Thursday, November 5, 2009
India: Desperately Seeking Talent
With India's economy on a tear, these are heady times for Bombay-based Larsen & Toubro Ltd. The company, India's top construction and engineering outfit, has seen its sales jump by 35% in the past year as Delhi boosts spending on roads and ports and India Inc. invests in more factories and office parks. But L&T Chairman Anil Manibhai Naik isn't celebrating. That's because he can't hire enough mechanical engineers to keep up with all the work. Despite boosting wages for rookie engineers by 25% -- to roughly $5,700 per year -- Naik is still losing potential recruits to the software industry, multinational competitors in India, or rivals in the Persian Gulf that pay twice his current rate. Says Naik: "Everyone is growing fast, and India is facing a talent shortage."
Tuesday, October 27, 2009
Coping With the Talent Crunch
Training employees ensures future loyalty, If economic incentives are your only tool for coping with the talent crunch, you may win the battle (putting bodies in the cubicles), but lose the war (creating long-term competitive advantage).
This scene tells the story:
The leadership team of a $100 million manufacturing company is sitting around the conference table rejoicing in their increased sales, but concerned about turnover, inability to attract competent new hires and no heirs apparent for their positions. They consider adding benefit incentives that reward longevity, thus creating "golden handcuffs."
Most businesses are struggling with the need for talent. Whether the arena is fast food, technology start-up, big-time consulting or mature manufacturing, the challenge is great From where is the talent going to come to navigate the bumps on today's business racetrack?
Faced with the problem, many employers have demonstrated great creativity in designing ads, tailoring benefit packages, flexible work hours, signing and recruiting bonuses, etc. An argument could be made that those unique salaries and benefits create "golden handcuffs," keeping people in place who don't want to be there. They may cause employers to attract and retain the "wrong" people for their business.
Those "wrong" people may stay despite the fact that they don't fit with the business and jobs, simply because the compensation is good. At best, these attractions are necessary to compete, but only keep you even with the competition.
This scene tells the story:
The leadership team of a $100 million manufacturing company is sitting around the conference table rejoicing in their increased sales, but concerned about turnover, inability to attract competent new hires and no heirs apparent for their positions. They consider adding benefit incentives that reward longevity, thus creating "golden handcuffs."
Most businesses are struggling with the need for talent. Whether the arena is fast food, technology start-up, big-time consulting or mature manufacturing, the challenge is great From where is the talent going to come to navigate the bumps on today's business racetrack?
Faced with the problem, many employers have demonstrated great creativity in designing ads, tailoring benefit packages, flexible work hours, signing and recruiting bonuses, etc. An argument could be made that those unique salaries and benefits create "golden handcuffs," keeping people in place who don't want to be there. They may cause employers to attract and retain the "wrong" people for their business.
Those "wrong" people may stay despite the fact that they don't fit with the business and jobs, simply because the compensation is good. At best, these attractions are necessary to compete, but only keep you even with the competition.
Saturday, October 24, 2009
Right skilling addresses talent crunch’
You should have an open mindset and if you recognise the need to globalise and accept people from different cultures you are okay.
It’s a weekend but there is no let-up for the indefatigable Director, Human Resources of software major Infosys Technologies Ltd, T.V. Mohandas Pai. Just back from a long trip to the US, Pai is soon after in Chennai to speak at an event organised by this newspaper. It’s a few days before the company’s results for the last quarter of ’07 are to be announced, so Pai is wary of giving away anything pertaining to its business plans saying it’s the quiet period. But ask him about the software industry’s main asset, brainpower, and Pai is at his loquacious best. The New Manager interviewed Pai in the car from the airport to glean his views on a variety of issues that confront Infosys and the industry. Excerpts:
How do you react to the charge by other industries that software is sucking up lots of talent; that students from other disciplines are all heading to software.
It’s true that the IT industry is attracting a lot of good talent, it’s also true that other industries are feeling constrained. It has to do with the culture of Indian industry where for very long they had access to very good people paying very low wages. I remember several years ago, engineers used to get Rs 6,000-7,000. CAs used to get less than a lakh a year and now they get Rs 10 lakh. So, it’s a sea change, which means that talent is getting priced right and you have to compete for it. So each industry has to work on its employee brand and come out with a set of attributes that will attract people and industry has to work with academia to have backward linkages and make sure you put your capabilities in front of potential employees and compete for talent. I think it’s a good thing for the middle-class and a good thing for India.
So, you think employers from other industries complaining about the great software suck-up of talent is unwarranted?
