It is often said that India is faced with a “talent paradox”. While jobs are growing at a faster rate than the population, unemployment is also growing. The dual problem of unemployment and talent scarcity presents governments and employers with a human resource paradox: tackling a talent shortage in the midst of plenty.
Illustration: Jayachandran / Mint
Much has been written about India’s demographic dividend—a rise in the rate of economic growth due to a rising share of working-age people in the population. India has one of the youngest populations in the world. The working-age population grew from around 593 million in 2001 to 671 million in 2006, increasing by an average of 15 million a year.
Yet, while demographics indicate a healthy supply of working-age people in India, there exists a significant skill deficit. This talent shortage stems from employability practices that are often focused on simply conferring qualifications on individuals while the ability to perform a job or contribute in the workplace is seldom taught. The quality of education has also been a challenge with understaffed schools and high student-teacher ratios, especially in rural areas.
While the downturn has put the brakes on the rapidly growing demand for talent in India, there are still a number of emerging industries that continue to spur demand for new skills. The Indian insurance industry, for example, will need almost four million sales professionals (agents and company sales force) over the next three-five years. And organized healthcare and retail are sectors simmering for a take-off.
In this context, the ability to identify the right sources of talent and acquire that talent cost-effectively can be a source of tremendous competitive advantage for businesses. Recent research and our experiences with Indian companies point to many innovative strategies.
A forward-looking strategy is to develop talent in those Indian states that will supply a significant portion of the national workforce in the future. According to research conducted by Accenture India to analyse the talent- supply landscape of India, only four states—Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan, states with the least developed infrastructure and economies—will supply the largest proportion of the additional workforce by 2026, at least 60% of the projected 175 million. This has tremendous relevance, not only for governments and policymakers, but also for businesses that can source from these lower-cost talent pools by investing in advanced educational and training infrastructures in these states.
Some organizations are undertaking programmes to train the workforce themselves. For example, a leading metals conglomerate determined that it would need significant captive power capacities to support its exponential growth aspirations, but would face a severe shortage of qualified electrical engineers. It is investing in state-of-the-art power training institutes in the vicinity of its assets to develop high-quality engineering talent, custom- trained and oriented to its needs. Such examples now abound in India.
Some companies are now looking for talent beyond the traditionally accepted workforce demographics and experimenting with new types of diversity in the workforce, including gender, age and employment models. Gender diversity, sorely lacking in Indian companies, particularly at senior levels, is finding greater advocacy. The “second career” model, an interesting internship programme initiated by one of India’s largest business groups, targets qualified women in their 30s who have taken a break in their careers, typically for marriage and raising children, but who find themselves at a stage where a second shot at a professional career is an attractive value proposition. Providing this segment of the workforce, which has flexible work-life balance issues, with job opportunities can contribute to a high level of commitment, engagement and retention.
Another workforce segment that presents untapped potential is senior citizens who very often are physically fit to continue careers, but lack the skills relevant to new sectors. A unique initiative by a leading national retailer deployed senior citizens rather than young college graduates as cashiers in stores. This organization found the senior workforce to be far more cost-effective, more loyal and demonstrating a higher quality work ethic, factors that eventually contributed positively to its output. In fact, the world’s largest home improvement speciality retailer, Home Depot Inc., specializes in recruiting senior citizens or people older than 50 years who are experienced plumbers, electricians or general contractors.
Many traditional organizations have found they need to change their old models of recruitment, which looked primarily at sourcing talent from competitors in the same industry. As the engineering industry loses talent to the information technology, or IT, sector and consumer goods and pharmaceuticals lose trained sales force to emerging sectors such as insurance and telecommunications, these organizations find that they too must adjust their model for sourcing talent.
Talent, in fact, operates in a borderless world. An interesting example comes from the insurance industry, where private insurers are battling to recruit the best insurance sales agents and officers who will help them gain share in this rapidly growing market. One private insurer has devised many innovative approaches— from creating a “talent map” of potential supply pools across industries and cities to targeting sources such as online networking sites and existing social networks, for example, kitty parties— which have the critical competency level for success as an insurance salesperson: the “ability to connect and influence”.
Infusing new talent in an organization is about more than just “recruitment”. It needs an understanding of mindsets and motivations of different workforce segments. It is about developing a talent strategy that increases productivity and enhances engagement and retention. As organizations emerge from the downturn, the competition for talent will only get more fierce. This is an opportune time for organizations to get a deep insight into India’s talent demographics and fundamentally rethink their talent sourcing strategies. This could make the crucial difference between average performers and winners.
This is the third in a five-part series on innovative talent management. The series looks at various facets in the human performance process that need to be worked upon by companies to turn the economic crisis into an opportunity.
Deepak Malkani is a partner with Accenture India and leads the talent and organization performance practice. He is based in the company’s Mumbai office.