Inclusive Economy and the Unorganised Sector

In most forms of government, the state machinery’s stated goal is to serve its citizens. People are pivotal for the success of both corporations and nations. Nothing can be mobilised and no progress can be achieved in the absence of this essential resource. And yet when we as Human Resource professionals discuss issues of importance it is almost always with reference to the corporate sector. In the context of India, however, the corporate sector employs less than 10 per cent of the total workforce, and therefore development in employee benefits and social security in the area of corporate HR remains out of reach for the population that needs it more. The prevailing wisdom is that trying to draw up legislation to bring the large unorganised sector workforce under the regulatory framework applicable to the organised sector would create inefficiencies and market imperfections, which would, in turn, negatively affect our fledgling market-driven economy. Moreover, our cash-strapped government would have difficulties in financing the infrastructural and institutional requirements that an endeavour of this proportion would require. While the government would have to realistically play the role of a facilitator in trying to provide a safe and secure work environment to this population, it will also be to the benefit of the corporate sector to engage and uplift the employees in the informal sector. In this era of “inclusive growth”, if we fail to provide a semblance of social security and employment benefits to this large section of our fellow people, we might see our dream of double-digit growth fizzle out soon. This year we have already seen civil unrest across a large number of developing countries, both in the Middle-East and in South-East Asia, as well as in China. The root cause of these unrests remains the inability of the respective governments to give a secure and stable socio-economic environment to a large section of their population.

In this edition of The Human Factor, we have spoken to a large cross section of public policy and HR experts from academia and industry, in the United States, in Europe, in Japan, Russia, Singapore, China and India. We have tried to bring forth the experience of government and industry, in developed countries as well as developing countries, in dealing with developmental economics and human resource development. Our endeavour was to understand the impact of public policy on human resources around the world. There are stories of both success and failure, but there are learnings for both legislators and corporations, that should help us in developing a strategy to contribute to the upliftment of human resources in the unorganised sector.

The feedback that we have received from our last issue, from the entire fraternity, and especially from those involved with XLRI has been phenomenal. The legacy that XLRI has created cannot be covered in a single issue. In this issue we continue the XLRI story, featuring alumni who could not be accommodated in the last issue either due to constraints of time or those of space. We hope the community will find this issue equally engaging.

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An Experience called XLRI

When a private business school with no government subsidy whatsoever is able to match the reputation of the revered IIMs with their enormous financial clout and government support, you know that there is something exceptional about the institute. XLRI has, for decades now, been recognised as the best institute for human resources in India, and has consistently been ranked amongst the best in the area of business management. The journey of XLRI from a small institute operating out of a couple of rooms in Jamshedpur to the now large campus has been steady though not entirely smooth. The institute grew in the face of adversity and fund shortages, and came out stronger and better every time.

For this issue we interacted with XLRI’s illustrious alumni, many of them at the helm of affairs in India’s largest organisations. The school has, over the years, consistently produced managerial talent that is much sought after in the country and beyond. Specifically in the areas of human resources and industrial relations, XLers have acted as change initiators, and a significant amount of the evolution of the human resource function in India, can be attributed to them. While there are quite a few excellent business schools in India, what makes XLRI stand out is its emphasis on social justice, ethics, and values. XLRI has also been at the forefront of globalising its footprint. At present, it is spreading its wings through international tie-ups and satellite programs, and is at the cusp of a great leap of introducing joint degree programmes with the Case Western University. XLRI is also unique in the way that all the stakeholders; the students, faculty, administration and alumni, are closely knit like a family. The reason possibly is the small cohort size which allows everyone to know each other, with students visiting faculty at their residence being the norm rather than an exception. This environment of collegiality and emphasis on ethics have helped XLRI to produce business managers who are socially conscious and willing to contribute to a cause that is larger than their individual needs, and that probably is XLRI’s greatest achievement.