It’s not fair to say it’s unwarranted. But society exists for individual members and not for management of companies; society as a whole is made of individuals like you and me and our interests are paramount to society’s so if someone complains then it’s the wrong thing to do because it will only prove that they are not popular employees. But, yes, as a society we should all accept that we should have adequate talent and enable industry to grow as everything cannot be IT and indeed IT is not the solution to India’s challenges; it’s a small part of the solution. But we need to understand the dynamics of the labour market and come out with appropriate strategies.
For example, the construction industry for very long has not invested in civil engineering in academia. Today, they are paying more money than the IT industry to get good talent; it’s a good thing but beneath all that there is one thing all of us need to do — that is right skilling. For too long Indian industry has had overqualified people doing under skilled jobs.
Now the only solution for India, including IT, is to do right skilling to find out the attributes of job needs and match that with the skills required and find the right kind of people for jobs.
For example, in our BPO industry we had high attrition and our HR head came up with an idea – she said we would find people who were happy doing the job, who were contented and we went to the smaller towns and found a different class of people who were happy doing that job. They have a different view of life and so are their aspirations. You go to an urban, middle-class young man who has passed out of a top city college, his aspirations are totally different. Right skilling is the way out and if we sit down and do that, then there is enough talent for everybody.
The rapid growth of the IT industry has seen younger people assume huge responsibilities and roles…
We have been pushing young people one or two rungs up but this could have its repercussions because if you push young people up too fast they could falter somewhere up the line. It takes time to handle people, to develop managerial skills and if you push them up too fast, they find that they don’t fit and burn out. I’ve seen it happen in the IT industry, because not everybody who is pushed up fast makes it to the top. People need time to grow. In earlier generations, there was stability. Once you promote people every two years, give them more responsibility, stress levels also go up; not everybody has the capability and not everyone can grow at the same pace.
With the recession in the US, what are the overall indications for IT hiring for the year?
It is part of the global industry which sees up and downs. If things are growing well in the West, which is our major market, then you will see higher growth. But if things don’t go well, they want to cut costs and come to us to outsource more work. So, the Indian IT industry is fairly well positioned but how long will there be a gap between the global economy cooling down and more outsourcing work coming to India – that’s the challenge.
You employ 89,000 people across 23 countries, 60 nationalities, how do you manage this diversity?
We have a distributed leadership model and we try to create a common value system across the enterprise. We are also trying to create a common culture. But it’s going to be very difficult to have a common culture that binds the organisation across geographies and at the same time have a culture that is unique to the location where we are situated, because in every location we need to have local talent coming to us. Right now, the Indian IT industry is configured with a large percentage from India and very small numbers from other nationalities, but that should change. It’s because India has a huge reservoir of talent unlike other countries but nevertheless as we penetrate markets further afield we create local development centres and try and get in local leadership and create a HR framework that suits the local environment. So, globalisation has its challenges for management.
So, how many people from other nationalities do you employ today?
We have about 3.5 per cent today and we hope to grow that percentage faster than the growth in the other 96.5 per cent.
Do you have problems of cultural adjustment?
Yes, there are challenges, because, remember all policies and everything that you do, is subconsciously determined by the people who design the policies; there are so many local nuances, local needs and everybody is learning. You should have an open mindset and if you recognise the need to globalise and accept people from different cultures you are okay.
How are you developing the second rung from your Mysore leadership institute?
We have been successful in creating a second rung of leaders. We have a newly created executive council where four senior people — members of the board — are part of this council. These people are taking additional responsibilities and then we have a unit head who is part of this council; we have used this framework to invest in people and develop this capability; it’s been fairly successful. Has it been a total success? We have to still write the full story.
In IT, leaders identify themselves. We give them more responsibilities and this is not a deliberate act like in other companies, it comes naturally. The industry is young and everybody is a fast tracker. But it has its own repercussions, many people burn out, many leave, there is attrition, much more so than in other industries, and there are people who just cannot take it any more.
What’s the next bastion for the industry?
In the top ten in the world today you could have three Indian companies, perhaps not in revenue terms but in terms of people or consultants; because of our model we get less revenues per person than companies overseas. In the next two years, we should get at least 2-3 players in the top five. And on the business side, the challenge is to build up our end-to-end business services and become trusted advisors. We have the technology and domain expertise, we need to scale it up and expand it dramatically, that’s the big challenge. We need to get more overseas people in the top management, reconfigure the way we run our business.
What about recruitment this year, given the impending recession coming on in the US?
