THE SKILLS GAP CHALLENGE

A lot has been written about the skill gap between what the industry wants and what the education system produces in India. Our government has been proactive in terms of planning ways and means to bridge this gap. The country’s present Eleventh Five Year Plan’s (2007-2012) skills development programme plans to increase the proportion of formally and informally skilled workers in its total workforce from a mere 2 per cent now to 50 per cent by 2022. This would mean leveraging our demographic dividend of a young population and creating a 500-million strong resource pool. The new Twelfth Plan estimates the present percentage of formally trained workforce, through vocational education, to be at 12 per cent and plans to increase it to 25 per cent by 2017, adding a humungous 70 million to the formally trained workforce in the next 5 years.

The push to improve quality in ITIs in particular and vocational training in general, moving from a supply-driven to a demand-driven model, has already yielded great dividends, with ITIs in certain belts claiming 100 per cent placement figures. In most other places, though the informal segment of the industry still fills in its workforce needs with fresh hands, these employees with no formal training are then trained on the job. What is of even more concern is the fact that 90 per cent of the jobs are being created in this very informal sector, which is reluctant or underprepared to hire a formally trained workforce. At the other end of the spectrum, the organised sector is still unhappy with the quality of workforce being produced through the vocational system. Employers feel the lack of basic education and the lack of the ability to learn new skills are serious impediments to hiring in these dynamic times. The capacity to produce formally trained employees has increased significantly, but as against the requirement of 80,000 trainers, the capacity to produce trainers remains at 2000; this naturally creates a great strain on the quality of the output of the institutions. It is unviable for the government to create and fund a system that can produce these numbers at the required quality level, and the government has asked the private sector to come forward. A good number of PPP initiatives at this level have already seen the light of day, but a lot more needs to be done, both for the survival of our private sector in this globally competitive economy, and for the greater good of our youth.

We need to look at newer avenues and more efficient models of training. Should we look at shorter courses with more frequent interventions like in China? Some economies have also found success in using the informal sector to train the informal sector. With our informal training sector being as large as it is, does a new avenue lie there? This issue of The Human Factor has gathered the skilled manpower needs in a host of sectors, including agriculture, banking, manufacturing, fashion, health care and education. Skill development initiatives for jail inmates, schemes for the differently abled and special plans for the deprived sections are other interesting sections you must look out for. We hope you find this issue relevant and rewarding. As always, we look forward to your feedback. Happy reading!

DECISIONS AND THE PROCESS

A key feature that we have been running from the very inception of The Human Factor is ‘HR Decisions’. As a magazine focused on human resources, we have always felt that it was important to understand what were the decisions that human resource managers thought were important to their divisions and their organisations and for the people on whom these decisions were applied. When we were researching the importance of managerial decisions in general, and HR decisions in particular, on long-term organisational outcomes, these articles and interviews turned out to be a treasure trove of information and insights. Interestingly, a fair number of these decisions had far reaching implications on organisations, but far more in number, including some that would fall in the aforementioned category, had more to do with issues close to the heart of the individual manager or leader, which may or may not have been in direct alignment with the organisational direction. This insight pushed us to delve into the process of decision-making. Were good decisions always a matter of making the right choice in the right context? Was there a science, a process or a decision tree which could point us to the right decisions? If we look at the history of organisations or even countries, it would be difficult to answer in the positive.

Some decisions that could have seemed weird at the point it was taken, may in hindsight, look momentous. Decisions that might have seemed wise and well thought out have had a strange way of turning turtle.

Before Jack Welch became synonymous with GE, he was the ultimate outsider, heaping scorn on the bureaucracy of GE headquarters, and excluded from the short list of executives chosen to succeed Reginald Jones as CEO of GE. By GE standards he was too young, too impatient, too reckless and to top it all, he stammered. And then to the horror of the old guards Reginald Jones announced Jack as the successor. Was it a great decision? Not many thought so at that time, as Jack tore up GE’s old ways and processes in his pursuit of competitiveness and became a pariah of sorts in the US world of business. It was only with the onslaught of the foreign corporations, which decimated US corporation after corporation with their lean and mean ways, did the US organisations start appreciating the wisdom of Jack’s ways. And today, whether we talk about GE or US businesses, or businesses in general, it is hard to find a book that does not talk about the ‘Jack Welch Way’. A good decision in the long term, which did not seem so great in the short term, a decision that managed to bypass what some call “the tyranny of small decisions”.

