Challenging Careers 2020 - Key Issues for the HR Manager
Posted in Human Resources Articles, Total Reads: 1543
, Published on 16 March 2015
“Achhe din aane waale hain” - the economy is looking up, and things are changing. But what makes India the ideal torchbearer of development in the world will be its people. India is all set to reap its demographic dividend – the 20 to 30 years where most of her population will be young and in employable age. The average age of the nation will be 29 years by 2020 and India will contribute to 28%of the world’s workforce. Another moiré astonishing fact is that China will be exiting is demographic dividend at the same time, when India is entering that period. Thus, it will be people and the labour economy that is all set to propel India’s growth.
However, in this equation we face a greater problem. Only 2% of our manpower is skilled and if organizations were to reap the benefits of this ‘great demographic phenomena’ the change needs to be driven by HR.
In the course of this article we take a look at why HR will be the most challenging careers in the run up to vision 2020 and try to explore the biggest opportunity areas that will lead to making the impact.
A Bird’s Eye View
NSDC has a projected requirement of 347 million (skilled and unskilled) professionals in high growth sectors in India. 12 million people will be joining the workforce every year over the next decade. Our country has a total training capacity of 4.3 million, which contributes to only 36% of the workforce entering the market.
Currently the nation faces a challenge of imparting employable skills to its growing workforce. A major challenge is the quality of students passing out from educational institutions. Only 20% of the engineers passing out after engineering are readily employable.
This poses a serious threat to organizations as by 2020, India will face a shortage of 13 million medium skilled workers.
On the Policy Front
When the government first realized the demographic dividend, it formulated the “National Skills Policy”, which set a target of imparting skills to 500 million people by 2022. The Prime Minister’s National council on skill development is the body that is leading the implementation of this policy.
The sector skill council, a model taken from the United Kingdom has helped in addressing human resource gaps in the country.
Focus is on improving the employment exchange system in the country. And a total of 8703.2 million INR has been spent on projects in the PPP domain, which aims to accommodate 42.428 million trainees over a period of 10 years.
Multiple agencies are involved in driving skilling initiatives. 17 ministries, 2 national level agencies and 35 state skill development missions are among those leading it. They have the potential of fulfilling the skill gap.
Whatever the government is doing may look good on paper. But, the ground reality is that we are facing an acute shortage of skilled workforce and lack of opportunities to attract them from the unskilled agricultural work. This has forced organizations to take things into their own hands and fend for themselves.
Where does the opportunity lie?
Estimated Industry growth rate figures for the Industry present an optimistic picture, 6 out of 21 high performance sectors identified as a part of various study forecast a CAGR of over 10%.According to a FICCI report Industries that are labour intensive and will drive the labour economy are:
• Auto and Auto Components
• Building and Construction
• Textiles and Clothing
• Transportation and Logistics
• Food Processing
• Handlooms and Handicrafts
• Gems and Jewelry
• Leather and footwear
Major Challenges that HR managers will face in the near future are:
Skilling for Your Job
It is imperative that there will be an acute shortage of skilled labour in the market. And the government may not be able to do enough for meeting the skill gap. Thus, to grow organizations need to develop their own framework and fend for themselves. The key will be catching them young, and skilling through various initiatives built in at the school, college and diploma level. The HR manager’s responsibility will be to recognize the skill gap, build relevant talent matrices and a sustainable talent pipeline.
The private sector has already been taking initiatives to skill for their jobs. They have established training facilities across India to offer world class education. Some of the key initiatives are listed below:
Table: Training Institutes setup by Corporate
Construction Skills Training Institutes
Ahemadabad, Bengaluru, Panvel, Chennai, Hyderabad, Delhi and Kolkata
Vardhman Training and Development Center
George Telegraph Training Institute
ICICI Manipal Academy
Indian and foreign players alike have been tying up their CSR activities to impart skills to the youth. Fiat India launched its initiative Diksha, Volkswagen focuses on empowering local people, The Mahindra Pride School provides vocational training and OP Jindal group provides scholarships. Each organization is developing its own strategies to meet its needs. Thus, the HR must be proactive in planning for these needs and ensure that they are met.
Getting them don ‘My Blue Collar’ – Attracting talent
Attracting and retaining the right talent in the blue collar workforce will be a big challenge in the future. With Industrial belts constricted to smaller towns, it is a highly competitive market. Setups like the Bhushan Steel and Jindal Steel plants located within kilometers of one another in Angul, Odisha, will generate opportunities for HR managers to attract the right talent or rather potential talent and groom them. Managing the increased bargaining power of the labour will be a cumbersome task in the future.
Fiat and Volkswagen follow a very unique practice to attract the right kind of talent. They train the principals of schools in nearby areas to identify special sets of competencies among students. Once identified the students are picked up as early as 10th standard and enrolled in diploma courses. These lead to their subsequent employment in these automobile manufacturers.
The most difficult balancing act – Contractual Workforce
The rampant employment of contract labour has landed the industrial community of India in a catch 22 situation. In the wake of watertight labour laws prohibiting any kind of termination, organizations floated Voluntary Retirement Schemes left right and Center. Least did they realize that these schemes were cutting into the flesh of the organization and kept the fat intact. We are currently facing a situation where the contract labour has a potential to hold companies to ransom. With a leading corporate house running on 45,000 contractual workers, the situation is serious. The absence of privileges to take disciplinary action against them, participate in direct dialogue or supervise them directly makes matters even worse. It is an explosive situation for most organizations, and strategic Human Resource Management is the only way out.
It’s in the law – Managing training legislations
Apprenticeship in India is governed by the Apprenticeship Act, 1961. It makes it mandatory for organizations to hire apprentices in the ratio of their workmen. However, the current size of facilities to provide apprenticeship is very small hen compared to the requirements. For an organization to skill its own workforce, it is very important to bring training facilities under the watchdog. For private organizations to hire apprentices, it is essential to get approvals from a wide range of authorities and states. The regulations are governed by a myriad and complex set of rules. Hence, managing compliance with training legislations will be a key opportunity area for Human Resource Managers.
Managing Special Legislations
HR education in India needs to align itself to the needs of the market, as currently legislations that govern particular industries, like the building and construction workers act. Compliance and management of workforce under such special conditions requires impeccable skill and perfection in interpretation of statutes to stay out of trouble. Judgments like the stay on termination of a TCS employee bring another question to the table. Are we looking at a huge untapped sector where compliance to legislation needs to be driven by the human resource development? Thus, it becomes quintessential for HR managers to look out for such opportunities, and stay ahead of the times.
With major challenges at their doorstep, organizations as well as the nation will find HR leading the revolution for reaping India’s demographic dividend. With a lot of work to be done at the grass root level, it is high time that Indian HR fraternity opens its eyes to these challenges and takes them head on. After all they will be enabling – ‘shaping India’s future’
This article has been authored by Tarun Kaushal and Varnika Tewari from XIMB
Skill Development Sector Profile, Nitin Jain, FICCI, www.ficci.com
Reaping India’s demographic dividend – industry in driving seat, Ernst and Young and FICCI, www.ficci.com
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