We had said last quarter that we were in line for the hiring for the quarter and now ’08 is over. And, for ’09, we have 18,000 offers already in the market.
If the slowdowns continues, analysts say that the lateral-to-fresher hiring ratio will change as clients may no longer want a low-end service?
We need to understand that the market is constrained by the availability of laterals. Barring application development maintenance there is a shortage of laterals in other areas. Most corporations aspire to go up the value chain for which they have to be more domain intensive, more tech intensive and need more experienced people. It’s not coding work, which means that you should have an appropriate ratio of laterals to freshers. Right now we are at a ratio of 34:66. But when you hire a fresher you are building future capacity, 16 weeks of training, it takes 9-12 months for them to be billable and since attrition levels are higher at this level you need to hire more of them. We find many leaving to do MBA and M.Tech programmes. Companies that have invested in training will be the ones that will be successful.
It’s a weekend but there is no let-up for the indefatigable Director, Human Resources of software major Infosys Technologies Ltd, T.V. Mohandas Pai. Just back from a long trip to the US, Pai is soon after in Chennai to speak at an event organised by this newspaper. It’s a few days before the company’s results for the last quarter of ’07 are to be announced, so Pai is wary of giving away anything pertaining to its business plans saying it’s the quiet period. But ask him about the software industry’s main asset, brainpower, and Pai is at his loquacious best. The New Manager interviewed Pai in the car from the airport to glean his views on a variety of issues that confront Infosys and the industry. Excerpts:
How do you react to the charge by other industries that software is sucking up lots of talent; that students from other disciplines are all heading to software.
It’s true that the IT industry is attracting a lot of good talent, it’s also true that other industries are feeling constrained. It has to do with the culture of Indian industry where for very long they had access to very good people paying very low wages. I remember several years ago, engineers used to get Rs 6,000-7,000. CAs used to get less than a lakh a year and now they get Rs 10 lakh. So, it’s a sea change, which means that talent is getting priced right and you have to compete for it. So each industry has to work on its employee brand and come out with a set of attributes that will attract people and industry has to work with academia to have backward linkages and make sure you put your capabilities in front of potential employees and compete for talent. I think it’s a good thing for the middle-class and a good thing for India.
So, you think employers from other industries complaining about the great software suck-up of talent is unwarranted?
It’s not fair to say it’s unwarranted. But society exists for individual members and not for management of companies; society as a whole is made of individuals like you and me and our interests are paramount to society’s so if someone complains then it’s the wrong thing to do because it will only prove that they are not popular employees. But, yes, as a society we should all accept that we should have adequate talent and enable industry to grow as everything cannot be IT and indeed IT is not the solution to India’s challenges; it’s a small part of the solution. But we need to understand the dynamics of the labour market and come out with appropriate strategies.
For example, the construction industry for very long has not invested in civil engineering in academia. Today, they are paying more money than the IT industry to get good talent; it’s a good thing but beneath all that there is one thing all of us need to do — that is right skilling. For too long Indian industry has had overqualified people doing under skilled jobs.
Now the only solution for India, including IT, is to do right skilling to find out the attributes of job needs and match that with the skills required and find the right kind of people for jobs.
For example, in our BPO industry we had high attrition and our HR head came up with an idea – she said we would find people who were happy doing the job, who were contented and we went to the smaller towns and found a different class of people who were happy doing that job. They have a different view of life and so are their aspirations. You go to an urban, middle-class young man who has passed out of a top city college, his aspirations are totally different. Right skilling is the way out and if we sit down and do that, then there is enough talent for everybody.
The rapid growth of the IT industry has seen younger people assume huge responsibilities and roles…
We have been pushing young people one or two rungs up but this could have its repercussions because if you push young people up too fast they could falter somewhere up the line. It takes time to handle people, to develop managerial skills and if you push them up too fast, they find that they don’t fit and burn out. I’ve seen it happen in the IT industry, because not everybody who is pushed up fast makes it to the top. People need time to grow. In earlier generations, there was stability. Once you promote people every two years, give them more responsibility, stress levels also go up; not everybody has the capability and not everyone can grow at the same pace.
With the recession in the US, what are the overall indications for IT hiring for the year?
It is part of the global industry which sees up and downs. If things are growing well in the West, which is our major market, then you will see higher growth. But if things don’t go well, they want to cut costs and come to us to outsource more work. So, the Indian IT industry is fairly well positioned but how long will there be a gap between the global economy cooling down and more outsourcing work coming to India – that’s the challenge.
