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An Introduction to Indian Talent Management

An Introduction to Indian Talent Management. Global Talent Management Institute, Seoul, Korea June 2012. Sentient June 2012. Snapshot. Demographics Talent Availability Engage and Develop Attrition and Retention HR Service Delivery Indian Talent – The Edge. Sentient June 2012.

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An Introduction to Indian Talent Management

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  1. An Introduction to Indian Talent Management Global Talent Management Institute, Seoul, Korea June 2012 Sentient June 2012

  2. Snapshot • Demographics • Talent Availability • Engage and Develop • Attrition and Retention • HR Service Delivery • Indian Talent – The Edge Sentient June 2012

  3. DEMOGRAPHICS Sentient June 2012

  4. India Overview *Source: Census 2001 Sentient June 2012

  5. Multiple Indias • 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 #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 #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 Sentient June 2012

  6. 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. Sentient June 2012

  7. Talent Availability Sentient June 2012

  8. 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 Sentient June 2012

  9. India Skill Availability Availability of Hi-Tech students(Source: TaskForce on HRD in IT - Govt. of India, Dec 2000) Tier I: 6 IITs, 2 IIITs, 6 IIMs, IISc Management Development Tier II:17 RECs, 33 others Tier III:191 Govt Funded 520 Self Financed India Skill Availability • 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 Entry Sentient June 2012

  10. Languages English enjoys associate status but is the most important language for national, political, and commercial communication. Sentient June 2012

  11. Indian Engineering Talent Supply Sentient June 2012

  12. ……….Indian Talent Growth

  13. Labour Shortages & Supply Sources Potential surplus population in working age group (2020) Russia and China will compete in specific segments UK -2 Mn -2 Mn Italy Russia Czech Republic -6Mn 0Mn Turkey Ireland -1Mn Iraq US -17Mn 2Mn China -3 Mn -10 Mn -9 Mn Japan 2Mn Israel Pakistan Iran 5Mn 0Mn France 19Mn 3Mn Philippines 7Mn 47Mn Bangladesh 5Mn 4Mn Egypt India Mexico(1) 4Mn Vietnam 1Mn Malaysia 5Mn 3Mn Indonesia Brazil Note: Potential surplus is calculated keeping the ratio of working population (age group 15 – 59) to total population constant; Source: U.S. Bureau of theCensus International Data Base; BCG Analysis Sentient June 2012

  14. 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 Sentient June 2012

  15. Engage and Develop Sentient June 2012

  16. 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 Sentient June 2012

  17. 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 Sentient June 2012

  18. 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. Sentient June 2012

  19. 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. Sentient June 2012

  20. 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. Sentient June 2012

  21. 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. Sentient June 2012

  22. HR Service Delivery Sentient June 2012

  23. 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. Sentient June 2012

  24. 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 Sentient June 2012

  25. Indian Talent – The Edge Sentient June 2012

  26. Growth projected in IT/ITES 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. Sentient June 2012

  27. India scores high on loyalty • 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. Sentient June 2012

  28. India is the largest opportunity English-speaking graduates and postgraduates Thousands PA 2,500 U.S. 2,000 Massive skilled labor surplus India 1,500 1,000 500 Philippines Egypt Caribbean** China Ireland Malaysia Mexico 0 0 5,000 10,000 15,000 20,000 25,000 Annual wage costs US$ PA Sentient June 2012

  29. 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 Sentient June 2012

  30. Beyond IT & ITES… • 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 Sentient June 2012

  31. India Environment The Indian 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 Sentient June 2012

  32. INDIA’S ADVANTAGE FOR PROVIDING HIGH-END SERVICES • Engineering Schools • Tier 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 MBAs • Tier 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 Sentient June 2012

  33. ...AND ITS OFFSHORE ECONOMICS ARE COMPARABLE TO THOSE OF SOFTWARE 2008 aspiration Revenue/Employee1 $ ’000 Avg. offshore salary $ ’000 • Remote n/w consulting and mgmt • Finance and accounting • HR services • Software • Website services • Data search, integration & analysis • Engineering and design • Customer interaction • E-Learning • Animation • Market Research • Translation, Transcription & localisation • Average 1 Including onsite team 2 High due to higher telecom costs in places like India 3 High due to ‘content’ cost remaining similar, 4 $6,000 today growing @ 8% $ terms, i.e., ~15% rupee terms Sentient June 2012 Source: Mckinsey study

  34. OPPORTUNITIES THAT EXIST OVER MULTIPLE GROWTH HORIZONS Latent opportunities Rapidly evolving opportunities • Logistics management • Consulting services • Monitoring services • Legal advice • Distributed product development • Secretarial services Established opportunities • Network consulting and management • Data search, integration and analysis • Market research services • Website services • Remote education • Cust. interaction services • Finance and accounting serv. • Engineering and design services • HR services • Animation • Translation, transcription and localisation Higher value added, higher complexity Sentient June 2012

  35. Thank You mohan@sentient.asia Sentient June 2012

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