India: Cashing in on the Workforce Dividend

India: Cashing in on the Workforce Dividend

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India: Cashing in on the Workforce Dividend

India: Cashing in on the Workforce Dividend

India boasts of a massive workforce today and fact is – India will add 300 million to its workforce in the next 20 years. But there is much room for enhancing skills and Indian corporates agree that graduates from homegrown universities do not have the skills they want. With the Indian government opening doors to foreign universities, it is a welcome move to upgrade skill development. India can then not only cash in on its vast human workforce, but can also position itself as the most powerful player in the world, reports Shree Lahiri

India had been experiencing a consistently high growth rate after the economic reforms of the early 1990s, achieving excellence in several key areas ranging from IT and pharmaceuticals to automotive parts. Now, India is considered to be one of the fastest growing economies of the world, but paradoxically it is still among the countries with some of the lowest indicators of human development.

Hope for India

There’s hope for India, which is morphing into a giant on the global scene. Struggling now with its weakest economic growth in a decade, the dream is that India can finally follow in the footsteps of China and the Asian Tigers. Over the next 20 years, India, Asia’s third-largest economy will add 300 million people (the equivalent of almost the entire population of the United States) to its workforce.

A generation ago these countries made good use of their growing workforces to generate economic growth that was the envy of the world.

India’s working-age population will not peak until 2035, in contrast to China, where the working-age population topped out this year, brokerage Espirito Santo Securities says. Labour forces in South Korea, Taiwan and Singapore will peak in the next five years.

Such demographic factors offer India the most compelling conditions for economic growth the country will ever have. And the focus should be on capitalizing on the young human strength, which can be fine-tuned by enhancing the education system with the entry of foreign universities.

Foreign Universities entering India – to enhance skill upgradation

The Indian government has decided to allow foreign universities to operate independently in India, set up campuses and offer degrees without having a local partner. Foreign colleges would only meet a tiny portion of India’s demand for places, but their presence would put pressure on domestic counterparts to improve, higher education experts say.

India’s planning commission has set a target of creating 10 million more university places in the next few years and boosting funds for the top domestic universities to try to elevate them to the ranks of the world’s top 200 by 2017. According to an HRD ministry official at least 20 foreign universities—mostly from US, followed by Australia and Canada—have expressed their desire to enter the market.

Producing global managers for tomorrow

The move has been welcomed by Indian institutes, academicians, and industry leaders. Indian institutes have also been tying up with foreign institutes. Among several associations with global institutes, IITB and Monash University in Australia have a tie-up in the form of the IITB-Monash Research Academy.

Several of India’s top management and engineering institutes, including the Indian Institute of Technology (IITs), Indian Institute of Management (IIMs) and Indian School of Business, already have various tie-ups with global varsities through faculty, student exchange and research. The government’s move will further strengthen those associations and lead to exploring new tie-ups.

Indian School of Business (ISB), one of the leading B-schools in India, has been honing the skills of its students, making them world-class. Sanjay Singh, who currently heads the Special Initiatives Department at the Indian School of Business explained that ISB evolved from the need for a “world-class business school in Asia”. The founders, some of the best minds from the corporate and academic worlds, anticipated the leadership needs of the emerging Asian economies. They recognised that the rapidly changing business landscape would require young leaders who not only have an understanding of the developing economies but who also present a global perspective. “While the funding support came from some outstanding individuals and corporate leaders the academic support came from leading global b-schools like Kellogg School of Management and the Wharton School. London Business School joined as our third academic partner,” added Singh bringing ISB in line with global benchmarks.

IIT Delhi is to offer a joint degree programme with Toyo University of Japan. IIT Madras, has a joint doctoral programme with the National University of Singapore (NUS), and is in the process of forming similar associations with University of Passau, Germany, Michigan State University, and NTHU Taiwan. IIT Bombay has associations with international universities too. are primarily focused on postgraduate education and research.

Lancaster University has entered into a collaborative degree with the Manipal Academy of Higher Education (MAHE). Purdue University has tied-up with Amity. Institute of Management Technology (IMT) Ghaziabad has collaborated with Fairleigh Dickinson University, New Jersey.

XLRI has teamed up with the two noted business schools of the US and China for producing global business managers of tomorrow; it has tied up with Weatherhead School of Management of Case Western University Cleveland, USA, and School of Economics and Management of Tongji University, Shanghai, China for the residential management module.

The trend isn’t new now, but for the Indian student, it is the opportunity to earn a foreign degree in right here at home and also become worldclass.

Sangeeta Murthi Sahgal, Director HR, Bausch & Lomb Eyecare (India) Pvt. Ltd, feels that “Other than a few institutions, most other institutions do not deliver quality education”. But with Indian institutes tying up with foreign educational institutes, she believes that “more people would be able to access quality higher education within the country vs having to look overseas for degrees. The challenge I see with foreign universities is the price of higher education – they would need to look at Indian prices for this education.”

Observing that tie-ups would definitely improve the employable talent in India considering this era of globalization, Babar Mian, Head HR & Administration, PAMAC Finserve Pvt Ltd, Mumbai noted that global exposure is the best solution to create a skilled talent pool. “It facilitates international exchange of ideas and innovative thinking along with knowledge about a different culture through the programs which are normally a part of the curriculum,” he added.

