Human Capital Outlook

Why are a few Indian companies not winning in the war for talent?

A recent article in an Indian business daily described how ‘tight’ the demand & supply equation for talent has emerged, with Indian companies across sectors just about being able to meet their hiring numbers. It went on to say that with almost 10 % of the workforce retiring in the next five years in sectors such as Financial services, compounded with the 7-8 % GDP growth, there is likely to be a severe shortfall of talent, demand would continue to be greater than supply. With the spurt in demand, professionals are going to be choosier. While this may not be surprising, what is indeed noteworthy is the way they are choosing one job over the other & the companies’ perception of the same.

The company brand continues to be important, several times is the overriding criteria & a one way street- while one cannot be assured of a perennially positive ‘employer branding’, at the same time, a negative perception takes a long time to turn neutral and or positive. Consider the following two companies- A & B. A is a Billion $ Indian conglomerate in the manufacturing industry. This company was considered to be a bellwether for the Indian economy in the 80’s & the 90’s & was a dream company to work for in those decades. The company enters the IT business in the late 90’s & till date has not been able to get its people story right for its IT subsidiary. Company B is an aggressively growing BPO, with plans for an IPO in the near horizon. The company is in such a growth inflexion (read: all’s well for us, we’re growing faster than competition) that everything else has been seemingly ignored, including the fact that the company also has one of the highest levels of attrition amongst the senior management. There have been 3 CFOs in the company in 2 years, & now it is finding difficult to appoint the fourth one.

In the case of the former, there continues to be a serious disconnect in what the company perceives of itself & the subsidiary IT company. It is unmeaning to expect its IT company to be a preferred choice for professionals unlike the parent was for the previous generation. The obvious corollary is that one cannot define roles & lineage based on incumbent structures in the parent organisation or for that matter what has been in existence for years. This is especially vital for those companies who need to develop their recruiting strategies in a supplier’s talent market. Top talent decides to take one job over another based on the specific challenges the job involves & the chance to grow further, however, with steep hierarchies like that of the parent, there is very little flexibility to break established norms- a fall out of which is that the selection criteria in Company A have been more discriminating than called for, for example- selection criteria does not allow for people with great potential but not the exact experience to easily apply, or are automatically excluded either by poorly written knockout questions or by managers that say candidate must have this or that?

The case of company B is even more alarming. Despite the growth, no company can afford to ignore exits in quick succession for any role, more so for a role as critical as the CFO. In the day and age of networking, the word spreads around quickly & a situation has come where no CFO worth his weight in the sector wants to join this company & the management is hesitant to hire someone outside of the sector or promote the next in command within the company. The result: the next in command to the CFO is keen to put his papers since he feels that the management does not trust his abilities. While at the same time, the mandate to hire the CFO is being doled out to different search agencies in succession who are contacting the same set of candidates(!!), thereby making a mockery of the company’s perception in the market & compounding the issues already been talked about.

Inoptimal talent outcomes are a direct fall-out of either cases mentioned here. Employer perception is difficult to change in the short term & has a direct co-relation with what I call the ‘recruitability’ of quality candidates. A good candidate will be willing to look at company A or B as its future employer only if he has no other option whatsoever. Given the rising demand for talent, this scenario is unlikely & hence the need for such companies to get their acts together. Unless they incorporate a holistic & long-term view of talent management, thereby sending positive feelers to prospective employees at large, pulling out full page advertisements with glossy language would not help. A few Indian companies have started looking beyond the short term horizon; the author’s firm is involved in a consulting engagement with one large and well-known organization that is developing a 20-year talent pipeline!

Globally, at any stage of their evolution, successful organizations are rarely short of critical talent and rarely make a fuss publicly about not being able to find good talent since the same doesn’t exist in adequate supply! Successful firms do their homework and plan for the longer term not being blinded by need based, short term talent demands. Rather than possess a competitive advantage at a point of time, successful firms creatively churn out new ideas & rapidly adapt to result in an evolutionary advantage over a period of time.