This issue should entertain you with interesting decision stories, some that have succeeded spectacularly, some that have failed miserably, but intriguing, however you look at them. We have spoken to academicians and experts, and to the decision-makers, in an effort to find a method to the decision process. As always, I hope you enjoy reading this. I look forward to your valued comments. Happy reading!

Education and the System

Over the last few years it has been fashionable in India to say that the country is just not providing enough human capital to sustain its fairy tale growth story. In the corporate sector too, almost anyone that I get into a discussion with, with regards to human resources, talk about the dearth of employable talent. Almost anyone and their dog, expects this to the a problem that needs to be sorted out by the government, and has for reasons best known to them, left the very important task of talents development to the government of the day.. To leaders of corporations in India, I say I am absolutely hyper stimulated by the confidence that you have in government, a government which by policy has allocated low resources to talent development than any other nation of the same stature.. To those in the public sector, I bow to your acceptance of the fact, that the government in all its flawed temper possibly always knows the best.

Let us look at facts as they are, in India in terms of education , employment and economic growth, the statistics are mind numbing. It will take more than an Einstein to make sense of the madness that the numbers point to. The growth that India has seen over the last two decades, unlike most other Asian economies, has been in the white collar sector. Unlike China, Vietnam, Malaysia or Thailand, where growth has been driven by the manufacturing sector, in India, growth has been driven by the Information Technology industries, or to be more precise by firms in the business process outsourcing space, a space that has by definition been driven by white-collar employees. In the inside pages you will find insights and explanations into the many reasons that the Indian economy shows up. It will however be difficult to find reason or even a rhyme to the apathy that the Indian Government in singular and Indians as a whole have treated the education sector with. We have hardly invested in developing assets that will develop our future assets and yet we expect employable and productive human capital to appear at our respective doorsteps like ‘manna from heaven‘.

It is only recently that the Ministry of Human Resources has deemed it important enough to be aired in national television that the country faces an alarming dearth of qualified teachers and mentors. We also keep hearing about stories about people who are well educated and are yet unemployed. It is a strange puzzle in a growth economy, to have a dearth of talent and yet have educated unemployed in numbers that boggles the mind. In this edition of The Human Factor we try to analyze and against insurmountable odds try to find the reasons to the anomaly that the Indian learning and teaching system is.

In this issue we have strived hard to get you perspectives from across the globe. Teachers who have taught in India and now are teaching in a system that is new. Teachers who keep trying to better the system from inside. And teachers who, while having an Indian perspective, have spent most of their educational career’s abroad. This was an issue close to heart, I have two school going children, and as always I look forward toward your comments and analyses. Happy Reading.

Step Up to the Future

Technological innovation, globalisation, geographical shifts in economic power and the changing demographics of the working population, has significantly changed the way work is conducted in today’s world. The workplace therefore is naturally undergoing changes to adapt to the new work and workers.

At first sight, the office of the future may be structurally deceptively similar to the typical workplace today, with employees still sitting at their desks, meeting in conference rooms and taking designated lunch breaks. There sure will be some visible changes, with more open-plan configurations, and new gizmos replacing today’s laptops and display devices, but the fundamental changes to the office environment would not necessarily be visible to the casual observer. With tele-working and flexible work schedules becoming more the norm than exception in the service sector, the office could lose its significance as the primary location of service and revenue generation, and become more of a meeting and coordination centre. Fixed hours, fixed location, and fixed jobs are on their way to becoming a thing of the past for many industries, as opportunities become more fluid and less predictable. The 40-hour employer mandated workweek will become less relevant as more firms leverage new age communication technologies to outsource complex projects to subcontractors, temps, and freelancers, who will log-in from cafeteria and airport lounge or home offices across the globe to collaborate and complete their work. In the United States, freelancers and subcontractors already comprise one-third of the workforce, and their numbers keep growing in an economy that is at best unpredictable.

Location-based and formal jobs will continue to exist, of course, these will become smaller slices of the overall economy. Manufacturing, agriculture, health care as well as administrative and public services will need the presence of workers on location, but technology and automation will make human intervention minimal. Some futurists have predicted the obsolescence of the corporate headquarters or the central office, but that does not seem to be likely in the near future. The increasing necessity of collaboration with the external stakeholder and the face-to-face teamwork, which would be necessary to coordinate increasingly complex projects, would keep the physical corporate office relevant. Office plans would become modular and flexible to adapt to the changing needs of the organisation.

