Thursday, September 06, 2007

‘HR has come a long way from backroom to boardroom’

From The Hindu Business Line

Perspectives on people policy and its evolution in the country.

The HR exposure that India provides is unthinkable in the more mature Western industrial economies. To deliver value in the contemporary scenario, HR managers have to think out-of-the-box and innovate new practices and systems. It is this requirement that differentiates Indian HR professionals from their Western counterparts. In the developed economies,HR requirements are comparatively more stable.

Prof Madhukar Shukla, Professor, OB and Strategic Management & Chairperson, Alumni and External Linkages, XLRI.

Anjali Prayag

From support to strategic, from backroom to boardroom, from union management to expectation management — HR in the country has transformed itself to suit changing business needs. But the key concern today centres around the talent pool available to fulfil the HR roles that industry demands. Is Indian HR education gearing up to meet these changes? Madhukar Shukla, Professor, OB and Strategic Management and Chairperson, Alumni and External Linkages, XLRI, has catalysed some of the changes in the discipline. In the inaugural issue of People@work, he shares his experiences, insights and perspectives on the HR education industry. Edited excerpts from the interview:

Is HR education getting its due in India? Considering that companies fill HR vacancies with people from other disciplines, is there enough formal training for these people?

The scenario is changing for HR. While it is true that in some cases, HR roles are assigned to people from other disciplines, such instances are becoming increasingly fewer. Companies do look for trained HR professionals to handle HR roles. More often than not, if the role is assigned to a non-HR executive, the reason is not because of the quality of HR professionals, but the dearth of HR professionals.

Most companies do try to provide training to non-HR people through job-shadowing, nomination to HR courses and so on when they are given HR roles. In fact, this need has also sprouted some innovative partnerships between industry and academia. For instance, at XLRI we have two such partnerships, one with Accenture and the other with L&T, to conduct long-duration certification courses in HR. I think one of the challenges for the education sector will be to keep pace with the demand for HR professionals, both in terms of quality and quantity.

Have HR education programmes changed suitably to fulfil the needs of industry? From admin to IR to personnel to HR, it’s been a long journey for the people manager. Can you talk about how XLRI has altered its programme content in keep ing with this change?

Yes, over time, HR education has also changed to meet the needs of industry. HR has moved from a ‘backroom’ function to a ‘boardroom’ function. Educational institutions have also tried to keep abreast of these changes and have updated and revised their syllabi over time. However, I also think this is easier done in B-schools than in universities, because the former have greater autonomy and freedom to revise their syllabi. For instance, at XLRI, the faculty concerned can change and upgrade courses to make them more contemporary. In addition, periodically, every two-three years, we review the entire course structure and pedagogy of our HR programme.

We seek feedback from our own HR alumni, from senior HR professionals, other academic institutions and from industry and build that into our course structure. This has enabled us to keep our syllabi dynamic and in sync with industry needs. We have been able to include new courses, modify some existing ones and even change the focus of the entire programme. In the current format of our HR programme, besides the required HR topics, the students also get significant inputs in finance, strategy, and IT.

Where does India stand in terms of HR education and how would you rate the Indian HR manager vis-a-vis his Western counterparts?

Let me attempt this question from another angle. Some of my HR colleagues in industry say — and I agree with them — that the last few years have been and the next few years will remain, the most exciting time for HR in India. There is a phenomenal growth of the industry and new sectors — insurance, retail, telecom, IT/ITeS — have emerged, all of which are people-intensive. Even in the manufacturing sector, there are strategic moves, M&As, cross-border takeovers, expansion, organisational change and restructuring, which throw-up critical people issues that need to be tackled.

This has two implications. The first is for HR education in India where there will be a need for greater partnership between industry and academia, which, fortunately, has started happening (even though it needs to accelerate).

Besides the programmes mentioned earlier, we also invite practising HR professionals to share their experiences, cases, and practices with students. At other places, professional HR bodies, for example the National HRD Network, have forged alliances with educational institutes to participate in their courses.

The National HRD Network, for instance, spearheaded the design and roll-out of the HR diploma course at MDI, their Mumbai chapter took the initiative to provide mentoring to the HR students in the institutes and so on.

