How to manage talent in an era of disruption

As we enter the emerging global era of disruption characterised by a combination of parallel forces of artificial intelligence, robotics and automation, firms and businesses are faced with multiple challenges: identifying top talents with unique skill and finding the leaders of tomorrow who are meant to be looking at new solutions and offerings, redefining competitive advantage, restructuring and exercising strategic talent management.

At the same time, India is experiencing the demographic sweet spot where the working age population shall continue to increase till 2030. Without a visionary talent management ability we will end up wasting a massive potential with the long-term threat to social cohesion. The collective intellect and intensity of modern India presents the opportunity to undertake pre-emptive measures, which could enable us to contribute and benefit from this latest era of disruption.

Developing and empowering human capital to make a seamless shift and adapt to the new technology world is key to making sense of India’s huge demographic dividend. Despite the sweeping recognition about how vital it is to invest in both the quantity and the quality of jobs for youth, efforts remain fragmented and lack scale. There needs to be a cohesive plan to strengthen the workforce and enable a successful and smooth transition to the digital era. The strategic management of human resources is critical both at the national level as well as at an enterprise level in this era of disruption.

India ranks 51 among 63 countries in IMD World Talent Ranking 2017. This has improved marginally from 56 since the ratings started in 2013. China has shown greater improvement from 48 to 40 during this period. An integrated talent management plan for a country like India faces some structural challenges.

First, there is an ongoing huge migration of talent from the north to the south and west of the country, which account for 70% of job opportunities. While some internal churning is good news, adequate gainful opportunities in the north and east of India is important, especially in populous states like Uttar Pradesh and Bihar.

Second is the issue with vocational education and skills. A credible and robust skill ecosystem needs to be put in place urgently, so that vocational education becomes aspirational and contributes to manufacturing and trade services growth. It is no coincidence that Switzerland, Austria and Germany, which have robust forms of dual vocational education systems, figure in the top 10 of the talent rankings every year.

Next, India needs to set aside adequate financial resources for education and healthcare. The Reserve Bank of India’s own assessment report on expenditure, published this month, says: “The social sector expenditure, primarily constituting health and education, in India continues to remain woefully below peers.” Social sector spend stands at 7.5% of GDP, which is lower than all OECD countries and most developing countries. Finally, we have to find ways to increase female participation in the labour force, which is way below global averages.

Technology in the form of AI, IoT, digitisation and automation is impacting all industries and enterprises, transforming business processes and impacting productivity drastically. A new paradigm for a successful enterprise of the future is to build scalable and sustainable talent acquisition, development and retention programmes. Fast-growing Indian businesses need to engage skills and mentor talent, and channelise their entrepreneurial spirit.

However, in this era of flux, leaders and HR managers are faced with twin challenges. One can be a bit too late in capturing the trend and risk becoming outdated in the marketplace, resulting in loss in competitive edge or customer centricity. Every CEO has an added responsibility of keeping up with the technology prowess of the firm’s human resources. However, this is easier said than done, with every available channel of communication busy analysing how much of the workforce shall become redundant due to these technologies. At the end of the day, the leader at the helm has to identify which one of the disruptions shall have a lasting impact on business and merit immediate management attention and investments.

The second challenge, which is equally significant and less appreciated, is over-exuberance in pushing through fancy ideas which could cause an unnecessary churn in well-entrenched departments or personnel dedicated to specific roles. The job of a CEO and HR manager is to balance these two aspects and build a robust and dynamic environment while ensuring broader stability of the workforce. A cardinal guideline of managing this situation is putting the customer at the centre of the thought process while devising skills and workforce development strategies. In addition, enterprises have to be mindful of allocating adequate resources to invest in innovation. Irrespective of business growth and economic cycles, workforce agility has to be ensured with a heavy dose of motivation, training and continuous learning. Having an agile work environment that can reinvent itself is necessary when the future is uncertain.

Rana Kapoor, MD & CEO, Yes Bank

The views expressed are personal