The other fundamental change that we see happening in the workspace is in the way we measure and reward outcomes and performance. While even today many organisations measure and reward performance based on rigid and fixed working place and timings, progressive organisations are embracing the idea of measuring and rewarding performance on the basis of output and results rather than long unproductive hours. Research has produced overwhelming evidence that employees are more productive if they have greater autonomy over where, when and how they work. The Results-Only Work Environment (ROWE) work system which measures performance on the basis of results, has taken off in the private sector, and shown significant improvement in performance and job satisfaction. With governments and public sector organisations also focussing more on results, the future of the workplace looks to be more result oriented. These changes, unlike those in the physical work environment, are deep cultural changes in the way we conduct ourselves at work and away, and could be unpalatable to some. But then, as celebrated futurist Alvin Toffler said, “Change is not merely necessary to life - it is life.”

Worried about the bottom line? Have Fun!

Are you worried about being caught surfing the net, updating your Facebook status or ‘tweeting’, while at work? Surfing the web actually increases productivity according to a new study from the University of Melbourne. Dr. Brent Coker of the University of Melbourne studied 300 workers and found that employees, who took time between tasks to shop online, play online games or watch videos on YouTube were 9 per cent more productive in a given day than their colleagues who did not. The University of Melbourne study is by no means a misnomer. A University of Florida research found that workers who have a good time while they are on the clock, accomplished more, showed a higher level of creativity and extended more help to co-workers. The idea that fun and work do not walk hand-in-hand had taken a walk a few decades ago. Work and productivity may be serious business on which experts and academics rack their brains, but that does not mean employees should not be having fun in the workplace. Research over the last few years suggests that there is a positive correlation between fun in the workplace and productivity. According to the Great Place to Work(R) Institute, a research and management-consulting company, the stock-market value for Fortune magazine’s ‘100 Best Companies to Work For’ grew four times faster than the market between 1998 and 2005. No wonder the noted inventor and self-confessed workaholic Thomas Alva Edison said, “I never did a day’s work in my life. It was all fun.”

For the HR professional, the best part of implementing ‘fun at work’ activities is that it need not burst the budget. More often than not it is possible to tie-in fun activities with existing rewards and recognition programmes. These activities also typically garner more volunteers and champions then the run-of-the-mill. In times when every little increase in budget needs several rounds of management justification, fun-at-work activities is just godsend.

With the case for making the workplace fun, having been made, I must warn my colleagues in HR about the pitfalls of going over the top with fun. Making the workplace fun is serious business, and small miscalculations may be the difference between spectacular success and abysmal failure. While implementing fun at work activities it is important for us to keep the context in view at all times. Perception of fun vary between cultures and within cultures, and what works for employees in China may just be anathema to employees in India. While customers at a restaurant or retail outlet may appreciate employees having a fun time, those at a hospital emergency out-patient department could find it to be callous and insensitive. A one-size-fits-all philosophy to implementing these activities will almost certainly spell disaster.

In this issue, we bring to you a variety of perspectives on ‘fun at work’ from both employees and employers, across industries. The team talked to retirees and job-seekers, novices and experts, the blue-collared and the blue-blooded to bring in a rounded view about this much talked about subject. It was an eye-opener for us, and while we try to make working at The Human Factor more fun, I hope and believe you will find this issue actionable and impactful. Happy reading!

Innovating R&R

Acouple of months ago, while flipping through a UK-based HR journal, two news items placed side by side caught my eye. One was that Yazaki, a leader in the electrical distribution systems, has increased pension contributions to reward loyal employees, the other that Quorum Business Park, which has 3500 workers, announced a reward scheme to encourage employees to cycle to work. Two vastly different R&R designs, but both equally innovative and objective driven.

