Workforce Planning

India shines Shalini Shukla 18 Apr 2012 In the last two decades, India has gone from being one of the least globalised economies in the world to one of the most dependent on international commerce. “Our markets are more open, we enjoy a wider range of consumer items than ever, and those who go abroad (far more than ever before) finance their travel expenses with foreign exchange,” says Shashi Tharoor, elected member of the Indian Parliament from the Thiruvananthapuram constituency in Kerala and former Minister of State for External Affairs. Business process outsourcing has (also) tied large numbers of Indians to foreign work environments and business partners. ” This year, India is poised to over take Japan as the third largest economy in the world, based on purchasing power parity. James Agarwal, consulting director and head – India, BTI Consultants, a part of Kelly Services, says that main growth drivers seem to be a variety of internal and external factors, including investment-friendly public policies and regulations. India has also successfully raised its aggregate savings rate to levels that would allow sustained high levels of domestic capital formation, in turn helping high growth,” says Agarwal. While India’s economy is one of the world’s most dynamic, corruption, sloppy standards, a lack of decent staff and too much red tape are common gripes amongst businesses. Prince Augustine, EVP – Human Capital at Mahindra & Mahindra, says there is much to be improved. “The potential of India has not been fully tapped in terms of its resources and people capability,” he says. There is ample scope for growth looking at the vast expanse of the country, its population and rich cultural heritage. ” The country’s labour force is one to be reckoned with. It boasts the world’s largest labour pool, with 270 million entering the workforce over the next 20 years, says McKinsey & Company. It also has the world’s youngest workforce, with 70% of the population falling under the age of 35, according to the latest Indian Census. “By and large, people (in India) are hard-working, and management is participative, forward-looking and quite performance-oriented,” says Augustine.
Agarwal agrees and says work culture in India requires one to be acclimatised to the behavioural as well as cultural variations of the country. “For instance, here, people consider their family when accepting job proposals, although Gen X is emulating the west gradually,” he says. “Also, workers in India have a strict work ethic; they do not mind even working on weekends if the demands are such, unlike most other countries where weekends are almost exclusively considered personal time. However, Agarwal added that Indian workers can be rather particular about certain festivals which cannot be ignored, such as Diwali. Gender equality While India has certainly done some things right on the business front to achieve double-digit economic growth, gender equality in the country still has a long way to go before it comes even close to levels of other economic giants. According to the Gender Sensitivity Benchmark for Asia 2011 report, India is the worst among six top Asian economies when it comes to the representation of women in the workplace at the junior- and middle-level positions.
Indian multinational companies studied had the lowest number of women employed, at 24. 43% of the total workforce in India. Agarwal laments that despite the fact that recent times have witnessed a boost in the status of women, such discrimination still seems to exist. “Discrimination here relates to matters like pay, conditions pre- and post-employment, promotions and other opportunity matters,” he says. “For a developing country like India, gender equality is still a long way off, coupled with unprecedented efforts to grant women an equal status and thereby ensure her development. There is a silver lining though. In spite of all the challenges, India has shown and worked on progressive policies. Today, most of India’s companies are committed to providing equal employment opportunities for all. Employers are increasingly realising the value of trained human resource, especially women in India. Diversity hiring intent among leading companies has gone up by almost 500% since 2010, according to a study by the Chennai-based FLEXI Careers India, which sources only women executives. Some organisations are changing their HR policies to retain their valuable employees,” says Agarwal. “There are companies which are providing flexibility so that female employees at various life stages could benefit from these policies, like working from a different city, sabbatical from corporate life, and extended maternity leave. ” A host of companies, like Godrej Industries, Pepsico, Genpact, Kraft, P&G, Deutsche Bank and others, have all stepped up their gender diversity hiring recently.

