an introduction to indian talent management global talent management institute, seoul, korea june...
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An Introduction to Indian Talent Management
Global Talent Management Institute, Seoul, KoreaJune 2012
Sentient June 2012
Snapshot
Demographics Talent Availability Engage and Develop Attrition and Retention HR Service Delivery Indian Talent – The Edge
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DEMOGRAPHICS
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India Overview
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*Source: Census 2001
India #3 – Agricultural India• 300 M adults• Mostly involved in farming; • 50 M literate; 250 M illiterate• Vote bank of India • Heavy migration towards urban regions
India #1 – Educated India• 100 M adults • Professionals, Business people, Govt. officers • Mostly based in Urban areas
India #2 – Middle India• 200 M adults• Semi-educated; mostly living in urban areas• Semi-skilled labor; Manufacturing technician; Armed forces; Port workers
India #4 – Young India• 300 M under the age of 18• Youngest country in the world• Have exposure to urban life and education• Huge potential to add to the bank of IT professionals
Multiple Indias
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Favorable age split of the population
64.9 % of India’s population between the ages 15-64, and more than half below the age of 25.
In contrast, countries including the US, Europe, Japan and China have a more aged population with dependency ratios likely to increase over the same period.
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Talent Availability
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Academic Infrastructure 347 institutes of higher education 16,885 colleges Enrollment of 9.9 million 495,000 technical graduates 2.3 million other graduates 300,000 post-graduates each year English being the accepted medium of instruction, a
large proportion of the graduate pool is proficient in English.
*According to data released by the Department of Secondary and Higher Education, Ministry of Human Resource Development, and Government Of India
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India Skill Availability
Type of Institutes Intake Institutes
Degree 582,000 1,522
Diploma 220,947 1,231
MCA 37,005 797
Total 529,671 3,086
• Second highest Availability of English speaking Graduates
• Several students from other faculties and vocational colleges joining Hi-Tech (Aptech – 1100 centers; NIIT – 3000 centers; 400K students enrolled)
• Plans to meet demand of upto 2M professionals by 2008
• Over 5,000 engineers from US returning with downturn in economy
•Starting to influence educational institutes thru strategic partnering
Tier I:6 IITs, 2 IIITs, 6 IIMs, IISc
Tier II:17 RECs, 33 others
Tier III:191 Govt Funded 520 Self Financed
Availability of Hi-Tech students(Source: TaskForce on HRD in IT - Govt. of
India, Dec 2000)
Management Development
Entry
India Skill Availability
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Languages
English enjoys associate status but is the most important language for national, political, and commercial communication.
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Indian Engineering Talent Supply
2003-04 2004-05 2005-06F 2006-07 F 2007-08 F
No of engineering graduates
316,000 365,000 441,000 501,000 536,000
Degree (four years) 139,000 170,000 222,000 270,000 290,000
Diploma & MCA (three years)
177,000 195,000 219,000 231,000 246,000
*No of IT professionals
179,000 201,000 246,000 280,000 303,000
Engineering IT graduates (degree)
84,000 102,000 133,000 162,000 180,000
Engineering IT graduates (diploma)
95,000 99,000 113,000 118,000 123,000
* IT professionals include Comp Science, Electronic and Telecom professionals.
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……….Indian Talent Growth
Potential surplus population in working age group (2020)
Labour Shortages & Supply Sources
Note: Potential surplus is calculated keeping the ratio of working population (age group 15 – 59) to total population constant; Source: U.S. Bureau of the Census International Data Base; BCG Analysis
47Mn
19Mn 7
Mn
3Mn
5Mn
3Mn
India
Bangladesh
PakistanIran
Brazil
Mexico(1)
Philippines
5Mn
4Mn
Vietnam
2Mn
Turkey
-10Mn
China
-6Mn
Russia
5Mn
Indonesia
1Mn
Malaysia
0MnIreland
Israel0Mn
Russia and China will
compete in specific
segments
Iraq2Mn
-1Mn
CzechRepublic
4Mn
Egypt
-17M
nUS
-2 Mn
UK-2 MnItaly
-3 Mn
France
-9 Mn Japan
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Recruiting – new look Recruiting high-priority Recruiting strategies are changing
More money is being spent on all aspects of recruiting One firm uses local TV advertising to “prep” market for recruiting efforts Recruiters can no longer just “fill vacancies,” must be part of project
planning Recruiting college students from outside traditional disciplines is now
common Less-experienced recruits implies more training by employers
What attracts top software talent? It’s not just salaries: Challenging, exciting projects “Toys:” high-tech development environment Top-tier colleagues Tangible results of work Contribution to what matters in the corporate culture, e.g., bottom line Appreciation, recognition and respect
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Engage and Develop
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Developing talent Active career development initiatives - a key retention tool. The impact of career development/ succession planning programs can
be seen through the productivity indicator, engagement surveys and reduction in attrition rate.
