India Inc, riding on a booming economy with 10-12 per cent annual growth, is suddenly grappling with the problem of finding the right talent to sustain the momentum in a competitive environment.
A recent study conducted by the Confederation of Indian Industry (CII) has revealed that human resource (HR) is the biggest challenge faced by India Inc, especially at the managerial, production and marketing levels due to the widening demand-supply gap.
"At a time when Indian industry is on the upswing, talent scouting and retention have become a major challenge for stakeholders. In a globalised economy, India Inc is finding it difficult to get CEOs (chief executives) and domain experts to run businesses," a top CII official said.
With multinationals grabbing Indian CEOs and Indian firms expanding their operations overseas through acquisitions or setting up new facilities, the problem of getting the right people for management, production, marketing and research posts has become an uphill task, thanks to the growing demand for the same set of people by many a firm.
"The problem is not confined to the top only, but spills to the bottom of the pyramid. In the absence of vocational training and lack of exposure to the requirements of the industry, availability of skilled workforce and managerial pool has become daunting despite a growing unemployment rate," said N Srinivasan, advisor to CII President R Seshasayee.
As in the case of services, especially in the IT sector, the manufacturing sector is set to face an acute shortage of employable people at all levels in the near future if proactive measures are not taken soon. With attrition levels catching up in the industry, retention has also become a major issue.
"If India Inc has to gear up for higher growth rate for maintaining the GDP at 8-10 per cent, the industry will have to employ millions of people across verticals over a period.
To create such a huge reservoir of human resources, the state and the education sector will have to invest heavily in churning out talented youth for direct absorption by the industry," Srinivasan pointed out.
With the majority of the youth opting for IT and BPO sectors due to higher compensation and fringe benefits, attracting them to manufacturing, marketing or managerial roles has become a challenge for the industry.
Unless the prospective workforce is offered matching pay and perks, job-hopping and attrition will become a norm.
"Building a learning organisation is critical to meet the growing requirements of right people for sustainable growth.
With globalisation and technological changes rewriting the rules of competition and collaboration, scaling human resources has become a critical function," Srinivasan added.
To address the HR issue and chalk out a strategy for creating the required workforce, the CII Institute of Quality is holding a two-day national summit on quality in education at school/college and university levels here November 16-17.
If India has to become a knowledge power and maintain rapid economic growth, its universities and research institutions have to keep pace with the industrial growth.
The summit will focus on issues involved in creating the human capital right from school to university and beyond.