India’s financial services firms accounted for 9.7% of the country’s gross domestic product (GDP) in 2005-06, and some of the companies in the business hired around 5,000 people in 2006-07. But most of the employees that were hired lack the desired skill sets. This is the finding of a survey conducted by audit firm KPMG and released on Friday, 25 May.
Titled ‘Global Skills for Graduates in Financial Services’, the survey said that despite being “a country with one of the world’s largest labour pools, India is experiencing the high cost of competition and tight supply versus low availability of appropriate skills”.
“These are serious constraints for organizations,” the survey added.
Recently, ICICI Bank Ltd, India’s largest private-sector bank, said that with 53% of its population under the age of 25, the country possessed a vast reserve of potential employees.
It does, but KPMG says that these people do not have the skills required to succeed in the financial sector.
The study reported that 58% of the 19 Indian organizations surveyed claimed that they experienced difficulties in recruiting the right people with the right skills. The 19 firms surveyed included Tata AIG General Insurance Co. Ltd, HSBC, ABN Amro Bank, HDFC Ltd, Bajaj Allianz Life Insurance Co. Ltd and ICICI Bank Ltd.
The survey was brought out by KPMG in association with the UK-India Education and Research Initiative (UKIERI).
Commenting on the talent crunch faced by companies in India, Ian Gomes, chairman (new & emerging markets), KPMG, said: “The recruitment of the right talent into the financial services industry is a big issue in countries such as the UK and India. Our report shows that graduates gain theoretical knowledge, but lack practical job-related skills.” He added that most recruits lacked soft skills.
According to the KPMG study, part of the problem faced by Indian companies is because of their hiring policies: Most people hired are pushed into the sales function without any exposure to the back-end of the business where they could haveactually learnt more. This strategy will only work, the report added, if Indianschools focus on improving the job-related skills of people.
To bridge the skills gap it faces, private life insurer ICICI Prudential Life Insurance launched a post-graduate course in management and insurance in March 2007.
“The programme, which comprises classroom- and on the job-training, has been designed to identify and nurture potential talent for careers in the insurance sector,” said Judhajit Das, chief (human resources), ICICI Prudential Life Insurance.
According to executives in placement firms, financial services companies are preferred hunting grounds for firms in other sectors seeking to hire people.
“The demand for finance professionals is so huge that a senior manager with seven to eight years of experience can easily be hired as the chief financial officer of say a retail or fast-moving consumer goods company,” said Shiv Agrawal, chief executive officer, ABC Consultants, a placement firm.