Human development and management talent have gained top attention in the new era of globalisation, with pressure on every business to show competitive results. Building and sustaining a culture of high performance is now an ever-running challenge, and the growth limits of entire economies are being assessed in the context of educated manpower and modern skillsets. Is India about to face a talent crunch? Given the acute shortage of global supplies of managerial talent, India would do well not to be complacent on this score.
Already, the shortage of highly trained personnel is showing up in the widening salary gaps between managerial and lower-level staff. There are signs that lower-paid staff, engaged in clerical work, have not benefited from the boom. According to a study by Hay Group, a global HR consultancy, India ranks fifth in the Asia-Pacific region on pay differentials between clerical staff and managers. While the pressure on higher-end delivery is intense, sustaining the growth momentum would require a wholesome mix of talent and compensation policies for the entire workforce. While India is well placed to take advantage of the increasing dominance of the ?knowledge sector? in the world economy, neglecting the need for skill upgradation in classic manufacturing and agriculture could create fissures that will prove hard to reverse. Industrial expansion and agricultural revival, in fact, would have to maximise elements of the gains made in the knowledge sphere, and so the human resources challenge in India is all the more pressing. If innovation is to be the motivating force of economic progress, then this must be brought to bear on every sector of employment. We would need farmers who are computer savvy, for example, and software professionals who can read rain patterns and offer crop diversification strategies.
In his Independence Day speech, Prime Minister Manmohan Singh emphasised educational development and healthcare, and provided guidelines for the setting up of higher educational institutions and training centres to meet the requirements of a fast-expanding economy. Economics is largely about how people choose options on the basis of opportunity costs with available resources. The future is then influenced by the choices we make on education, jobs and investment. Big investments in education and healthcare will provide long-term benefits in terms of enhanced productivity, which is what actually keeps an economy going. Already, labour productivity, according to Goldman Sachs?s Bric report, has been growing significantly faster in India and China than in Europe and the US over the last 20 years. Now, new initiatives are needed that go beyond the obvious. While India?s knowledge processing outsourcing industry is likely to capture 15% of a global pie worth $54 billion by 2010, the country must establish new markets, too, in which it can offer superior value.
First, though, we must fill the skill gaps. Chartered accountants (CAs), for example, are turning scarce because of the financial-service outsourcing boom, which is expected to touch $24.6 billion globally by 2010. Infosys? HR director has pointed out that 30% of such work outsourced came to India, and the country would need 50,000 more CAs a year by the end of 2010, ten times the number who get accreditation every year.
Globalisation goes on. But there is talk of an ?Indian HR paradigm?, too. Managerial exceptionalism, as the Japanese are said to practice, has an attractive ring to it. But we should bear in mind that HR development is about getting goals achieved, not getting special sessions on the seminar circuit. The task before the country is to identify and leverage strengths of the young growing population and provide the necessary infrastructure for training and performance to turn this huge advantage into a sustainable engine of growth. So, HR development has to be strategic. Innovations in manufacturing techniques, financial management, services and much else would be welcome. But the task of equipping India?s millions with proven skillsets must not be neglected.
?The author is with Krishna Securities. These are his personal views