You employ 89,000 people across 23 countries, 60 nationalities, how do you manage this diversity?
We have a distributed leadership model and we try to create a common value system across the enterprise. We are also trying to create a common culture. But it’s going to be very difficult to have a common culture that binds the organisation across geographies and at the same time have a culture that is unique to the location where we are situated, because in every location we need to have local talent coming to us. Right now, the Indian IT industry is configured with a large percentage from India and very small numbers from other nationalities, but that should change. It’s because India has a huge reservoir of talent unlike other countries but nevertheless as we penetrate markets further afield we create local development centres and try and get in local leadership and create a HR framework that suits the local environment. So, globalisation has its challenges for management.
So, how many people from other nationalities do you employ today?
We have about 3.5 per cent today and we hope to grow that percentage faster than the growth in the other 96.5 per cent.
Do you have problems of cultural adjustment?
Yes, there are challenges, because, remember all policies and everything that you do, is subconsciously determined by the people who design the policies; there are so many local nuances, local needs and everybody is learning. You should have an open mindset and if you recognise the need to globalise and accept people from different cultures you are okay.
How are you developing the second rung from your Mysore leadership institute?
We have been successful in creating a second rung of leaders. We have a newly created executive council where four senior people — members of the board — are part of this council. These people are taking additional responsibilities and then we have a unit head who is part of this council; we have used this framework to invest in people and develop this capability; it’s been fairly successful. Has it been a total success? We have to still write the full story.
In IT, leaders identify themselves. We give them more responsibilities and this is not a deliberate act like in other companies, it comes naturally. The industry is young and everybody is a fast tracker. But it has its own repercussions, many people burn out, many leave, there is attrition, much more so than in other industries, and there are people who just cannot take it any more.
What’s the next bastion for the industry?
In the top ten in the world today you could have three Indian companies, perhaps not in revenue terms but in terms of people or consultants; because of our model we get less revenues per person than companies overseas. In the next two years, we should get at least 2-3 players in the top five. And on the business side, the challenge is to build up our end-to-end business services and become trusted advisors. We have the technology and domain expertise, we need to scale it up and expand it dramatically, that’s the big challenge. We need to get more overseas people in the top management, reconfigure the way we run our business.
What about recruitment this year, given the impending recession coming on in the US?
We had said last quarter that we were in line for the hiring for the quarter and now ’08 is over. And, for ’09, we have 18,000 offers already in the market.
If the slowdowns continues, analysts say that the lateral-to-fresher hiring ratio will change as clients may no longer want a low-end service?
We need to understand that the market is constrained by the availability of laterals. Barring application development maintenance there is a shortage of laterals in other areas. Most corporations aspire to go up the value chain for which they have to be more domain intensive, more tech intensive and need more experienced people. It’s not coding work, which means that you should have an appropriate ratio of laterals to freshers. Right now we are at a ratio of 34:66. But when you hire a fresher you are building future capacity, 16 weeks of training, it takes 9-12 months for them to be billable and since attrition levels are higher at this level you need to hire more of them. We find many leaving to do MBA and M.Tech programmes. Companies that have invested in training will be the ones that will be successful.
Friday, October 23, 2009
Human Resource Management be considered an issue of strategic importance.
In the epoch of various occurrences such as globalization, industrialization and technological advancement, the international workplace including its particular areas and systems is overly affected by the fundamental processes manifested and brought about by these occurrences. Among the observable area and system that was affected by such emerging conditions particularly in the business world are the human resources and its management. Initially, human resource management (HRM) is one of the most significant attribute of business organization. There are many useful applications of HRM in a profit or non-profit organization.
This paper provides answers to the question - why should human resource management be considered an issue of strategic importance? This essay also argues that HRM maintains an acceptable working environment, HRM regulates management and workforce relationship, HRM plays a great role in management planning, and HRM contributes to employee effectiveness and overall organizational performance and development. Also, it shows that effective implementation of HR functions is an important task that the management and HR managers as well as staff should consider and pay attention with.
This paper provides answers to the question - why should human resource management be considered an issue of strategic importance? This essay also argues that HRM maintains an acceptable working environment, HRM regulates management and workforce relationship, HRM plays a great role in management planning, and HRM contributes to employee effectiveness and overall organizational performance and development. Also, it shows that effective implementation of HR functions is an important task that the management and HR managers as well as staff should consider and pay attention with.