While business schools in India keep attaining great heights, academicians of Indian origin have been creating ripples in business schools in the United States and Europe by taking up leadership positions at some of the best schools. In this issue, Professor Yash Gupta, the inaugural Dean at the Carey Business School, Johns Hopkins University, shares with us his insights into the changing face of business education and speaks about the larger responsibilities that business schools have in creating a society free of corruption and greed.

India is an economy that thrives on family-owned businesses and their contribution to the GDP. CII recently pegged this number to be at around 60 to 70 per cent. To bring to our readers a better understanding of the unique HR challenges and intricacies that a family-driven business faces, we have introduced a new section, Family, Inc. As always, we look forward to your feedback to keep improving our magazine.

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HR & Technology: Two to Tango

It gives me immense joy to announce the launch of The Human Factor’s digital avatar, thfdigital.com. While we already had a presence on the internet, where our readers could access our articles, stories, and archives, thfdigital.com promises to be much more than a mere repository of The Human Factor. We hope to be able to create a platform that will connect and enrich all professionals and students who are interested in the ‘human factor’ of organisations, through this digital interactive medium. As thfdigital.com takes its first baby steps, we seek your active participation, suggestions, and guidance to create a web space that we can all call our own.

This issue of The Human Factor, to mark the launch of thfdigital.com, dwells on the effects and efficiencies of technology in the Human Resource Management function. The function in organisations is undergoing rapid change in structure and objective, reacting to a changing social and organisational environment and rapidly evolving systems and processes that use technology to reduce routine work and enhance productivity. The use of technology in what we now call ‘Human Resource Management’ is not new and may be traced back to the punch card that employees would punch as soon as they arrived at their factories and workplaces to mark their attendance. With the increasing globalisation of business and a workforce that is diverse and dispersed, social and organisational changes have increased expectations from HR professionals to provide expanded services of a higher quality; faster and seamlessly linked with other corporate functions . Information technologies in general and Human Resource Information Systems (HRIS) in specific, which provide enabling technologies to assist HR professionals in the delivery of services, have also simultaneously increased the expectations that employees, managers, customers, suppliers, and regulators have for the HR function.

HRIS however has very humble historical origins. Initial efforts to manage information about personnel were mostly limited to employee names and addresses, and perhaps some employment history, often scribbled on 3x5 note cards. Interestingly enough, what triggered large scale use of technology in HRIS was not efficiency or engagement, but the volumes of regulatory data that needed to be churned out in a political landscape, where employee rights was fast becoming a lightning rod for activism. By the 1980s, the Human Resource department became one of the most important users of the exceptionally-costly computing systems of the day, often edging out other functional areas for computer access. Although HRIS systems were computerised and grew extensively in size and scope during this period, they remained (for the most part) simple record-keeping systems. It is only in the last two decades that HRIS has grown to become a business function that creates and analyses data to support and enhance business growth and productivity. Technology has dramatically affected traditional HR functions in recent years, with nearly every HR function experiencing some sort of reengineering of its processes due to developments in information technology. The modern HRIS is an integrated and complex system that not only captures data related to human resources, but also churns out analysis to help in managerial decisions for structuring both organisational and employee growth.

As always, we hope you find this issue engaging. Do write to us with your suggestions. Drop in one of these days at thfdigital.com; we look forward to your presence.

l&D: Your Guide-on-The-Side

J.K. Galbraith, the well-known economist said, “There are those who don’t know, and those who don’t know they don’t know,” commenting on people who try to predict the future. I would not like to fall into the second category by trying to predict the future of learning and development, but it will possibly be worth exploring the macro-factors that will significantly impact learning and development in the times to come.

That technological advancement is and will be a change enabler is a fact of life today; the other factors that I believe would change the landscape of L&D are the changing demographic profile of our working population and the shift of economic power from the west to the east. Global connectivity and a diverse multi-location workforce have already moved a large percentage of L&D activities from the physical to the virtual space. Technology has enabled on-demand learning; social networks and learning environments have enhanced the informal learning phenomenon in workplaces; and these have augmented formal learning and development initiatives. L&D professionals believe that in the near future 80 per cent of learning will be on-demand and informal while 20 per cent would be formal. With telecommuting catching up, we might soon see a day where teams will come together only on days of team-building and learning initiatives.

