Economists of all hues and shades would agree on one issue. It’s that the india story is generating this level of global interest mainly because of its sustainable competitive advantage : the demographic dividend. And if it sounds like jargon, rest assured it’s nothing more than the advantage our country has in terms of a large population of young people (in the working age group of 15-64). The 2007-2008 Economic Survey found that 68.4 per cent of the population will be within this age group in 2026, up from an already high base of 62.9 per cent in 2006.And that is saying a lot, when we compare it with the large sections of the older populace in China, Japan or South Korea, which will eventually erode the low wage advantage in many of these countries.

But will this necessarily turn out to be an advantage for India? No one can say for sure. Amidst this euphoria, a fact that we are conveniently overlooking is that this huge, young workforce could become more of a liability rather than an asset without proper, customized training at different levels of their career. In fact, this realization has set in rather late, going by the number of freshers who, after years of formal education, are branded brusquely as ‘not yet job-ready.’ by their employers. Where does the fault lie?

India Incorporated could do with a bit of introspection, too. Not too many in the corporate sector realize that the missing link that could make employees eminently job-ready is customized training—training programs that are structured not only taking the unique needs and cultural set-up of the organization, or the needs of different functions within the organization, but individual competencies and aptitudes, as well. And this applies not only to the entry stage, but to every stage of the professional life cycle. For middle aged employees it means crucial upgradation in their skills that could make all that difference between competency-building and redundancy.

The benefits of multi-level customized training are obvious

• Higher productivity at all
• For freshers, it means better integration with the company
• For mid career employees, it means crucial upgradation of skills
• Higher Return on Investment (ROI) for the organization
• Awareness on the part of employees about a company’s specific needs and culture
• Cutting down in terms of time and expenses on ‘one-size-fits-all’ training that is not relevant to all employees
• Gaining an edge over competition

And these are just some of them.

There is another reason why there needs to be a tectonic shift in human resource training. While the fast-changing and competitive global markets have seen mercurial  business cycles and short product life cycles for some years now, post-recession, ongoing employee development and up-skilling has become even more of an imperative as organizations penetrate into new markets and try to extract the maximum value for the capital they have ploughed into operations. For this, they need to recruit employees who can hit the ground running. That formal education cannot deliver the goods is now a reality. That is where flexible training modules come in. Their objectives supplement formal education, filling in the gaps in soft skills such as communication, leadership, initiative, aptitude, practical know-how, workplace realities, and other areas where formal education contributes next to nothing.

Industry analysts talk about the feverish haste with which the corporate sector is now tying up with training institutions to cope with changing needs. A very major challenge today is the breakdown of the traditional top-down model in the corporate sector, where earlier, freshers, after entry, had all the time in the world to take over gradually from their seniors. After the recession, ‘gradualism’ has become history. Add to this the ability variance across teams, regional disparity challenges from the opening up of non metro markets and the heterogeneity of geographically –dispersed  employees, and it should not be difficult to understand why divergent customized training solutions are such a necessity-- even internally-- within organizations that are cross-cultural, at all levels—from entry stage to a later stage, as well.

Yesterday I was chatting with CEO of mid size company in the IT industry. I was taking him through our product which we will be launching soon – Talent Development System. The important aspect of TDS is a powerful yet simple profiling of skills of employees in a company. Pre-loaded with skills in different functions across specializations within the functions we believe it is a cutting edge application which will enable companies to capture inventory of skills of their employees.

Suddenly he went silent during the discussion and after a while asked me – “Do you think organizations really care about skills and things like that?” I was little surprised with his question as I always felt that there was such a need for any organization. I asked why this question. He said “Ramu, you know every company fudges data on skills of their employees. When they present resumes to customers they fudge the resumes showing projects in the resumes which the employee has never done. I have seen and heard about these things even in large companies.” Thereafter we went to much deeper discussion of my own experiences.

But the fact that such a question came up makes one ask whether organizations care. I for one believe that yes they do care. Industries have changed in the last two decades. IT industry for one has matured significantly during this period. The HR practices in the leading organizations have evolved to create some of the best HR practices. These include inventorying and developing of skills. But having said that I believe that same level of maturity in the practices which one would find in the leading organizations may not be seen in the medium and small sized companies – which form the large portion of the industries. There are a number of reasons for this partly business driven, partly inadequacies of the HR function itself. But the question is whether organizations want to invest in the moving up the value chain. I firmly believe that organizations want to.

I for one believe that it is the not the headcount which matters but the inventory of skills these headcount possess that matters. Without having a proper scientific inventory of skills how can one manage a company when the fundamental driver of businesses is the talent of people.

I guess the problem is not whether organizations care for inventorying of skills but how do they do that. Well, our solution - TDS - should enable these organizations. Hang on, it is coming soon.

Training needs of individuals are closely tied to the career plan of individuals. One’s career plan may emerge from temperament or aptitude, aspirations and opportunities.

