The year 2016 marks a quarter of a century since the implementation of India’s landmark reforms in 1991. A lot has changed since then. India is at the cusp of start-up growth, where innovation in fields, such as Big Data, Cloud Computing, Gaming and the Internet of Things has given us a lot to choose from.
All this will hugely transform the way we live and work. In terms of demographic dividend, by 2020, India is set to become the world’s youngest country, with 64 per cent of its population in the working age group (age 20-35 years). This population will potentially rise by 12.5 crore, creating a need for almost 10 crore new jobs. While these numbers are staggering, employability remains a challenge, with only 18 per cent of this pool being placed in jobs and less than 25 per cent of engineering graduates being employable in the country.
This poses an interesting situation — a world of both abundance and scarcity. In India, attrition rates of 15-20 per cent are normal and up to 50 per cent in industries, such as IT not unheard of. The question is how to create that unique ‘value proposition’ to shape HR strategies for remaining relevant not only in terms of talent but adoption of contemporary technological interventions at the forefront.
Performance & rewards as an area of focus is shaping up to answer some of these dilemmas proactively. With the advent of artificial intelligence and predictive data modelling, organisations today can experiment with a higher degree of confidence.
Improvisations or regular innovations in traditional systems and processes is the order of the day, and while there are a plenty of success stories, the challenge that still remains is alignment with the overall business context. That said, I am sharing a few approaches that will change the way we look at the interventions in terms of cultural relevance, functional expertise and competency building.
Performance discussions: We can look at this from three dimensions. First, a shift away from an annual or bi-annual process to a more frequent manner of capturing performance feedback can help employees align their contributions to making a real- time impact. Second, companies can measure achievements with a backdrop of organisation’s goals rather than individual metrics and the third aspect will be to simplify the performance indicators. Looking at the VUCA world (Read as Volatility; Uncertainty; Complexity & Ambiguity) and linking it with ‘failure’ should propel organisations to redeploy and re-imagine their success in the short term around cash flows; top line and EBIDTA growth projections.
Reward that matters: It’s no longer just the cover of medical treatment and life insurance that employees look forward to. Peer to peer recognition, spiritual and emotional well-being, providing opportunities to create a better world around us are some of the areas employees value today. Additionally, looking at the broad canvas of rewarding both long-term and short-term results is equally critical. Organisations in the past have been mostly successful in driving the desired outcome by using vehicles, such as employee stock options (ESOPs); restricted stock units (RSUs); stock appreciation rights (SARs), etc. — but can this digital age workforce settle for something as long for wealth creation?! This group expects instant gratification for their contributions, and therefore, a short-term mechanism incentivising collaboration, cross-functional success stories, group accolades should reinforce motivation and team spirit across the organisation.
Learning empowerment: The shift will be more towards empowering individuals to decide on their learning journey, and enterprises will act more as facilitators. This gives us an opportunity to look at the concept of ‘learning CTC’, where employees are encouraged to spend that part of CTC towards capability building. With the increasing penetration of work automation and robotics, employers must provide scope for re-skilling their workforce to encounter the lag, which such advancements may create.
New generation of leaders: Organisations might have to even over-invest in creating a solid foundation for the next-generation of leaders. The average age of a first-time manager is around 30 years and the ones in leadership training can be around 10 years older. According to a recent survey, 63 per cent of workers aged 34 and below from all over the world complain that they aren’t being properly trained for leadership roles. This creates an opportunity for this young generation to search for an employer who cares for their professional development. This gap of over a decade, provides opportunities to bridge the competency deficit. Options like, customised one-to-one leadership building initiatives and creating a WOW can help achieve the desired results.
Career progression: It’s in your hands! According to a report published by a leading executive search firm, around 44 per cent of employees leave due to limited career progression and this is the topmost factor in retaining talent. For me, this is clearly a two-way process. As much as the organisation is responsible for career development, the demand to do something different or more should come from the individual. Defining a clear road map for skill and competency development can help organisations look at better retention rates — provided the employees commit to their willingness to experiment.
Most importantly, communication — a culture fostering trust, openness and transparency along with simplicity of executing the desired practices holds the key. Similar to training on ‘what’ and ‘how’, employees must understand the ‘why’ quotient to establish a connect between the offerings and desires.
2017 and onwards will bring in a phase of increased innovations and also the associated challenges as we make strides towards digitalisation. Not many will be aware of the sort of challenges we will encounter, and therefore, the ways to cope with this fanatic pace of change becomes critically relevant. As we re-engineer some of our old ways of living and working, these are some of the areas, which can help organisations take calculated risks with a high sense of accountability. India appears to be strongly positioned to face volatility and macro-economic concerns. With the falling rate of inflation and government’s push on cashless economy, the jury is still out to see how this new world shapes up and creates opportunities in this world of continuous change.
Interesting times ahead! It’s a world of opportunities for challenge seekers.
(The author is director & group CHRO, Welspun Group)