The change in the demographic profile and the abundance of accessible information have also changed the equation between the trainer and those being trained. Access to information which was earlier available only to experts, has empowered individuals to challenge experts and authority, and the role of the trainer has changed from that of a “sage-on-the-stage” to a “guide-on-the-side”. L&D professionals are chagning and will have to change the way they deliver training and create new interactive content which will better suit this new reality. With growth in the number of employees who come from rural and semi-urban areas, it has also become imperative that vernacular e-learning content be developed, and indeed we have seen a number of content developers explore this space.

With the growing might of the Asian economies, specifically that of China and India, L&D will need to rethink and redesign programmes, that today are fundamentally western in context, to programmes that take into consideration the cultural as well as the ground realities of the eastern economies. Working with people from diverse cultural backgrounds, as well as working in geographies with a culture that is different, require certain skills as well as some specific knowledge, and L&D will play a vital role in this area.

With the growing importance of L&D in the business context, forward-looking organisations have started leveraging the function as a vehicle for change, innovation, and strategic growth. In this issue you will find perspectives from practitioners and businesses that are trying to build resources and stay ahead of the curve through innovative L&D practices. The challenges that lie ahead for the L&D community are complex, but the opportunities are enormous. It is time for the community to grab this opportunity and shape its own destiny, because the only way to predict the future is to invent it.

The Future of The Workplace

One significant effect of India’s demographic dividend has been that the composition of our workforce has changed more rapidly than that of most other countries. While in the United States or Japan the workforce has aged significantly, in our part of the world it has become much younger. Technology, and the affinity and ease with which the younger generation of workers use technology, has changed the workplace, as they have changed the fabric of our society. The workforce that we see today is diverse in gender, colour, race, origin, orientation and their likes and dislikes, what is interesting though is that this workforce doesn’t allow these differences to affect their work or personal relationships.

While most organizations conduct orientation and induction programs to allow new workers to assimilate into the organization and its culture, forward looking companies have been long aware that the workplace of today, in terms of both amenities and culture, may not be able to attract and retain the talent of the future. Technology has changed the way that we do business, and continues to change the way we lead our lives. A couple of decades back when a large proportion of today’s workforce was entering their profession or were settling down in their careers, mobile telephony was the stuff of luxury and to some extent fiction. Today a business, or for that matter an individual, cannot dream of functioning without the same. Social networking has made connecting and communicating with friends and affinity groups easier, and the prospective employee today seeks more information about the future workplace from informal channels than from official channels. Across the globe more women have entered and re-entered the workforce, and structures and policies have changed and need to change to accommodate the aspirations and needs of this demographic, and to leverage the unique qualities of this ever growing workforce. The differently-abled today have access to knowledge and resources and are completely capable of significantly contributing to the economy, and organizations are creating spaces that take into consideration their special needs. The workplace is also becoming truly cosmopolitan and global. This new workforce takes flexibility for granted, is at ease with the concept of taking charge of their own careers, and unlike the workers of yesteryears do not expect job security. They are aware of the fast changing dynamics of the workplace and know the need of upgrading their skills on a regular basis. While they do not expect employment for life, they do expect that their organisations will help them to remain employable. These changes also mean that organizations require tweaking their work culture, their compensation and benefits, as well as their motivational tools to tune in with the requirements of this diverse and technology savvy workforce. In this issue we try to envisage from employees as well as employers the changes that they are incorporating in their workplace and the changes that they foresee in the future.

We have also incorporated a couple of new sections in this issue, and have tried to get news and a view from the middle-east, a market that is grows in importance with time. As always we hope that you find the magazine engaging and useful. Do write to us with your feedback, we depend on your views to improve The Human Factor with every issue.