Opportunities can be viewed as those within the organisation and those outside the organisaiton. An organisation which is seeking to rotate its staff between different verticals or technologies or service lines gives opportunities to the staff therein to take responsibilities in new area. Or organisation planning to promote or give additional responsibilities (a larger team to handle, a bigger territory, a higher P & L) gives opportunities for one to develop or put to use ones higher levels of proficiency in those skills. Organisations which are having business plans to grow non linearly (through opening up business in different geography, starting new product or service line etc.) provide opportunities to individuals to get involved in different skills or further specialise or gainer richer experience in their capabilities.

Thus an understanding of the organisation plan does help in clarifying to one what the future opportunities for one could be and prepare oneself to capitalise on these roles. From a different angle the same becomes the responsibility of HR or managers/leaders in the organisation – providing visibility for the upcoming opportunities to their staff and helping them prepare to capitalise on the emerging opportunities.

The choice one would make with regard to the opportunities are closely related to the aspirations and aptitude/temperament of an individual. Career plan could be from different factors as has been described in the panch marg of career paths. The five themese therein include:

1.       Larger
2.       Deeper
3.       Wider
4.       Newer
5.       Different

1.       Improving proficiency levels in the current capabilities and/or
2.       Developing capabilities in new skills areas

Training needs emerge from all the above

In the 3D capabilities profile we have four areas of skills – functional/technical skills; behavioural or soft skills; business/managerial skills and avocational skills. One could explore various possibilities by drilling down each of these areas. One can see the wide range of skills in different functions and specialisations. These help in identifying areas one may want to get trained to further enhance ones proficiency in the said area and also identify the newer areas one may want to get trained in.

We go to a doctor when we are unwell. What does the doctor do? First, the doctor asks us several questions on the state of our health, how we are feeling, etc. If required the doctor then asks to get some tests done such as X Ray or blood diagnostics and so on.

The same is true for a financial counsellor. When one goes to a financial counsellor to take investment advice, the counsellor first analyses the “as is” position – current earnings and current savings and then analyses our temperament – our risk appetite, our lifestyle etc. He then uses his knowledge of the various financial instruments, their behaviour, pluses and minuses and makes us recommendations.

In short any consultant or a counsellor does two things – one diagnosis and then prescribe solutions.

The same should be or is true for HR specialist. We are expected to diagnose and prescribe solutions to individuals and organisations. When an individual approaches a HR specialist for advice on career development, the HR specialist should be diagnosing the “as is” state of the individual’s career and its related aspects. These would include the kind of progress the individual has made so far, the capabilities one has built, the aspirations of the individual and so on. Then the HR specialist is expected to prescribe solutions for the individual. The prescription comes from the HR specialist’s knowledge of the talent market, the pros and cons of various options, industry analysis and so on. The prescription has to be tailor made to the individual’s psyche or personality and specific to the individual. What works for one will not work for another. For instance, one who is looking for security and stability and is risk averse maybe advised to look for options within one’s industry or even company.

1. Good analysis of the individual’s as is state – hard (for example achievements, experiences) and soft (temperament, aspirations)
2. Good understanding of trends and behaviour related to the market dynamics and
3. Tailor making prescriptions for the individual or organisations

HR personnel need to be real custodians of latest trends and market behaviour. In my view there is little conscious investment by HR folks in this area because of which they are not able to assert themselves in the same manner that medical professionals are able to do in the field of medicine and financial counsellors do in the field of finance. Talent should be nurtured as the core domain of HR folks and if they need to establish themselves as such then their richness, comprehensiveness and awareness of latest trends should be as it is for specialists in other fields.

In today’s era of talent I find it important for people to gain mastery not just in one skill but in more than one, at least in two. Well, this may even be a necessity.

During the course of creating our website/portal ready I was looking for people who could create our website. Our technology partner are adept at creating the applications but creation of the front end / UI / design is not there forte. I went about looking for people who could create the UI or do the designing for us. I faced many challenges in the process. There were people who were adept at the tools and technology – html, photoshop, coreldraw, CSS and so on. But the problem with almost all these people were that their aesthetic senses were very poor. The designs they created were very poor in quality, they were not appealing, the human element in the designs were missing. So here was a set of people who were technically good but poor in creativity. Then I found the other set of people who could do the creative part very well. They were able to absorb the concept create visuals, the colours, contrasts and layouts were very appealing but they would not know how to turn them into web pages.

The ideal person would have been those who had the aesthetic or creative abilities with the technical skills.  This is what I call by being skilled in multiple faculties. Is it about yin and yang in skills? Is it about the well developed right and left brain? Maybe.

We can find parallels of this case of combination of creative plus technical talent for web in other areas too. A functional specialist in a software industry has to be able to appreciate the software engineering to contribute to creation of appropriate solutions. A civil architect like our web creatives, need a combination of capabilities in civil engineering plus the aesthetics involved in architecture. A surgeon needs to be adept at the surgical practices and also the technicalities of the medical equipments. A combination of functional expertise and business skills in required for successfully running an enterprise or business unit. A good music composer also is one who is adept at sound technology.