The rewards and recognition landscape has changed considerably over the last few decades, and we have seen innovation in both monetary and non-monetary systems. Some have been able to integrate with organisations’ business practices and directions, while others have helped transform organisational culture. Not all developments had a positive impact. Some R&R systems of the erstwhile banking and financial sector in the Western world and especially in Wall Street ran amok, with performance pays indexed to notional gains, and worked as a catalyst in bringing down the financial markets. The Wall Street reward system came in for a lot of flak from both ordinary people and policy makers, and we have now seen changes to make the system more transparent and ethics driven. One major fallout of the criticism of the erstwhile reward systems has been a definite move away from indexing rewards to market performance and more towards sustained and ethical business performance. The other positive out of the criticisms is that R&R designs are perceived as more fair than ever before because of the constant scrutiny that the media has subjected executive pay and perks to.

With organisations remaining conservative in their growth outlook, budgets for rewards and recognition have remained tight. Many employers are focusing on non-financial recognitions to motivate and engage employees. The other significant move in recognition systems has been towards personalisation or localisation. Personalisation certainly adds significant value to recognition and touches the heart of the receiver, making him or her feel that much more special. Communicating clearly the objectives and criterion, as well as the reasons for choosing a particular reward and recognition system has also grown in significance. Without proper communication, non-financial benefits have a tendency towards dilution and becoming something of a fad, rather than a motivator.

In this issue, in partnership with the Great Place to Work® Institute and presented by Edenred, we bring to you a study on the ‘Best Companies in India for Rewards and Recognition’. This study will help you understand the present R&R landscape and the latest innovations that organisations are designing in this space. You will also find interviews with the best companies for rewards and recognition, interviews that outline the motivations, objectives, constrain and challenges that Human Resource divisions have to keep in mind while designing and implementing these policies. It is exciting to see both large and medium size organisations, across industries, use R&R to boost employee performance as well as build their employer brand. R&R is becoming a significant tool to leverage in the ever-growing war for talent.

We hope to be able to bring to you more contemporary, actionable and cutting-edge, research and surveys in the near future. I am certain you will enjoy reading this issue, and I look forward to your feedback as always. Happy Reading!

Shaping up for the Future

The HR landscape across the globe has been changing fast, and businesses are looking up to the human resource function to play a more integrated and substantial part in the organisation’s growth story. Business leaders over the last couple of decades have realised that in a globally connected world, where technological advancement more often than not leads to standardisation of products and service, they will have to leverage human capital to create key differentiators and stay ahead of competition. The fact that we see more HR executives in the boardroom than ever before proves the point that more and more business leaders, investors and stakeholder have become aware of the crucial role that HR plays in the organisation. A Wall Street Journal survey of 101 large corporations revealed that nearly two-thirds had either a current or retired HR executive serving on their board. The transformed HR has proven itself to be capable of managing the challenges of today, as is evident from a 2010 HRPA survey, which states that most CEOs are happy with the performance of their HR leadership. CEOs interviewed for the survey felt that the HR leadership was making exceptional contributions in strategic areas, including talent management, succession planning, engagement, recruitment and retention.

We have done commendably in rising to the challenge of today. But is HR prepared for the future? Having successfully delivered as a business partner in meeting the present challenges, the business leadership will expect HR to deliver across domain expertise in the future. Demographic, economic and societal shifts combined with technological advances will change the ways people work and are managed. HR systems and processes will have to adapt to a world with dynamic team sizes, complex multi-geographic projects, independent contractors, virtual collaborations, and a new generation of workers who need flexibility and yet want a challenging work environment. Along with systems and processes we will have to fundamentally restructure the way we think about work and workers. The world is getting smarter and markets are becoming even more competitive. Jobs that once had been imported into the country may soon be exported to countries with lower cost structures. As organisations move up the value chain they will also face the inevitable talent crunch. In the face of an unpredictable future, organisations no longer are looking at ordered and structured responses. The need is to make organisations that are large and stodgy by character into firms that are nimble and fast, or as Louis V. Gerstner puts it, ‘make elephants dance’. Gerstner did make a behemoth in trouble like IBM dance and waltz its way to success, but to do that IBM had to undergo a complete overhaul of its culture and processes. Present-day businesses and HR leaders have the benefit of analysing the practices of Gerstner and other turnaround leaders and are adequately equipped to meet, if not overcome, the challenges of the future.

As always, we have reached across a cross section of CEOs, business leaders, and HR practitioners to bring forth their perspectives on what the CEO wants from his HR leadership, and how HR is shaping up to face the future. We hope you will find the articles informative and impactful. Happy Reading!