The fast growing services industry has reduced the average age of workforce, and companies must identify ways to manage Gen Y more effectively
The realisation that monetary rewards alone cannot help in retaining and attracting employees had companies deploying innovative tools and techniques
Increasing business complexity and the India growth story of has steered companies to realize the new essence of talent management as a revenue generating function, where organizations revisiting talent management techniques to ensure workplace productivity does not suffer.
The past couple of years have seen various macro changes in India affecting the talent management space, and giving rise to new trends in the ‘talent management practices’ that companies are imbibing. India needs to recover from the lost growth momentum as the economy now treads on a growth trajectory with an expected GDP growth of 8-9 per cent this fiscal. This in turn translates into immense growth opportunities for Indian companies which are once again geared to capture the market with their products and services. However, in this new innings for growth, technology, products & services alone, will no longer give a competitive edge to companies. There is a need for an ingenious set of collective talent, which is technically sound and operationally equipped. Along with other revenue generating functions, talent management too has become a strategic focus for organizations driving workplace productivity. The fast growing services industry has reduced the average age of workforce, and companies must identify ways to manage Gen Y more effectively. The huge scale of business corporations, and their global stature, has also led to a short supply of leadership as well as mid-level talent.
Additionally, the gap between demand and supply of talent has lead to an unprecedented movement of workforce. Organizations aiming to reach higher revenues in a much shorter time span, are poaching talent to equip their businesses with the right intellectual capabilities. Poaching of talent is also taking place at the senior level, a case in point being the power sector. With the US tightening controls, there is pressure on Indian companies to look at the domestic or other markets for business and talent opportunities. Companies are also looking at ‘geo-diversity’ and going forward, the diversity in talent will be a major challenge that companies will face.
These macro changes have paved ways for new trends being followed by Companies and HR. With enhanced attention to the people function, there is a clear trend towards upgrading the HR function to help match the pace of growth that companies are envisaging. Many progressive organizations, including traditional leaders, are attempting to make ‘HR Transformation’ an integral part of the larger business transformation, with talent management being a vital area of attention. Companies are devising strategic roadmaps for succession planning, for senior executives and mid-level executives alike, by actively tracking the progress of high performers, and preparing them for future leadership roles. Today, there is an increasing realization that the most vibrant enterprises harness human capital through employee engagement and creating happy employees, leading to happy organizations and stakeholders. Intangibles leading to ‘psychic income’ is getting its fair measure of attention to create a culture and environment which can be a non-replicable differentiator. The changing demographics at the workplace is making companies draft flexible working policies, with emphasis on work-life balance. Where hitherto, organizations would settle for a 50-60% job-fit, they no more settle for anything less than 80-90% job-fit. There is an increased focus on building strengths around talent, with special emphasis on the diversity ratio during the recruitment phase. Global enterprises have a compelling need to create and run global talent management practices to provide seamless operations. This is also aimed towards rapid deployment of a mobile global workforce towards high growth destinations.
To address the needs of Gen Y, organizations are helping them maintain a work-life balance through facilities like ‘House Repair’, ‘Concierge Services’, ‘Financial Loans’, etc. The focus is on creating a work culture that promotes the concept of fun-at-work which has become a critical element. Companies are devising career roadmaps, customized pay packages and working policies, to suit the needs of employees. Employee-friendly policies and practices like flexi-time policy, work-from-home for 1-2 days a week, shuttle services from the metro to office, mandatory 15 days off in a year, day-care facilities, gymnasium facility, extended maternity leave, insurance policy covering two parents, employee recognition scheme, etc are increasingly being extended to employees.
The emerging trend is looked at as an opportunity to develop the employee value propositions within organizations, to retain and attract the best talent. There is realization that monetary rewards alone cannot help in retaining and attracting employees, and companies are therefore deploying innovative tools and techniques to implement an effective talent management exercise. There is increased emphasis on development opportunities, aligned with succession planning for high performers, to develop a strong leadership pipeline. Identification of high performers is done through structured formats like assessment centers and other scientific techniques.
Companies like P&G undertake 99 per cent of their hiring directly from campuses, and follow the concept of ‘building from within’. This helps them to inculcate the organization’s culture in the employees from the beginning. The HR and senior leadership regularly interacts with employees through Web, Podcasts, Telepresence, etc, to communicate new business developments and advance career opportunities for employees.
Total Rewards has also undergone a change with employees demanding flexible salary components. An example being Bharti Airtel providing a 50-50 split between fixed and variable pay to senior employees. There is focus on employees’ need for constant upgradation of skills, expertise and competencies, to deal with business uncertainties. Companies are creating mandatory on-the-job training programs for new joinees, filling 100 per cent senior positions internally, instilling a dedicated hiring program where 50-60 per cent of final hiring is done through summer internships, and remaining positions filled through fresh campus hiring. Post-downturn, organizations have become extra cautious on the quality as well as the quantity of talent. The opening of the job market and key talent scouting for better opportunities, has left a dent in the business operations of companies which do not have ready talent to replace the casualties.
N.S. Rajan, Partner and Leader – People & Organization, Europe, Middle East, India and Africa, Ernst & Young