Such combinations are rare to find. I realised this in my search for web creative person. I also believe that the same situation prevails in organizations where such combinations are required. There is a premium one would place for such multiple skills. HR, managers and leaders in companies could look for people within the organization who have the aptitude for such dual specialization and nurture them. But such spotting of talent would require out of the box thinking, a classical performance appraisal system may not be able to bring out such talent. Lets say we want to nurture the creative talent in engineers and that we would like to sport such talent. Maybe the organization could organise a competition which involves modeling, drawing, sketching, painting, etc. for engineers. On the part of the individuals when they believe that their field may require dual talent, maybe such talent can be nurture if the basics (aptitude and inclination) are there in the individual.

Realising the importance and the value of the duality of skills is the first step.

Let us look at some of the possible options before the management or leadership of the Small and Medium Enterprises (SMEs) to mitigate the challenges in talent development of their human resource.

Mapping the available capabilities in the organization to the Business Plan by taking stock of them will enable SME’s to arrive at the required capabilities. This inventory assessment exercise need not be a time consuming one. Keep it simple and short will enhance effectiveness. The managers themselves could conduct such an exercise or else use the services of external consultants or tools like the one in training orbit. Similarly, identifying the required capabilities as per the vision and the business plan will help in identifying gaps in the capabilities inventory.

The inevitable priority of the day- to- day operations may take precedence over the long- term goals, leadership is as much interested in building a strong managerial workforce with adequate capabilities, which would take the organisation to the next stage. A particular SME, diversifying into news products, services or market segments will require expertise in business development. A SME, moving into a phase of consolidation and organisation building would be interested in putting operation processes and systems in place. This would mean that identifying the personnel from within the organisation, who can be trained and then training them on these responsibilities. Thus, narrowing what is required for the future and picking up the right people for training, in these areas will help the SMEs. At the same time, it may be prudent not to attempt “the” right person for training in these capabilities but choosing a “set” of most probable personnel who could be trained in these areas. The risk of focusing on just one person can be detrimental. The person may leave or may not prove to be the best or ideal fit for the responsibilities.

Sponsorships to outside programmes may be better option for SMEs rather than opting for house programmes, where a certain critical size of participants is required. However, in such cases input on the upcoming relevant programmes become critical. The challenge is finding the sources, which inform about upcoming training events. Portals such as the Training Orbit feed this challenge, as they give a calendar of the programmes, coming up in the different areas and the different locations.

The constraints of time- do not have enough people to spare a sizeable number for an external programme and space - do not have training room to accommodate 20 odd people at one time. They can be overcome by doing simple things, such as breaking the programmes into smaller modules, of one to two hours and conducted within the work area, or shop floor. Using experienced and qualified resources from within the organisation, to take such courses is a good option. If it has to be an external faculty then it is preferable to have someone from the same city or town so that the faculty can come, a number of times for short durations.

SMEs need not to fret over the difficulties in developing their resource, because of the size. There are mature options if there is a will to help in executing the development plans.

Unlike large firms, Small and Medium Enterprises (SMEs) face a big challenge in training their staff. However, good planning will help meet this challenge successfully.

SMEs employ over 80% of the workforce across geographies. At the same time, they face enormous business challenges including their difficulty in scaling up, investing in innovation and research and maintaining growth. One of the reasons for these, is the lack of development of the human resources. Finding and hiring talent for SMEs itself is a big challenge. However, developing them to deliver the long term vision of the leadership is an even bigger one.

SMEs, given their size and other business challenges, face many issues related to human resource development. The problems come from number of factors including the size of the workforce, the (lack of) maturity of the HR function and (limitations in) execution of development plans.

The size of the organization poses very simple operational issues. Large companies can afford to release their staff for training programmes given the support mechanism available (absence of an employee can be covered up by the others in the department), the less dependency on individuals (given the strength of the processes) and predictable and planned business operations. SMEs do not have these advantages. Given the small number of staff, releasing even one person for a training programme can hamper the day to day operations. Similarly given the small size organising and conducting an in-house training programme would be difficult, where typically around 20 participants would be ideal.

The lack of HR function is another contributing factor to the efforts in training employees in SMEs. HR function when available in SMEs are mostly operational in nature which takes care of the basics such as payroll, statutory compliances, benefits administration and others. They may lack either the bandwidth or the capability to take care of the higher order activities of human resourceurces development such as as capabilities assessment, identification of gaps in capabilities of the workforce vis a vis that required as per the business plan and planning for the fulfillment of the gaps.

The leadership often understands the need for the human resources development and would like to focus on it. However, they are constrained in executing their development intentions. This could be due to factors such as lack of dedicated personnel for human resource development, as we saw earlier, priority of the immediate business goals taking over the priorities of the long term, inability to adequately invest in the development effort or being able to inculcate the spirit of human resource development in the second line. Thus the intention of the leadership remains unfulfilled to the detriment of the organization.

In the next posting we will examine some ideas by which SMEs could manage these challenges.