Not yet, but it wants to beâand hereâs why they might get there
By Michael Switow
Standing at podiums in front of business audiences throughout the late â90s and early 2000s, then CEO and Chairwoman of Ogilvy & Mather Shelly Lazarus used to tell executives about the clearest brief she had ever received from a client, Indian Finance Minister P. Chidambaram. âWhen people think of India, I want them to think software, not elephants,â Chidambaram told her.
Since then, Indiaâs information technology industryâwhich includes business process outsourcing (BPO) and I.T. Servicesâ has skyrocketed, accounting for more than seven percent of GDP, generating revenue of nearly US$150 billion annually and employing nearly 3 million software developers. Some analysts believe India will overtake the US as the largest employer of developers in the world within three years.
Now, Indian Prime Minister Narendra Modi is upping the ante.
âIf China has emerged as the manufacturing capital of the world,â Modi recently said, âIndia can become the human resources capital of the world.â
While Modi didnât set a timeline to accomplish this feat,â¨heâs banking on whatâs commonly referred to as Indiaâs âDemographic Dividendâ. Industrialised nations are getting older. As Baby Boomers and the PRCâs one-child parents retire, the size of the working age population is dropping in China, Japan, Europe and the United States. But nearly one- third of Indiaâs 1.2 billion population is currently between the ages of 10 -24, according to a United Nations report. India is also on track to surpass China as the worldâs most populous country by 2022.
âIf we look at the huge human potential that India has, the Prime Ministerâs goal is definitely achievable,â says
Shelly Singh, the co-founder and chief business officer of PeopleStrong.
âI think itâs very realistic,â agrees Sreenivasa Rao Yadavilli, the Pune-based managing director of Futurestep India. âAs most of the world grows older and India stays younger – given mobile devices and the âcloudâ, a lot of services can be delivered from anywhere in the world.â
âAs sectors like health care and financial services continue to grow, India is best poised to be able to supply the human capital for the work,â he adds.
It will take more than a youthful population, though, for India to be able to provide the worldâs human resources. First, it will need to overcome a huge Skills Gap. Nearly thirteen million Indian youth join the workforce every year, but only about 1 in 3 are considered âemployableâ, according to research conducted by the Confederation of Indian Industry, LinkedIn, PeopleStrong and Wheebox. The figures are even worse for engineering and MBA graduates, with only 17% and 10% deemed employable in 2014.
âThis is a very wide gap,â says Yadavilli. âAlmost every firm, including ours, trains graduates and post-grads after we employ them.â
âMost of the corporates who hire have some sort of bridging programme,â agrees Pradipta Bagchi, the head of global communications for Tata Consultancy Services (TCS), which hires about 55,000 professionals every year and has a global staff count of nearly 325,000. Most of TCSâs recruits are in India, but they create programmes and software architecture for brands across the globe, including Chrysler, Sony and Singapore Airlines.
In addition to a 90-day training programme for new hires, TCS spends time and resources in universities across the country. Itâs created a LinkedIn-like social platform for engineering and computer science students to interact and access white papers and articles about TCSâs technologies and areas of work. Students can study the materials at their own pace and test their comprehension with online quizzes. TCS also trains professors to ensure theyâre fluent with the latest concepts in software engineering.
âWe have invested quite significantly to set up strong linkages with universities and engage with students on multiple fronts,â says Bagchi. âThis helps us pick students who are motivated, passionate and hungry to learn.â
In some ways, India already is a human resources capital. âIn the â80s and â90s, companies like TCS showed that we can leverage Indian engineering talent and do the same kind of work in a more efficient fashion. So now thatâs become the mainstay of the entire global industry. Name any big tech firm, the talent is here,â says Bagchi.
Indiaâs media is filled with headlines of companies making new investments in the sub-continentâand not just from the tech world. The worldâs largest cereal maker, Kellogg Company, is opening its first Indian R & D facility to create foods that cater better to Indian taste buds. Taiwanese electronics manufacturer Foxconn is investing US$5 billion to build factories and fund research. Twitter is opening an R & D centre in Bangalore, its first outside the US.
âTwenty years ago, you would have hardly seen Research & Development. Look at it today – Mercedes-Benz, Intel, Cisco, Google, Facebook – they all have set up R & D centres in India, which require jobs with high-end capabilities and skills,â remarks Yadavilli.
Indiaâs Prime Minister is no longer content to leave skills training to the corporate sector, though. His governmentâs plan is to create skilled professionals across the workforce. New initiatives aim to provide vocational training to 400 million youth over the next seven years.
If the plan is successful, the impact on Indiaâs human resources industry could be huge: legions of job-ready professionals, trained to global standards, ready to work in both local and multinational enterprises, rather than in the Mom & Pop shops that currently account for a large portion of Indiaâs economic output.
Over 90% of Indiaâs workers are now part of the informal economy, lacking job security and benefits.
âThe agenda is to convert this âunorganised workforceâ,â explains Singh. âOnly a 10% change would mean a huge push for human resources frameworks – introducing technology, universal social security, new retirement benefits and schemes – they are all going to impact the HR world positively.â
(Michael Switow, a veteran B2B journalist who has worked on several continents, is HRO Today Globalâs Asia Pacific correspondent.)