Career Planning might be through Promotion Training Job rotation Job enlargement Succession planning Mentoring Assessment and development centres
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Skill Development Opportunities
Only 30% of the graduates are employable (NASSCOM survey).
Our academic training is not geared to help our graduates become job-ready.
NASSCOM in a BPO summit has said that despite the economic slowdown, Indian IT sector is still expected to grow 16-18 per cent by 2012.
Availability of Leaders, Managers, Leadership and Management skills being keenly felt
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Talent management Challenges
Employees have increasingly become more demanding and want to see a growth path and career plan.
It is therefore important to Set a robust Performance Management system in place.
Identifying the super performers. Rewarding them with role enhancements, role changes, monetary and non monetary
Attracting and retaining enough employees at all levels to meet the needs of organic and inorganic growth.
Developing a robust leadership pipeline .
Transferring key knowledge and relationships .
Rounding out the capabilities of hires who lack the breadth of necessary for global leadership.
While many have forgotten the term “War for Talent”, the phenomenon is slowly re-emerging. “A study by Accenture has found that more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent. In today’s global and highly competitive economy, the war for talent is now global, not local. The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year.
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Maintaining Quality Standards
Of the 42 organizations worldwide that have reached Level 5 on the CMM scale, 25 are based in India, according to the SEI.
In a recent study, McKinsey found that Indian firms ranked at CMM Level 5 generated 96% quality improvements and 75% productivity gains, compared with those organizations at CMM Level 2, where U.S. firms are typically ranked.
Skill and knowledge level of employees working in this Quality conscious environment also needs to be continually developed\upgraded.
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Attrition
Attrition rates vary from 10% to 60% in the technology and high growth areas
Opportunities for employees are many and employees switch jobs much more frequently than before.
An Organization needs to retain its existing talent and attract new talent and build buffer.
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Innovative Retention With rising Attrition rates , Money is not enough to retain talent. Increasing base pay was cited by 41 percent of respondents, while awarding bonuses
was mentioned by 31 percent of the execs. What matters
training
Career development opportunities (63 percent)
Offering a flexible schedule (47 percent).
Understanding of (and involvement in) the direction and values of the organization.
*In a recent survey conducted by Robert Half Technology.
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HR Service Delivery
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HR Service Delivery Forrester Research estimates that the average HR
department devotes 60% to 80% of its time to the administration involved in benefits, HR and payroll management.
A robust Software will lead to an average of 40- 50% reduction in this administrationtime.
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HR Service delivery Payroll, induction, exits, documentation, travel, visa,
employee information, leave, attendance, insurance, statutory adherence, employee background verifications, Communication modes – like the Intranet etc
Enabling the required Technology adoption Reducing time/effort spent. Making the processing more
efficient. Handling global teams seamlessly and meeting SLAs. Building a metrics driven system Building and ensuring a secure workplace Build Transparency
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Indian Talent – The Edge
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Growth projected in IT/ITES
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The industry continues to be a net employment generator - expected to add 230,000 jobs in FY2012, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people India’s talent base expanding rapidly with an annual addition of nearly 4.4 million graduates and postgraduates in FY2012.
The IT/ITeS industries have added 7.96 lakh jobs in the Indian economy during the one year period ending September 2011.