Ensuring world-class quality

India needs to cash in on the power of its massive human resource, a vast young workforce that powers the economy.

Commenting on how India-bred MBAs fare in the Bausch & Lamb employee workforce, Sahgal commented that MBAs fare on par with or a little better than people with just a graduate degree. What holds the MBAs in good stead is their ability to work hard and absorb learning at a faster pace.

Most corporates spend large amounts to train the workforce, at the entry level and even at middle and senior levels too. Sahgal perceived that “the cost of training whether a graduate or a MBA from a not-so-well institute is approximately the same.” But, with the impact of foreign education that students will be exposed to in the near future, the “cost of training may come down but I see the cost of manpower going up. This is a chain reaction – if foreign institutes charge more than Indian institutes then the expectation of students is that they will earn more.”

Currently not having any foreign employees as such, Sahgal had the experience of recruiting and working with foreign employees or Indians with foreign degrees. The differences, she pointed out – “The comparison here is not the additional training but the speed to productivity. I find that those with foreign degrees (from a known institute) become productive faster. They have the ability to ask questions and clarifications, they learn and absorb faster, are able to work with diverse teams better, they have a better understanding of business environments, are more disciplined. I know that a lot of these are soft skills and I believe that the exposure to learn and build these skills happen with the methodologies used within the university.”

Mian wished “quality and quantity were directly proportional to each other when it comes to management graduates”. It is unfortunate that though every year India generates more than 5 lakh management grads, however, less than 10% are actually ready to enter the corporate world. The quality of education in the management institutes seem to have dipped and, as a result corporates have to budget costs for training. “International exposure should help in polishing the quality of students and impart skills which the corporates need in the present times. The long and the short of it is there is a huge gap in what an institute offers viz a viz what a corporate demands, said Mian quite firmly.

 

Employee engagement – call of the hour

Employee engagement and cultural alignment are the top human resource-related factors that Indian companies need to measure. In this context, Indian companies significantly differ from their global counterparts who look at talent retention and enhanced productivity to measure success.

With economy low today, how much of skill upgradation is happening in organizations? What are the employee engagement programs that organizations are involved in? Quick to point out, Sahgal elaborated that at Bausch & Lomb Eyecare, they have Engagement Teams that are run by employees themselves. The areas covered (based on feedback from employees themselves) are – Communication, Health and Wellness, Energize, & Social Investing.

“We also have a very detailed “Career Growth Model” called Career+, where the individual is in the driver’s seat and with the help of their counselor they define their career goals and work on these primarily thru Critical Experience Projects. This model is a huge success and we have been able to fill over 65% of our Frontline Supervisory positions from within,” she added.

Low economy is an indicator that we need to be prepared for tougher challenges and hence the focus is on identifying and retaining talent by all means, said Mian. Admitting that they are constantly under pressure to maintain cost with standards (and the pressure is all the more during downturn), he pointed out, “In the current year we had not only budgeted for skills- upgrading training, but also for re-skilling workshops.”

Some of the employee engagement programs at PAMAC Finserve are based on the THINK, FEEL & ACT philosophy, which is the backbone that keeps an employee engaged – ultimately boosting the overall organizational performance.“We continue to aim at becoming a workplace where no one feels burdened to be at work. Hence our key activities are around work life balance, career & growth, corporate social responsibility and work itself,” he elaborated.

Reverse migration: adds to enrich workforce in India

Reverse migration is trickling in now. On whether it will impact Indian corporates’  professional work standards, Mian explained, “ What can be better than getting the best practices implemented through the people, who have been there and seen that. I am hopeful that the reverse braindrain would not only improve the work standards by means of automation and technology, however, we would surely see a turn-around in work culture, making it ethical and completely-driven.” He hoped that the impact of reverse migration leads to improved productivity.

Migrated reversely and happy!

After spending 16 years in the US, Rajani Kasu is back in India. Having gained enough knowledge abroad she wanted to return to be with her parents. Rajani moved back to India with her eight-year old daughter while her husband was trying to settle things in US. It took some time to settle down in. But she didn’t expect much, so there was no disappointment. When Rajani came back, she had strong determination not to change herself and try to bring in change, either at home, work or outside. She believes in: “You be the change if you want to see the change”. She is happy that her nation is on positive track – like automation in few public sector companies, IT companies moving their facilities to India, better school systems with international exposure and improved standard of living. “In spite of all the challenges, internally I have the satisfaction that I’m trying hard to stand for what I believe”, Rajani says. Currently she is working for a top Fortune 100 company that is setting up wireless IT operations in India.

After completing his Bachelors degree in Computer Science from BITS, Pilani, Naveen Puttagunta left India. He worked as a Software Engineer (and later as a Product Manager) at a couple of software companies; he spent almost 11 years at Sybase, Inc. (now part of SAP). Naveen came back to India about 6 years ago and co-founded ‘Divami’ with a friend. Divami provides User experience services, as he says, “We essentially help companies (specifically, software product companies like SAP, Informatica, Marketshare) design and build great user interfaces for their products.” His reasons for returning, were 100 percent personal. “We wanted our children to grow up closer to their grandparents. My younger son was born here in India after we moved back. We felt our children would have a better time growing up in India.”

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Somanjana Chatterjee

Somanjan Chatterjee is San Francisco based consulting editor