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Progressive companies such as Mahindra & Mahindra believe in equal opportunity and do not discriminate in any form. “Our philosophy is that the right person should be selected for the job. We have an evolutionary approach to diversity as the working population base needs to be aligned to ensure that there is a rich supply of employable workforce,” says Augustine. “In the manufacturing sector primarily in engineering, although the number of woman employees is limited, we have good representation. IBM is another company that’s been championing diversity in the workplace. Three or four times a year, a team from IBM goes on a recruitment drive with a difference – they screen and select only female employees. Conservative estimates suggest IBM has added well over 2,000 women in two years, with the proportion of female workers increasing from 24% of the workforce to 26%. “We keep trying to find new ways of hiring women,” Kalpana Veeraraghavan, diversity manager for India and South Asia at IBM tells The Economist. This is not just about filling a talent crunch. There is a strong correlation between success in the marketplace and having a diverse workforce. ” Other examples include Genpact, where the overall ratio of men to women is 60:40; Kotak Mahindra Bank, where two out of 10 employees are women; and KPMG, which has increased its headcount for female employees by 75% as compared to its figures for 2010. Schneider Electric has also bumped up its percentage of women in the workforce from just 9% in 2009 to 20% in 2011. Money talks
Companies in India are cautious, but also confident of long-term performance this year. Organisations have emerged in a mature way post-downturn with a stronger compensation philosophy in place, designed around ‘pay for performance’ and a comprehensive view for long-term sustainability. According to the Hay Group Compensation & Benefits Report 2011, the country witnessed an actual average salary increase of 11% in 2011 and is optimistic about seeing double-digit growth this year at an average of 12% across levels.
Sridhar Ganesan, managing consultant and Rewards Practice Leader, Hay Group India, says, “in a short p of the last five years, the Indian employment market has witnessed a range of behaviours with employers on a hiring spree and also in rightsizing mode. The market is now stabilising and maturing to the next level of employer and employee relationships. ” Graduate salaries are also picking up with monthly salaries touching Rs 40,000 (US$758) in industries including engineering, sales, marketing and even in support functions such as finance and HR.
Salaries are going up at a good time as India experiences its highest inflation rates yet, with the annual inflation rate for the country accelerating to a 13-month high of 9. 78% in August 2011. For instance, Mahindra & Mahindra does regular Mark-to-Market comparisons and appropriate changes are made in compensation based on market realities. “Employees are aligned to these realities,” says Augustine. Ganesan also observed that there is a constant reinforcement of pay for performance. Bonus figures have been continuously showing an increasing trend year-on-year, as organisations now believe in pay for performance with controlled merit increments. ” More organisations have certainly designed variable pay to induce a performance-driven culture. The target bonus percentage ranges between 8% and 44% of base salary at junior management levels, 11–63% of base salary at middle management, and 15–75% of base salary at senior management levels. The Hay Group report found that around 79% of the organisations participating paid some form of bonus in the last 12 months.
When it comes to bonuses, Diwali is the time when employees expect them in India. According to The Economic Times, Diwali bonuses range from 10% to over 200% of basic pay. Consumer durables companies and IT and business process outsourcing companies are the most generous, with the former giving out 20–250% of basic pay during the festive season and the latter shelling out 80–100% of basic wages as bonuses. Bonuses in the financial services sector range from more conservative figures of 16–50% while those in the automobile industry fluctuate between 10% and 25%.
The retail sector can give out anywhere from 9% to 60% of basic pay in bonus pay-outs during the festive season. LG Electronics India is a case in point. The consumer durables company gives out a total of 200–700% of basic salaries to its 4,500 employees annually through six bonuses, including two half-yearly performance incentives in January and July, a Diwali bonus, a post-Diwali bonus, an LG birthday bonus in May and a retention bonus to employees who have completed two years of service at LG.
The retention bonus is a maximum of 400% of an employee’s basic monthly salary and is paid in three instalments in every consecutive year. Talent development There is no doubt that India’s vast manpower pool has played a vital role in its economic success story. It is increasingly obvious that the success of Indian companies is not just based on superior access to raw materials or technology or patents, but also fundamentally upon human skills.
