Demand and Supply of HR Professionals

 

I am back after a long hiatus for the past month or so J

 

CII conducts a national seminar on HR Challenges each year……representing knowledge partner for this year, Hewitt Associates, as well being member of CII committee, I have been a bit occupied lately. However the forum gave several of us opportunity to talk about interesting times ahead and people challenges in wake of such scenario. The theme of the forum was aptly “The Winning HR Strategies”.

 

While in some of my later blog I will talk about summary of the discussions, one interesting challenge is demand and supply situation of HR Professionals themselves. Unless there is enough of this community (in terms of both numbers and skill sets), several of larger people challenges will remain unaddressed. Let’s have a closer look at this aspect.

 

Supply View

1        If we look at all Tier 1, Tier 2 and decent Tier 3 Business schools together and the number of HR professionals they are churning out, the number is likely to be in the range of 600-800 at best.

2        Worse if one looks at number of people with skill sets adequate to match the challenges of current environment, its likely to be 150-200. The reason I say so is because most of the others are still in traditional HR/IR mindset/skill set mould.

3        Given the reality that several of these students comprises of women, there is a drop out rate of about 10-15% out of this from active work life post marriage or children

4        Almost 15-20% of these go on to join recruitment firms or open their own recruitment/training firms

5        In nutshell we are left with about not more than 60-65% of the total 600-800 overall population and 150-200 of what you can call as premier mass available

 

Demand View

1        The demand per organization is atleast an average of 8-10 HR professionals for the Top 100 companies on BT 500 list (Top 500 organizations of country by various financial parameters), in addition to what one can probably classify as administrative staff

2        Demand for the next 400 on the BT list is likely to be around 3-4 on average

3        Demand for the next 1500 organizations is likely to be atleast 1 HR professional on average

4        At the moment it’s probably a safe assumption in organizations over the Top 2000 list, Promoter/CEO mostly or in some cases Finance person assumes HR role as well. HR in these organizations is mostly about salary increases and promotions.

5        In addition to this domestic market there is a huge demand created by multinationals operating in India. That number is likely to be close to 3-4 for around 500 multinational organizations given their more organized set up.

6        Hence purely speaking demand is influenced by Top 2000 domestic organizations and about 500 multinationals in market today.

7        By assumptions above we are talking about a demand for about 6000-7000 professionals

 

 

The overall situation looking at numbers above does not look too good for sure. Perhaps the most important element of this demand and supply situation is the fact this demand is maximum at the middle and senior level in most organizations. Gap is even more acute at that level.

 

One of the solutions to this problem in my view is “HR for Non HR”. We need more and more business and cross functional people to be trained on aspects related to people challenges. In my view not only will that improve the situation, many of these ‘inside business’ guys will go on to become more successful HR professionals J

 

What are your views on the current demand supply situation and means of improving the same?

 

~~Rohit~~

Engaging a New Employee

 

Recently I came across this interesting article/practice at Patni Computers:

 

On his first day to work at Patni Computers, 23 year old Arshad Shaikh had sweaty palms and an itchy neck. The mild apprehension of how his first day at work would be was worrying him. But, surprise surprise! A badge with a smiley face and ‘Just Joined’ stamped on it was given to him. “I can’t tell you how good I felt that day. There were unknown faces coming up to me and offering help. This practice we have, called ‘Just Joined’ is a great HR practice,” gushes Shaikh, senior analyst, Patni. “Moreover, all the process related information was shared with me right on day one to make things easier. I felt settled from the first day itself,” he adds.

 

There are numerous reports that would tell us how 70% of employees leave within the first 1 year of joining. People who stay on for more than a year have a high likelihood of completing a good run with the Company. Knowing this fact the entire period of pre-joining formalities, induction program and post joining first 1 year of engaging employee becomes extremely important. Having said that most of the companies have a ‘standard’ induction manual that’s delivered like work as usual in first week of joining etc and else everything just operates as usual for all employees. There isn’t much to differentiate between programs or ways of engaging employees as far as new employees are concerned.

