‘Retention is not a metric, it's a moat’: Blue Star Group CHRO on India's talent challenge

For years, organisations measured retention the same way they measured absenteeism, hiring or attrition.

It sat on a dashboard.

A percentage to monitor. A quarterly number to explain. A metric.

Arun Rajan, Group Chief Human Resources Officer at Blue Star Limited, believes that thinking is increasingly outdated.

In an interview with People Matters, Rajan offers a different perspective on what is happening inside India's industrial workforce. The country's challenge, he suggests, is no longer simply about finding talent. It is about finding the right talent, building the right capabilities and creating the kind of workplace experience that makes skilled employees stay.

His conclusion is striking. "Retention is not just a metric; it is a moat."

It is an observation that reflects a broader shift taking place across India's HVAC, engineering, manufacturing and industrial sectors, where talent shortages are becoming less about headcount and more about capability.

Why the talent conversation has changed

The traditional way of discussing talent shortages focuses on numbers.

• How many engineers are available?
• How many technicians can be hired?
• How quickly can vacancies be filled?

Rajan believes organisations are now facing a different reality.

"What is becoming most visible today is a shortage of deployment-ready, multi-skilled talent."

As products become smarter and operating environments become more technology-led, employers increasingly need people who can move across multiple disciplines rather than operate within a single specialisation.

"Organisations are no longer looking only for conventional mechanical or electrical skills; we need people who can work across mechanical systems, controls, automation, electronics, diagnostics, software interfaces, and customer-facing problem-solving."

That blend of skills remains scarce.

As a result, roles such as automation specialists, mechatronics engineers, digital service professionals and technicians capable of operating in technology-enabled environments are becoming increasingly difficult to fill.

The implications extend beyond recruitment.

"From a business standpoint, this is beginning to impact speed, scalability, service quality, and execution readiness."

The workforce challenge, therefore, is no longer confined to HR.

"So, the talent shortage is not just an HR issue anymore; it is increasingly a growth and competitiveness issue."

The aspiration gap nobody talks about

If capability is one side of the problem, aspiration is the other.

One of the more revealing observations Rajan makes concerns the changing relationship younger workers have with industrial careers.

"In my view, this is as much an aspiration issue as it is a supply issue."

Younger professionals today are making career decisions differently from previous generations. Compensation remains important, but it is no longer the sole deciding factor.

"Young talent today is evaluating careers not just on compensation, but on lifestyle, identity, flexibility, growth, and how future-relevant the role feels."

The challenge for industrial sectors is that many continue to be viewed through an outdated lens.

Technical, manufacturing and field-intensive jobs are often perceived as traditional roles despite becoming significantly more technology-driven.

"The reality, however, is that these sectors have changed significantly."

Businesses across HVAC, engineering and consumer durables increasingly rely on advanced technologies, digital systems and evolving customer experiences.

"But the market perception has not caught up."

That disconnect is creating a talent attraction challenge that goes beyond recruitment campaigns.

"If these careers continue to be projected as conventional factory or field jobs, we will keep seeing younger workers move elsewhere."

The problem with India's skilling model

The discussion inevitably leads to a larger question.

If industry demand is rising, why is capability not keeping pace?

Rajan believes the answer lies in a growing disconnect between economic ambition and workforce readiness.

"What we are experiencing is a structural gap between ambition and readiness."

India is investing heavily in manufacturing, infrastructure, cooling technologies, industrial modernisation and energy transition.

Yet the skilling ecosystem is still adapting to the complexity of those demands.

"Educational ecosystems are still primarily focussed on qualifications rather than job-ready capability."

That distinction matters.

Employers increasingly need practical capability rather than theoretical qualification alone.

"Skilling can no longer be treated as a volume exercise alone."

Instead, Rajan believes skill development must become more application-oriented, demand-led and closely aligned with workplace realities.

"If India wants to operate world-class infrastructure and build globally competitive industrial businesses, skilling must move from certification to capability."

Why employees are redefining the employment contract

Another major shift is taking place inside the workforce itself.

Employee expectations are changing.

And according to Rajan, organisations need to recognise that the workforce entering industrial sectors today looks very different from the workforce that entered a decade ago.

"As more women enter frontline, technical, and operational roles, and as a larger share of these teams comes from Gen Z, organisations have to think more deliberately about safety, inclusion, flexibility, career continuity, and equitable access to growth."

The implications extend beyond workplace policies.

Employees increasingly expect:

• Faster learning opportunities
• Visible career progression
• Supportive managers
• Meaningful work
• Long-term development pathways
• Inclusive growth opportunities

"The question is not just whether they have a job, but whether that job can take them somewhere."

That desire for progression is becoming central to retention itself.

"They are looking for visible pathways to build capability, access higher education, and move into larger responsibilities over time."

Why paying more is not enough

Perhaps the most important insight in Rajan's assessment is that retention cannot be solved through compensation alone.

As industrial sectors expand, demand for skilled engineers, technicians and operational talent continues to exceed supply.

"What makes retention difficult today is that industry expansion itself is intensifying the competition for talent."

Capable professionals are increasingly visible in the market.

And increasingly mobile.

"What we are seeing, therefore, is a market where organisations are often willing to pay a premium to attract proven talent rather than wait to build it."

Yet Rajan believes that approach addresses symptoms rather than causes.

"People also leave when they do not see growth, when managerial quality is inconsistent, when the work environment becomes transactional, or when there is no clear sense of progression."

The solution, he argues, is more structural.

"The more sustainable response is to build a stronger capability architecture around the role itself."

That includes:

• Clearer career pathways
• Better supervision
• Stronger learning journeys
• Development opportunities
• Visible progression from entry-level roles to long-term careers

That is where retention stops being an HR metric and starts becoming a competitive advantage.

"In a market like this, retention is not just a metric; it is a moat."

Transforming while performing

Industrial businesses are facing multiple transformations simultaneously.

Products are becoming more technology-led. Innovation is creating new categories. New markets and channels are emerging. Manufacturing priorities are shifting. Productivity expectations are increasing.

According to Rajan, that complexity means organisations can no longer rely on a one-size-fits-all talent strategy.

"We will have to have a segmented play."

Different workforce segments require different interventions depending on whether the objective is immediate productivity, capability development or long-term talent pipeline creation.

Businesses must solve today's workforce challenges while preparing for tomorrow's.

"This is, in many ways, a classic case of having to transform while we perform."

Looking beyond the talent shortage narrative

India's workforce story is often told through the lens of demographics.

A young population. A growing labour force. A large talent pool.

Rajan's perspective offers a more nuanced view.

The future may depend less on how many people enter the workforce and more on whether the system can produce people who are genuinely ready for the demands of modern industry.

He believes progress is being made.

Industry, academia, apprenticeships and vocational education are becoming more connected than they once were.

But further work is needed to strengthen trainer capability, deepen employer participation, expand apprenticeships and improve employability outcomes.

"I believe India is on the right path."

The challenge now is ensuring capability develops at the same speed as ambition.

Because in a labour market where skilled talent is increasingly difficult to replace, organisations may discover that their strongest competitive advantage is not what they build.

It is who they manage to keep.