Tuesday, March 13, 2007

Talent Trap-The Cost of Development ?

Yesterday after work, I had logged into my system and had a G Talk conversation with a former colleague of mine (Mr J), who is a very senior manager in the manufacturing sector. He quit his job a couple of years ago and took up an international assignment. In the next paragraph, I am replaying the conversation without getting into the exchange of pleasantries and trivia which approximately took approximately five minutes
Mr J:……….. you know my nephew ….the young chap you met when you came to my home ……has decided not to pursue higher education

I was quite surprised , I had spend a couple of hours with this kid (J’s nephew…) and the entire conversation was about his studies and how he wants to set himself up for success by pursuing a good degree and thereafter an MBA from a top tier school …….

Me: What happened to him? …he was supposed to do a MBA …….why did he quit….

Mr J: God only knows, he has joined a KPO and is getting paid well…he tells me that’s where the future lies and not in traditional education …….. his peers from college have joined the same place …this company came to campus and …….that’s that

Me: You mean bright kids now opt for a career in KPO’s and then don’t want to pursue higher education …

After the conversation I called up some HR Managers and recruiters in the KPO business, and to my surprise they confirmed that they have started picking up smart college graduates to work for them as Junior Analysts , according to these people it made good sense to get the number crunching done by lower cost resources and hence this shift in the recruitment pattern . It sounded very logical to me, however I quizzed them on career management plans for these young people. As I would have expected , HR was too busy in hiring and on boarding them and had no time to think about career management….This was exactly the genesis of this post ….the unintended consequences of development.

As a country we are in the midst of a transformation ,shedding our image as a backward, centrally controlled economy to a nation with one of the best talent pools with a very favorable demographic profile (Nearly 60 per cent of our population between the ages 15-59, and more than half below the age of 25. In contrast, countries including the US, Europe, Japan and China have a more aged population with dependency ratios likely to increase over the same period) ……but are we slowly and surely getting caught into what I call a “talent trap”…..

The Talent Trap

The Talent Trap is a situation wherein the best of our college grads get attracted to KPO jobs and do not pursue higher education…which creates a fundamental void in the pipeline for managerial jobs. What could possibly happen in the next ten years, the attractiveness of the KPO industry as an employer would reduce (higher automation, process improvements, would gradually take away the knowledge component of these jobs and make it boring –like a BPO job) and therefore these bright kids of today (in absence of proper career planning by their employers …which I suspect is what is going to happen) will land themselves in a situation where their employability would reduce. As a consequence the nation would have lost a lot of bright young minds, and the young people would not have any meaningful careers to look forward to.

To put the talent trap phenomenan in context, I had posed this question to a global executive whom I met after three years in Mumbai this Sunday (11 March 2007). He recognized the issue and his response was that this happens in developed countries, there are lots of examples in the US where people choose not to go to Wharton or a Harvard and pursue a stress free career all their lives. I agree that this happens in the US, but the contexts are different:

a) India’s currency to development is its talent, and the right kind of talent doing the right kind of job. Which this essentially means is that the best of our brains should pursue higher education and contribute differentially than others in the process?,while I support the HR initiatives that NASSCOM is taking to improve the quality of the workforce for the classical BPO operations (NASSCOM Assessment of Competence (NAC),Certification Program for Frontline Management etc ..), these KPO hiring have a large impact on the competitiveness of the nation .

b) The context of US and India are a bit different. As a developed nation US can probably afford to have a percentage of its brightest college grads take up “easy” jobs, which is a choice that an informed individual is making in that county. However as far as India is concerned ,I am not too sure if the young kids are making an informed choice , they are attracted by the money , the fancy name that they work for , and the team parties that are thrown occasionally , for them it’s a good happening place to be…who cares for education anyways ….. are we converting the best talent into mediocre people by this process…!!!

c) It makes eminent sense for the businesses to hire such people (cost advantages …) in the short run, but it sucks away the cream of talent thereby depleting the managerial pipeline of the nation. I also recognize the fact that these venture funded KPO’s need to manage costs and show performance on a quarter on quarter basis , but in the long run it's going to land itself in a situation where it would have a workforce which is demotivated and expensive ( considering the hikes that are given in the sector..) hence the question that I would like to pose here is “does it really make business sense , in the long term to hire such resources ,though there are obvious gains in the short run…”

So where does all of this leave us , assuming that hiring bright minds for KPO jobs is a reality and the immediacy of financial pressures will make it difficult for the employers to recognize the long term ramifications of this hiring ….. the only solution lies in a structured process of Talent Development (not a fancy word , it's different from simply training ) , so that the careers and the abilities of these young people are not eroded over time ….what do you think ? , do write in …..


Shreyasi Deb said...

I have been thinking of this issue for a while.
I somehow think that the only way to manage and develop Talent in any industry, especially the knowledge based ones, is to improve their employability.I will always look for 'what's in it for me' if I have to decide whether am growing or not.
Monetary incentive as we all know is a base motive added is the wage bill burden, so it is a loss-loss proposition for both the sides.
Organisations in this space might look at the following options:
i)Develop opportunities for learning on the job (both role related as well as e-learning) so that man-hours (maybe billable for such organisations)are not eaten up.
ii)look at introducing sponsored higher studies (most old economy and services companies already do this one)
iii)develop systems and cost structures keeping in mind high attrition figures. there will be a constant churn of people leaving to pursue higher studies while freshers arrive to take their place.This one is not directly related to your talent trap point of view. However it has implications on the ability of companies to support talent management programs
iv)look at introducing re-employment opportunities once people come back with higher qualification.
For all these programs, serious consideration needs to go in while selecting nominees.

At the end of it, we must appreciate that India is a destination for knowledge process outsourcing given the overhead cost advantages. [atleast under-graduates hope to land themselves plum jobs which was unthinkable even half a decade back.] If we cannot service that, then it will anyway not serve the economy as long as we do not move up the value chain in outsourcing. Some behemoths like GM,GE,DuPont have started outsourcing high-end research but given our infrastructure we have a long way to go. it is easier for them to suck specialised talent to their age old research centres.

diva said...

hey horrible to know the facts about KPO........what can we do? noting in our hands i think........

Aman said...

I think each individual is responsible for his/her growth. There are a lot of courses available (eg executive MBA etc.). Some of them are also offered in collaboration with karge BPO/KPO companies where the employee can study and only has to pay 50% of the fee. I guess the intiative has to be taken by the individual.

~Nayan~ said...

nice post

Norman Heel said...

I appreciate views of the blogger and fellow commentators, but I can see a boil in future. The sole reason for this is rise of plagiarism, hackers and stupid outsourcing companies in India.

I like to give one fair example on how a stupid hacker called Ankur Patel has been projecting himself as KPO Company :)

He has copied every bit of contents from a fairly older company called http://www.kpoweb.com and edited his old site at infotrex.com Word to word and same service.

Any smart outsourcer can understand how to check that.

My point is how Indian Government is providing safeguard to companies of USA or UK until and unless they cant save there own companies??

People like Infotrex or Ankur Patel are definitely not going to help small business. When their base is on stolen Idea or stolen contents, How one can sure that the services hire from India will be a safe investment??

Why Indian Government has not helped KPOWEB, despite the organization head is an disabled person and helping a lot of handicapped people to join the KPO Industry??