Is India's over-a-billion population a talent hub or a cesspool of unemployable people?
According to a 2005 McKinsey study, only 25 per cent of our engineering graduates, 15 per cent of finance and accounting professionals and 10 per cent of professionals with any kind of degrees, in India, are suitable for working in multinational companies.
If perception is reality, then perhaps we have reason to be despondent.
The demand curve
• McKinsey says only 25% engineering graduates, 15% finance & accounting professionals, and 10% professionals with any kind of degree are suitable for working in MNCs
Corporate India will create 10 lakh new jobs this year. In the next two years, India needs to find around 500 to 750 CEOs and another 10,000 functional leaders. If that is the demand over the next two years for business leaders, one can imagine the humongous demand at middle and lower levels.
K Sudarshan, managing partner at EMA Partners, an international CEO search firm, (who also provided the above estimates), says: "There is a huge gap between demand and supply for chief financial officers (CFOs) and human resources professionals—both leaders and professionals down the line."
"Information technology and BPOs are emerging and growing industries facing huge employment pressures. The financial service sector is also witnessing the arrival of new players. Manufacturing will see a huge churn as senior managers who started in the 70s reach retirement age. Life sciences and pharma are growing too and a crunch is inevitable," Sudarshan adds.
At the entry level, Sudarshan feels that shop-floor engineers are a real problem as many of them are moving to finance and management. "And today, with spouses working, many engineers are not ready to move to remote locations."
While the seniors level problem is taken care of with expats coming to India to fill in the gaps, what is the solution at the entry level?
Satish Pradhan, executive vice-president-group human resources, Tata Sons, in fact, sees no talent crunch. "India has the largest population in the 15-35 age group and this volume is growing fast. We have a large raw feedstock of talent that we just have to train," he says.
K Ramkumar, head of human resources at ICICI Bank, adds: "Talent crunch happens when the economy grows with an ageing population—unlike in India where two-thirds of the population still has 30 years of productive life left."
Ramkumar blames consultants for coining the term Human Resource crunch. "I agree that there is no readymade talent available. Therefore, it is up to organisations to train the fresh talent so as to be able to retain them in the future," he adds.
ICICI Bank spends 1.5 per cent of its profits on training and has nine training centres across the country today. It employs 30,000 people and recruits 15,000 people annually.
Sudarshan agrees: "It depends on how much time the MNC has spent in India and how long they want to be here. For someone like ICICI, constant hiring and training is a part of strategy. Not so for an MNC setting up shop with 50 people."
Monisha Advani, CEO, Emmay HR, adds a new dimension: "Our system delivers English-speaking graduates but fails to add the fine print on a diverse range of quality. We face the danger of superficial hires that fail to meet both employer and employee expectations. High attrition is an outcome."
She adds that the onus of creating employability also lies on society at large. "We cannot overnight achieve western type work-styles that have come through generations of societal development," she adds.
Considering that India, according to an HR industry estimate published in October 2006, will have 47 million surplus employable people by 2020, professionals agree that it is time for some HR value addition.