India scores high on loyaltyLow Disloyalty
35
31
35 35
29
202224262830323436
Global Americas Asia Pacific Europe&West Asia
India
Regions
perc
enta
ge
High Loyalty
44 46 44 43
54
202530354045505560
Global Americas Asia Pacific Europe&West Asia
India
Regions
• Employees in India more likely to speak well of their companies and be enthusiastic about their work • Employees working for some of the world’s largest corporations are more likely to be ambassadors.
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0
500
1,000
1,500
2,000
2,500
0 5,000 10,000 15,000 20,000 25,000
India is the largest opportunityEnglish-speaking graduates and postgraduatesThousands PA
Annual wage costsUS$ PA
Ireland
India
Philippines
ChinaMalaysiaMexico
Egypt
Massive skilled labor surplus
U.S.
Caribbean**
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Current Status of High-end services
Most such services are non-synchronous. “Time difference” provides a distinct advantage. E.g., Professionals in India can use all the “unused computing and communicating resources in US” to perform simulations!!
Current applications include almost all high end services in the engineering domain; almost none yet in data analytics, remote education, market research etc.
Some Engineering companies have started using India as a base for high-end engineering work: Bechtel; about 700 engineers Flour Daniels; about 200 engineers GE R&D center; about 1300 professionals Pratt & Whitney; about 500 professionals
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Major companies with large investments Cisco, IBM, GE, Motorola, Sun, Oracle, HP, Microsoft, Dell, etc…
Working in the area of - IC design, Communication S/W, System S/W, Application S/W and services; databases, CRM, Supply chain etc…
Full service Local Software companies • Infosys, Wipro, Satyam
Govt • Committed to grow the IT sector further; Focus on infrastructure - roads; WW visibility • 90 % Tax Holiday by Govt of India; No import duties• Stable Government; partnerships between Govt and Industry associations are strong;
Encouraging MNC investments Bangalore – A center for high technology
• Integrated Chip Design – TI, Siemens, Philips, Synopsis• Communication Software – Lucent, Nortel, Motorola, Cisco, Siemens• System Software – Oracle, Novell, Sun Microsystems, HP, GE
• Biotechnology & Life Sciences
Beyond IT & ITES…
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India Environment
• Economic Growth …8.5%--9.5% … less than what is needed … prognosis more of the same
• Privatization …telecom and some momentum
• Infrastructure development … insufficient power, roads, airports and seaports … prognosis mixed
• Tax policy … slow progress, some slippage
• Companies Act, Labor law reform, Land use regulation, … still waiting
• Tensions with Pakistan eased
The Indian Environment
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INDIA’S ADVANTAGE FOR PROVIDING HIGH-END SERVICES
Engineering SchoolsTier 1, 30 schools graduating the top 2% engineers (4000 to 6000 per
year)Include the Indian Institutes of Technology (Joint Entrance Exam
excludes over 99% students), IISc, designated Regional Engineering Colleges and University Institutions
Schools providing MBAsTier 1, approximately 15 schools, graduating the top 3-4% (about 3000
MBAs)Include the Indian Institutes of Management (about 0.5% admission
rate), Indian School of Business, and reputed universities
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...AND ITS OFFSHORE ECONOMICS ARE COMPARABLE TO THOSE OF SOFTWARE
Revenue/Employee1
$ ’000
Avg. offshore salary
$ ’000Remote n/w consulting and mgmt
Finance and accounting
Website services
HR services
Software
Data search, integration & analysis
Customer interaction
E-Learning
Animation
Market Research
Translation, Transcription & localisation
Engineering and design
1Including onsite team2High due to higher telecom costs in places like India3High due to ‘content’ cost remaining similar, 4 $6,000 today growing @ 8% $ terms, i.e., ~15% rupee terms
Average
2008 aspiration
Source: Mckinsey studySentient June 2012
OPPORTUNITIES THAT EXIST OVER MULTIPLE GROWTH HORIZONS
Established opportunities
Cust. interaction services
Finance and accounting serv.
Engineering and design services
HR services
Animation
Translation, transcription and localisation
Rapidly evolving opportunities
Latent opportunities
Network consulting and management
Data search, integration and analysis
Market research services
Website services
Remote education
Logistics management
Consulting services
Monitoring services
Legal advice
Distributed product development
Secretarial services
Higher value added, higher
complexity
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