Wednesday, October 14, 2009
HR will Be More Business-Focused and Less Dependent On Internal IT: Recent Trend in HR
HR will Be More Business-Focused and Less Dependent On Internal IT
The traditional HR shop has been heavily focused on managing records in monolithic systems, processing routine transactions, and dealing with compliance and legal issues. This type of HR function has been viewed by top management as a candidate for outsourcing, along with other back-office tasks. The more enlightened HR organization is focused on talent as a strategic resource to make the overall business successful. HR professionals are acquiring more business acumen as HR processes and talent initiatives are becoming more integrated with the day-to-day operations of the lines of business. On the technology front, HR is becoming less technophobic, more self-sufficient, and less dependent on corporate IT. HRM applications are being designed to
be owned and managed by the business stakeholders while also being deployed via a vendormanaged, SaaS model. These parallel developments signal the ascendancy of the HR function as a more prominent player in strategic business growth.
The traditional HR shop has been heavily focused on managing records in monolithic systems, processing routine transactions, and dealing with compliance and legal issues. This type of HR function has been viewed by top management as a candidate for outsourcing, along with other back-office tasks. The more enlightened HR organization is focused on talent as a strategic resource to make the overall business successful. HR professionals are acquiring more business acumen as HR processes and talent initiatives are becoming more integrated with the day-to-day operations of the lines of business. On the technology front, HR is becoming less technophobic, more self-sufficient, and less dependent on corporate IT. HRM applications are being designed to
be owned and managed by the business stakeholders while also being deployed via a vendormanaged, SaaS model. These parallel developments signal the ascendancy of the HR function as a more prominent player in strategic business growth.
Tuesday, October 13, 2009
KEY AREA FOR FOCUS IN 2009, HRM
For Business Process & Applications Professionals
Human resource management (HRM) will be a key area of focus in 2009 as companies and government organizations put in place strategies to cope with the economic crisis and recovery. The so called “war for talent” is on the backburner as the focus shifts to hiring freezes, benefits and compensation cost management, and workforce reductions in the hardest-hit segments. HRM technology solutions can help savvy human resources (HR) professionals strategically manage through the crisis and prepare as the climate shifts to the upside. Trends that we will follow in 2009 include managing and developing talent, embracing HRM analytics, Web 2.0 adoption, and HR technology strategy.
Human resource management (HRM) will be a key area of focus in 2009 as companies and government organizations put in place strategies to cope with the economic crisis and recovery. The so called “war for talent” is on the backburner as the focus shifts to hiring freezes, benefits and compensation cost management, and workforce reductions in the hardest-hit segments. HRM technology solutions can help savvy human resources (HR) professionals strategically manage through the crisis and prepare as the climate shifts to the upside. Trends that we will follow in 2009 include managing and developing talent, embracing HRM analytics, Web 2.0 adoption, and HR technology strategy.
Saturday, October 10, 2009
CHANGEING TRENDS IN HRM
Human resource management, if we see it from definition perspective “it is a process of bringing people and organizations together so that the goals of each others are met”.If we see in practical situation the above definition its just one side of a coin which has limited HRM involvement but HRM today is a different story, it have changed the way we work, and also it helps an organization to survive in recessionary period. Managing and attracting the human resource in today’s time is very difficult task. The role of HR manager has changed a lot (Dancing differently on changing tunes of life) from being protector and screener to the role of Savior who acts as planner and change agent affecting bottom of the pyramid where it is blue collar workers & at the Top & Middle level executives. The trends in human resource industry are dynamic in nature which contributes towards to achievement of organization goals. Over the years, highly skilled and knowledge based jobs have increased while low skilled jobs are decreasing. This calls for skill mapping through proper HRM initiatives.Change is inevitable as said and that’s what Indian organizations are witnessing in management cultures, systems and working style. Alignment with global companies has forced Indian organization accept and incorporate change in every day life which makes role of HRM all the more important.Some of the recent changes are as follows:• The policies of many companies have become people centric, traditionally the policies mainly focused on achievement of organizational goals showing negligence towards the human resource.• Attracting and retaining of human resource has become difficult as loyalty factor is losing its shine, today HR personnel have to motivate and design healthy career road map to make them stay in the company.• Human Resource Outsourcing is the new name in the industry to replace the redundant traditional HR department. Many HR outsourcing companies in India are already established and some are coming up to support increasing demand of corporate India.• With the increase of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore organizations are also required to work out a retention strategy for the existing skilled manpower. HR managers today are focusing on policies (trust, openness & equality), Motivation, Relations. Due to new trends in HR the manager should treat people as resources, reward them equitably and integrate their goals with that of the organizational goals through suitable HR policies.
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