Redefining Careers in India

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Redefining Careers in India

Feb 13,2012

Companies in India have been struggling with high employee attrition rates for many years now. Excessive employee turnover increases the costs of recruitment and training, apart from hampering employee productivity.

In service industries, attrition at senior levels can even lead to losing key clients to competitors.

In Towers Watson's Global Workforce Study 2010, which surveyed 20,000 employees globally, including over 1,000 in India, career advancement was the biggest influence on employees' decisions to join an organization. Consequently, the study also found that employees in India who reported improvements in their advancement opportunities over the previous 12 months were more engaged compared with workers without such opportunities. High attrition rates are often blamed on the lack of careeradvancement opportunities. Supplementing this thought is a survey of senior managers and executives in India conducted by CII and CSEND, which found the lack of career advancement as the second most-important factor, salary being first, fueling high employee turnover.

In order to study the career advancement opportunities in India and the need for employers to define new paths for their employees, it is important to understand the following: 1) the mismatch between employees' career aspirations and the opportunities available, 2) changes in organizational workforce demographics over time and 3) employees' perceptions of their career needs.

A mismatch between career aspirations and opportunities

As per Towers Watson's research, Fifty-six percent of employees in India believe they must leave their organization to advance to a better job. Comparative figures stand at 43 percent for the United States, 41 percent for the United Kingdom, 38 percent for China and 37 percent for Germany. This clearly suggests that a large number of employees in India have come to seriously consider job-hopping as a means to advance their careers.

Employing some standard retention tools, a few companies have responded to the mismatch between career aspirations and opportunities by offering fast-track promotions. But this practice only exacerbates the attrition problem. Subject matter specialists cannot automatically become good managers and leaders and a myopic approach towards employing promotions alone to retain talent is bound to have counter productive implications.

Recent media reports also observe that employees are working longer hours at the expense of a reasonable work-life balance to gain faster promotions and bonuses.

Another retention strategy adopted by companies in India, especially IT companies, is to offer the technical staff employee stockoption plans (ESOPs) along with managerial promotions. But again, this solution often makes a bad situation worse. These plans give employees some "skin in the game," through owning a share of the company in the form of stock. But the strategy has the unintended consequence of making entrepreneurship more attractive to them, thereby pushing turnover rates higher in the IT industry. Entrepreneurship imposes managerial responsibilities and requires a willingness to take risks, and to invest in yourself and your own company. It is a well known fact that TechSpan, NIIT, Pertech Computers, Global Infotech, InfoTech Enterprises, STG and Infogain were all set up by ex-Wipro employees. Other leading software firms too are alive to these concerns.

It is ironic that employees perceive a dearth of opportunities for career advancement when so many organizations in India are planning for substantial growth and expansion. It could be inferred that these growth plans do not necessarily include generating challenging career paths for the majority of employees. Instead, many organizations are dividing and even sub-dividing existing career opportunities by implementing faster promotions and similar such practices.

As a result, we observe an overemphasis on managerial career paths in companies in India and the growth in management courses confirms this observation. India has witnessed a sudden upsurge in the number of MBA institutes/courses in recent years. Between 2005 and 2011, the number of All India Council for Technical Education (AICTE)-approved management programs jumped by 100 percent, and the number of management seats grew by more than 200 percent. A number of technical institutions, such as engineering colleges, have also started offering MBAs as an additional degree. In the long run, this trend is likely to create a skillsdeficit in non-managerial academic studies.

In the next section, we investigate the overemphasis on managerial career paths in light of the underlying changes in organizational workforce demographics in India.

Changing workforce demographics

Recent changes in organizational workforce demographics partly explain why the emphasis on managerial career paths is misguided today, according to Tamara J. Erickson, who has authored a research paper on the future of work in People and Strategy.

Erickson says, "Many of today's organizational principles are centered on the premise that the workforce is shaped like a pyramid." Over the last century, the pyramidal or bell shape of the workforce - a small number of older workers, moderate number of mid-career workers and many young workers - facilitated traditional upward mobility. The result was a workforce with a few top managers, somewhat more midlevel supervisors/managers and many workers.

The pyramidal workforce harkens back to the prominence of manufacturing or process-driven organizations, such as the military, railways and government. These organizations thrived on multiple supervisory levels, and employees would move up the hierarchy to become a manager or supervisor. The business model required command and control and a vertical hierarchy to emphasize supervision at various levels.

However, changing economic trends have gradually come to favor tertiary industries where supervision is not central to the success of the organization. With the emergence of service/knowledge-driven tertiary industries in India comes a variety of roles that create value for customers mostly through the capability of the workforce. Accordingly, emphasis is shifting to becoming a more capable worker rather than a manager or supervisor. In other words, employees move up the organizational value chain as they become more capable or skilled. In these industries, quite naturally, the traditional path of becoming a supervisor is not necessarily applicable. Workers can grow into their next career stage by becoming more competent.

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