Companies turn employee risks such as attrition, employee costs into opportunities
The Economic Times
People & Organisation, Advisory Services, EY
The government may have scaled down the forecast for GDP growth rate owing to monetary tightening and the slow growth momentum in the West, but the Indian growth story is still credible. And even as India Inc treads on an uphill road, the risks associated with talent continue to remain relevant.
Indian organisations are exposed to three critical talent risks, according to a recent EY survey. The first is employability risk, or attracting the right talent for the right role. Despite being labour surplus, there is an apparent talent inadequacy in comparison to the business growth that is transforming the industrial landscape.
The numbers thrown up by the survey show that about 80% of the Indian workforce does not possess identifiable marketable skills; only 25% of professionals are considered "employable" by multinationals and the difficulty of employers in India to fill job vacancies has increased to 67% in 2011 as compared to the data from past years.
The second is attrition risk. In spite of early warning signals indicating an impending slowdown, most employment metrics continue to indicate that the war for talent is still fierce. This risk is not just restricted to losing talent but additionally, organisations have to absorb the attrition costs. This has led to several organisations continuously strengthening their internal HR processes to hold on to their critical people and create a war-chest of talent.
The third talent risk is that of increasing employee costs. The double-digit salary hikes being continuously provided for the last few years are forcing organisations to build stronger mechanisms to keep employee costs under control.
Contrary to the erstwhile practice of talent management, where the various elements of managing talent were operated in silos, many organisations are now transitioning to an integrated talent management strategy, which has cross-linkages and is aligned to strategic plans. The important levers of an integrated talent management strategy encompass the entire gamut of attracting, engaging, building, leveraging and retaining diverse talent.
In terms of addressing the risk of attracting employable talent, many organisations from across sectors are exploring opportunities such as tying up with educational institutes to introduce curriculum aligned to the requirements of the industry, adopting government-owned Industrial Training Institutes, setting up large training infrastructure and creating a network of trainers to build skills internally, inducting students as interns to enhance their practical exposure needed before joining the industry, etc.
For managerial talent, companies are ensuring they identify a set of management and engineering institutes and run a focused and continuous campus brand-building programme to be able to attract the right talent. Many organisations are also experimenting with channels such as the social media to reach out to their target talent audience.
Organisations are devising retention strategies by understanding and answering certain key aspects about their target talent, first being "who" they want to retain. Secondly, "what" are the components that employees perceive as important to stay in the organisation.
Organisations are continuously identifying the requirements of their key talent and aligning their HR practices to enhance the value proposition they provide to employees in those specific areas, typically identified as: role, career, benefits, compensation and culture.
In addition , many organisations are planning "how" these retention strategies can be implemented and executed with both short-term as well as long-term perspectives. Organisations today are making sure that any ongoing retention plan encompassing the entire gamut of HR areas identified here is in alignment with other HR systems and practices to ensure effectiveness.
To manage the cost risk, many organisations are experimenting with flexible workforce arrangements. Organisations are also investing in building internal capabilities for developing technical expertise in specific domains while reducing dependence on higher cost external hiring.
In hindsight, the most critical talent risks faced by an organisation in a complex economic scenario are presenting opportunities to launch robust integrated talent management mechanisms that, if leveraged appropriately, will not only help to mitigate talent risks but will also help catapult the organisation on to a higher growth trajectory.