Enabling Innovation

The last decade has marked the coming of age of the Human Resources function as a strategic partner to business. This evolution can be largely attributed to the innovations that the Human Resources function had incorporated in its systems and processes over the last decade. Through outsourcing and enabling technologies, HR was able to hive off and automate a significant amount of the low value and repetitive work that would take away most of its productive time a few years back. With more time and resources, HR was now able to focus on strategy and planning, and the fact that the time was well spent is borne by the fact that today most Fortune 500 organisations have an HR seat on the Board. There have been significant advances in aligning compensation and benefits with business results and direction, bringing together a diverse workforce to adapt to the global village phenomenon, and in recruitment and skills development processes. While all these efforts have given forward-looking organisations a competitive edge over their peers, HR’s most significant contribution towards the creation of winning organisations has been and would be in creating a culture of innovation. With the commoditisation of even high-value, complex-technology products, the organisation of the future which wants to stay ahead of the pack would have to be necessarily innovating continuously in systems, processes, products and services. These organisations will need to continuously recruit people who are innovation champions, and having recruited them, provide them an atmosphere which encourages innovation while helping them upgrade their skills.

As far as innovation is concerned, the head of the Human Resources function could well be the most important person of your organisation. The most powerful force and differentiator in business is culture. While it might be a stretch to say that corporate culture is the sole responsibility of HR, the people who are hired and the training and cultural imperatives placed on the business are done so through HR, and this is where HR can have a big impact on whether or not the firm is culturally attuned to innovation. There is a perception in the business community that innovation is the responsibility of a product team or a business head. We must understand that not all employees are innovative, nor would everyone be able to internalise or institutionalise innovation. Innovation springs from the minds of creative individuals working in an environment that spawns and encourages innovation. Attracting and keeping the most innovative people, constantly improving their skills, and creating a culture that supports innovation will enable the organisation to create a sustainable advantage.

In this issue, we have deliberated on the innovations that HR has internalised over the last decade. Across the board, practitioners and business leaders agree that HR has evolved to create strategic business value. It is now time to step up the tempo and proactively start creating value for the future through championing the innovation culture. Institutionalised innovation will be the gamechanger of the future, and businesses will look up to HR to be the innovation enabler.

Welcome 2011

The New Year, as always, arrives with a lot of cheer and positivity. The economic indices are looking up, and we hear that most organisations are looking at hiring people and retaining employees through better compensation packages. The last certainly is news that makes Human Resource managers happy, because content employees allow us to implement better and innovative practices. 2010 has been a decent year from the perspective of the industry. We have seen significant growth, and have been able to leave behind the paranoia of recession that had consumed us the year before. 2010, however, when we look at it from the perspective of an Indian citizen, will perhaps be best remembered as the year when corruption of mind-boggling proportions kept creating news every few days; be it IPL, CWG, or the 2G and mining licence scandals. We can only hope that we have seen the worst, and 2011 will be the year where ethics in business, and not corruption, take centre stage.

In this issue, we have profiled a hundred organisations that we believe are companies that the next generation of professionals and consumers will look up to. While this is no exercise in ranking organisations for their superiority in a product, function or category, this list has organisations that have made excellence their mantra in everything that they do. Amongst a host of organisations that have shown stellar performance, either in creating shareholder value or capturing the mind-space of consumers and employees, these are organisations that stand out for multifaceted performance. To capture the imagination of a generation that takes geographical mobility for granted and consumes information at the speed of light, organisations can no longer be complacent by producing superior performance in a particular area of operations. The convergence that we keep talking about is true and happening, and it is happening at a scale that is unprecedented. The Next Gen professionals and consumers, while hungry, are also discerning to the extreme, and organisations that are unable to capture their imagination at multiple touch points will find the going tough. Forward-looking organisations like the ones that have been featured in this issue are aware and willing; they are initiating activities at multiple levels and are not afraid to experiment with a variety of forms and factors. We have tried to analyse what makes these organisations successful in what they do, and we hope you will enjoy the read.