The HR function in India today has transformed into a function that finds business solutions, and is becoming known for saying “this is how we can accomplish this” as compared to “you can’t do that”. The function was often perceived as a bureaucratic, compliance-driven function that is reactive versus proactive and that changes at the speed of a rock! In most organisations, that perception is well-earned, since a good number of HR processes are developed in response to a significant event and are intended to limit certain behaviours instead of enabling others. Some leading organisations are breaking with tradition - at least when it comes to talent management - and establishing new structures that factor in the realities of a dynamic Indian business environment. A fair amount of credit for this transformation goes to the major HR Consulting firms which have in the last few years established themselves in India. They brought with them Best Practices and systems, that were seriously lacking in the indigenous firms. Most C-level executives today realise the need for the HR function to remain central to the business strategy. Mid to large size firms have realised that they may not have in-house resources to transform their present HR departments to the company’s strategic advantage. These organisations are outsourcing a significant chunk of their HR processes, both administrative and strategic, to specialised HR consulting firms. Many organisations are extending the scope of HR activities to include formalised processes focusing on proactive management of the employment brand and retention of the star performers. These organisations, with expert advice from their consultants, are tearing down massive walls that years of political infighting had created between functions, in order to develop entirely new HR structures where all deliverables are integrated to “strategically” manage the portfolio of talent. No longer does the training function devise training programmes for skill sets that can more readily be acquired through recruitment. No longer do key employees leave an organisation because a bad manager kept them from advancing. No longer are offers to top candidates rejected due to inadequate market knowledge of C&B. The benefits of expert advice from an HR Consulting firm can repay the cost of consulting many times over. We have indeed achieved a lot, but there is still a long way to go before these Best Practices have a direct and positive impact on the Indian economy.
The irony specific to India is that the large companies, which already have established HR processes, consume a significant chunk of the consulting business, while the smaller firms or start-ups, which desperately need to transform their people processes, are either not aware of or do not have the means to use consultants. The 3 million SMEs in India constitute 50% of our industrial output and 42% of exports, while providing employment to 50% of the manufacturing sector workforce. Common sense says that a slight improvement in their efficiency will contribute significantly to our growth rate. Interestingly enough, a Stanford–World Bank research team is funding a study to analyse the operations of small manufacturers in India and, at the same time, offering pro-bono consulting to a select group of small companies to help enhance their HR processes. Will our own trade bodies wake-up and put resources into these efforts? It is time to step up to the plate. It is time to embrace new, proactive endeavours. Let us stop paying lip-service to strategic HR and start implementing.