 

While I have come across some very interesting practices in various organizations, I found this something very interesting….small initiative but interesting. Might be bordering more on a IT/ITES (BPO) environment though.

 

Have you come across any interesting practices in Service Industry in particular….???

 

~~Rohit~~

Consulting Life…

 

There are just as many myths about consulting as there are innumerous intriguing facts. One gets interesting and divergent view points when you talk to people connected to consulting in various capacities: young aspirants, experienced consultants, consulting firms and clients.

 

Check out my article on life in consulting from eyes of these different stakeholders by clicking here J

 

~~Rohit~~

Increase in Cost of Hiring Vs Increase in Efficiency Rate

 

We are undergoing at the moment a twin phenomenon of tremendous growth rate in the economy and acute mismatch of demand-supply of skilled talent/manpower. Owing to this twin phenomenon there has been tremendous salary increments for the last 3 years in a row.

 

In the last 3 years India has had the highest rate of increment in Asia, constantly clocking an average of close to 14-15%. This translates to almost 20-25% increment in highest performing organizations in their respective sectors. While due to inflation and other global factors have attributed to certain slow down in growth by 0.5-1.0%. We are now looking at close to 8% growth in short to medium term. However that itself is almost a tremendous rate by any global standard. Given such rate and ofcourse inflation itself we are likely to witness double digit average salary increments in the next 2-3 years as well.

 

The key question now is are these tremendous increments proportionate to increase in efficiency levels of these people; hence do they actually deserve this. Honestly my view on efficiency is these increments are hugely disproportionate to improvement in efficiency. This is driven very strongly by demand and supply situation in the economy today.

 

Some interesting aspects of this situation today are:

 

·         Demand supply relation and would take time to settle down. IT industry for example is already signs of slowing down, rather must I say settling down. We are hearing of single digit salary increments in the industry this year. This is driven as much by slow down from US, as on the fact IT industry over the past few years has invested heavily in creating skilled talent and hence increasing the pool size available (which by the way is ONLY ultimate answer to this madness anyways)

 

·         Whilst organizations might not be necessarily able to control increments completely, they are looking at alternate actions like reducing administration cost of hiring, cost of hiring, internal referrals, eliminating non value adding roles, re-looking at skill set required for doing a certain role etc.

 

·         Some organizations would yet grow at higher rate than industry average and so would the employees grow at disproportionate rate

 

·         Key safeguard for most organizations is however the fact revenue per employee in most of these organizations is growing, even though not attributable to efficiency. It’s in all probability just an outcome of current business environment and bigger business opportunity than before. In such environment if organizations would benefit with higher growth than previous years, so would its employees.

 

In summary I think increments for the next few years would continue to outrun delta improvement in employee efficiency. As organization would invest in creating larger talent pool and various industries would reach stage of consolidation, this phenomenon will settle down. We are likely to continue our leading position in Asia as highest salary increments J

 

Hence we will continue to see increments in proportion to growth in business but not necessarily similar increase in efficiency.

 

Have you seen similar trends? Have you come across interesting ways of managing this situation?

 

~~Rohit~~

Recruitment to Exit – Mapping Life Cycle

I have grown up understanding a basic concept of input, processing and output. Any value chain, any process, any methodology has these three basic features. However interestingly no one looks at this complete cycle from an employee’s life cycle point of view. Everyone seems to be satisfied with specialization in one activity in the chain.

 

There are search firms which specialize in only hiring and selection, broader people consulting firms that specialize in aspects related to employee’s life within the organization, and almost no one except to some extent internal human resource departments looks at exit part. Weird how they are all working without acknowledgement and understanding of other parts of the chain.

 

Last evening I was talking to a friend who runs a search firm in North of India and we were debating on them creating services around exit analysis for clients. At a time where talent is scarce and hiring as well as exits are taking place in large numbers it would be hugely valuable for people to start connecting more parts to this chain then just activity specialization.

 

Else I guess we will continue to look towards each other for every objective not met not really knowing what went missing. What accountability can you really create for activity delivery? J

 

~~Rohit~~