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Business News/ Companies / People/  India is a good example of how businesses are aligned to HR: Aon Hewitt’s Pete Sanborn
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India is a good example of how businesses are aligned to HR: Aon Hewitt’s Pete Sanborn

Sanborn talks in an interview about how Indian leaders are poised to change the way they do business with the change in leadership of the country

Pete Sanborn, co-president of global HR consultancy firm Aon Hewitt’s Performance, Reward and Talent Practice. Photo: Abhijit Bhatlekar/MintPremium
Pete Sanborn, co-president of global HR consultancy firm Aon Hewitt’s Performance, Reward and Talent Practice. Photo: Abhijit Bhatlekar/Mint

India had progressed faster in the area of human resources (HR) compared with most other emerging economies, says Pete Sanborn, co-president of global HR consultancy firm Aon Hewitt’s Performance, Reward and Talent Practice, who has over 20 years of experience in HR consulting, client relationship management, and outsourcing. He spoke in an interview on how Indian leaders are poised to change the way they do business with the change in leadership of the country, and on how businesses that are transitioning between leaders are better off promoting internal candidates for the top job. Edited excerpts:

How critical are the 2014 elections in India from an HR perspective? Can a change in political leadership change the way companies work?

I have seen changes in leadership across the world have implications on companies in terms of growth expectations, around taxation, which impacts business strategy and influences the actions and behaviour of the leaders of companies. In the US, when Barack Obama came in, a lot of focus was on what the major legislative changes would be; and the healthcare reform has been a significant issue for companies and leaders in terms of their business and HR strategy. For India, the perception of how political leaders will act will determine whether companies become more conservative or aggressive from a growth standpoint and how it will impact employment depends on the political environment.

Is India staring at a problem of underemployment for its large number of graduates?

It can be a big challenge. In southern Europe, you have very high unemployment rate in countries like Italy, France, Spain and Portugal, where you have people with college degrees working as waiters and waitresses, making little money as there is not enough demand within the country, and on top of that they have skills that are not particularly in demand. China has a much more planned economy, where there is centralized planning between universities and companies, which decide on the number of graduates introduced to the workforce every year. In developing economies, skills by themselves are not enough, but also the idea of preparing them to be good employees, in addition to having the right skills, is important.

How aligned are Indian businesses with HR?

India, where the primary asset is human capital, is a good example of how businesses are aligned to HR.

I have seen India progress faster in HR function than all other developing countries, including China. That is because India is driven by human capital. With large services, solutions and technology sector, it is critical to have a strategy to manage talent and develop critical capabilities of the workforce. It also helps that India has better professional education in HR than any of the other countries and may be just behind the US for having some of the best programmes for HR professionals.

What are the challenges for a company that is moving from being headed by a founder-CEO to a non-founder CEO?

There is a big difference in the way a company operates with these two kinds of CEOs. When there is a founder-CEO, so much of the company is about them, their values, and their passion. If you look at Apple Inc., so much of the company was based on Steve Jobs and his passion for simplicity and innovation that it is hard to replicate that. It will be a change, and how a company navigates that change is important. Having a plan on what they want to retain and what they want changed is critical. The transition from a founder-CEO to a non-founder CEO works best when you have a founder that recognizes that there is a need for a different type of leader and is supportive of that.

What works better in the hunt for the next CEO, promoting internal or external candidates?

We run a study called Top Companies for Leaders, and the successful companies are those which have a strong pipeline of internal leaders to step in. There are times when there is a significant change in strategy, when the best practice would be to bring an outsider, but those events are rare; 75% of the time, the best opportunity for the company is to have a CEO who was developed internally.

What are India’s HR-related challenges?

In my observation, the real focus in India is on working for the large companies as there is a certain status associated with that. But there is also good talent that needs to be going to the start-up companies, where there is innovation to beat the rest of the world in terms of economic activity that tends to come harder in large companies. In US, one of the key drivers for success has been entrepreneurialism.

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Published: 24 Apr 2014, 05:22 PM IST
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