The other implication is for the Indian HR managers’ learning. As a fast-growing economy, the HR exposure that India provides is unthinkable in more mature Western industrial economies. To deliver value in the contemporary scenario, HR managers have to think out-of-the-box and innovate new practices and systems. I think it is this requirement and capability, which differentiates the Indian HR professionals from their Western counterparts.

In more developed economies, HR requirements are comparatively more stable and, correspondingly, the role of HR professionals more process-driven. In comparison, Indian HR professionals have to be innovative and build HR processes around those innovations.

Has progressive, innovative and people-oriented HR become the preserve of the knowledge-based industries alone? How is the manufacturing industry HR person different today from a few years ago?

The changes in the demands on HR are not just in knowledge-based industries. HR requirements in the manufacturing sector also are no longer what they used to be. Earlier, the primary task of HR was maintenance of the system because manufacturing companies themselves were stable, showing slow growth or change. What we see now is a spurt of restructuring, mergers, international forays through expansion and acquisitions and upgrading of technology in the manufacturing sector. In addition, there is a migration of talent from manufacturing to the service/ knowledge sector, just when the sector requires them.

In many ways, the ultimate success of all these changes and strategic initiatives depends on managing people issues. So, while HR issues in the knowledge and manufacturing sectors may be somewhat different, there is a need to develop innovative HR solutions in both. Consider, for instance, the need for cultural integration, the development of an equitable compensation package and even the alignment of policies and procedures in case of an international acquisition. Earlier, such demands were rare for HR in the manufacturing sector.

During campus recruitment at XLRI, what kind of companies get preference from students?

Well, it is still the same menu — FMCG, consulting, IT/ITeS, banking, like in all B-schools. However, I would not give much weightage to these preferences, since movement out of the first job from the campus is quite high. It is the second or third job which one should look at to conclude the attractiveness of the industry sector for young MBAs.

Your comment on the HR talent pool in the country. Is recruitment becoming the sole focus of this fraternity, sidelining other functions such as managing people’s expectations, training and performance management?

Not really, though there is a large focus on recruitment, it is with reason. With the growth of all sectors, the need for qualified and employable manpower has shot up, and there really aren’t enough such people in the job market. So, if organisations have to grow and realise the opportunities they have, recruitment is actually a ‘strategic function’ for HR. I don’t think the other functions are sidelined.

Given that there is a big supply-demand gap in the talent market, it is essentially the same set of people who keep moving from one company to another, and with an increased compensation with every move. I think, sooner or later, this trend will make the cost of talent unviable and start hitting the bottomline. I personally feel that HR should start looking not only at talent acquisition and retention, but also talent creation. That is, how do we bring in more employable people into the mainstream job market.

Any indication of the numbers (of HR people) needed in the industry; what is the shortfall likely to be and how is industry planning to bridge the gap?

I think this will be the next big challenge for both industry and academia. If we look at the employment potential across industry sectors, it is huge:

According to Nasscom, IT/ITeS will add more than one million white collar jobs in 2008; according to a PWC report on retail, the projections are about 8 million; according to a TRAI 2005 report, close to half-a-million jobs were created in the telecom sector in that year; and an AIMA 2003 report projected that tourism and IT/ITeS would generate between 20 -72 million jobs by 2020.

Most of this employment-generation is happening in people-intensive sectors. Thus, the need for a strong HR backbone.

Even if one discounts for exaggerations in some of these projections, even at a very conservative estimate we are looking at least 5 million new jobs in the next five years. And a quick calculation would show that even if we need one HR professional for 1,000 employees (which by itself is a pathetic ratio), one needs at least 5,000 new HR professionals.

On the supply-side, the situation is far from comfortable. Among the few educational institutes that provide specialised HR courses — XLRI, TISS, SCMHRD, MDI — the total number of students do not add to more than 250-300 per annum, and many of them join HR consultancies rather than industry.

This is one big gap which the HR fraternity, in industry and academia, should be worried about. I don’t think it will be feasible for educational institutions to suddenly scale up their numbers to meet this demand.

What we will need to consider are new models for developing HR professionals as a joint industry-academia effort.

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