stints, one in the home country and the other in a growth market. Besides that, the company also provides its young technology talent with a two-year global rotation program called the BIC (Brazil, India, China) IT Leadership Program where participants get coaching and mentorship for professional development. Philips also has a two year global Human Resources Leadership Development Program to prepare strong and dynamic leaders for various HR roles. The Vodafone ‘Columbus’ programme is another example of a company willing to invest in its young talent for global skills. The year-long program is designed for the age group of 23-28 years who move across Vodafone Group’s operating companies across the globe.

At the same time, there are several others who hesitate to invest in their talent for international assignments. Many even have clearly defined policy that prohibits professional travel of staff below certain hierarchical levels for international assignments. Organizations typically make it difficult for talent rotations at the junior level by introducing several administrative bottlenecks such as approvals and business cases. Such hindrances prevent the organization from exploiting the massive potential opportunities that international rotations offer. D. Rajiv Krishnan, Partner & India Leader at EY says, “There is a stage in people’s careers, typically after 3-5 years where they look for overseas posting. If the organization is unable to provide them, they quit and join an organization which offers to provide them with the experiences they seek. In some cases, the amount of bureaucracy and procedural hassles take so long that the employee leaves the company to join an organization that can offer them these experiences with lesser hassles. This is true even for global companies operating in India.” In order to truly reap the benefit of a workforce with global mind-sets, organizations need to seriously start thinking about providing their talent with early-career international opportunities.

Having a global workforce will not only become a reality in the coming months, it will become a necessity for business corporations. With evolving nature of preferences, talent movements getting easier, and favourable government policy, Indian organizations can look forward to building a truly global workforce. While many are seriously looking to building global skills and global leaders, several others are yet to recognize these opportunities. As much as global talent movements depend on political and economic conditions, organizations have it in their control to build solid hiring processes, a strong talent brand, and robust rotation standards to be able to tap into the wealth of global talent.