The major challenge, though, seems to be the issue of upgrading skill sets of this human resource through training & development in the face of high attrition and competition, says Agarwal. “Indian companies are recognising their responsibilities to enhance the employee’s opportunity to develop skills and abilities for full performance within the position and for career advancement,” he says. The India that is going global is also a remarkably young country. “India’s youth population remains an under-utilised economic asset,” says Tharoor. Census figures show that nearly one-fifth of India belongs to the 15–24 year age group.
Each year, the country will add around five million young adults in that age group – five million potentially productive workers providing India with the fuel it needs to drive productivity higher, powering its economy even further. The education system is working to create a steady stream of young talent. According to National Association of Software and Services Companies (NASSCOM), each year over three million graduates and post-graduates are added to the Indian workforce. However, there is still room for improvement in terms of developing this talent. Today’s new graduates seem to be grossly lacking in all-round skills – something that’s expected, given their formal education,” says Agarwal. Augustine agrees, saying some big concerns include the employability of fresh graduates and how aligned these graduates are to business reality. Still, many reforms are underway, from governance structure of higher education and decentralisation, to major investments in faculty development, for both private and public institutions. “A lot of effort is being put into expanding tertiary education, especially for low- and middle-income students,” says Agarwal.
Corporates are also doing their business to improve the quality of education and hence increase the number of employable talent. For instance, Wipro works closely with the Indian school and college system through the Wipro Applying Thought in Schools (WATIS) programme. The strategy revolves around systemic education reform and transforming the current nature of schools and pedagogy, it works through building capacity of social sector organisations working in the space of education and directly with schools. The WATIS programme has engaged with over 2,000 schools and 30 social organisations across 17 states of India.
Mission10X Learning Approach (MxLA) is another program by Wipro that focuses on improving the potential for employability of engineering graduates in India. It does this through direct engagement with engineering colleges and faculty capacity development. The program reaches out to over 300 colleges and has trained 10,000 engineering college faculty members. Aditya Birla Group offers Management Trainee Programmes through which the company recruits exceptional management graduates from the best business schools in the country.
Siemens India’s one year training programme sees newly recruited management trainees undergo a rigorous five-week classroom training, six stints of three weeks each in Sales, Operations, Finance, HR and Corporate Strategy, and a 26-week project within a business unit or corporate function. The synergy between the public and private partnership with a strong focus on key HR programmes such as talent management and employee capability-building, coupled with attraction and retention will be pivotal as India continues its journey of rapid growth.
Laws to keep in mind when doing business in India+       According to James Agarwal, consulting director and head – India, BTI Consultants, some important Labour Acts which are applicable for carrying out business in India are:+       Employees’ Provident Fund and Miscellaneous Provisions Act+       Employees’ State Insurance Act+       Workmen’s Compensation Act+       Maternity Benefit Act+       Factories Act+       Minimum Wages Act+       Payment of Wages Act|
JugaadA Hindi slang word, jugaad (pronounced ‘joo-gaardh’) translates to an improvisational style of innovation that’s driven by scarce resources – a case of ‘get it done, by hook or by crook’. Just as Guanxi describes the central idea in Chinese society, jugaad is almost a way of life in India. Most workers in India embody this intrinsic trait of jugaad in their day-to-day work, allowing them to creatively come up with products and services that are more economical both for the supplier and consumer, and maximises resources for a company and its stakeholders in as little time as possible. Resolutions for 2012The English daily, Mumbai Mirror, sums up some of the biggest workplace resolutions that people in all industries will try to keep in 2012:+       Encourage leadership – This comes in handy as companies transition from closed to open source leadership formats this year+       Monitor workplace gossip – Managing office gossip is important in keeping major conflicts at bay+       Strike a connect – Know the ‘why’ and then focus on the task, helping to avoid miscommunication, politicking, etc…|
POISED TO: Cool, calm, collected or waiting at attention: as in poised to strike. purchasing power parity : aggregate:accumulated, added, amassed, assembled,collected, collective, combined, composite,corporate, cumulative, heaped, mixed, piled,total

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