Managing people: Reorienting talent to biz development

I was meeting with the CEO of a large consumer company who was telling me what he didn’t want in his next head of marketing. Companies have been hard-pressed to deliver results in the past couple of years and that’s affected their people policies more than any legislation could have. More on that later. Let’s have a look at some of the trends that have been developing over the past few years and some of them seem to have now become full-blown, besides their impact on people policies of companies in India Inc.

Digitalisation

Frankly, this has been one major disruption in almost every industry segment: whether it’s a manufacturing company, one in chemical or retail. The fact is, technology has leapfrogged many times more than the productivity of firms. As established names struggle to play catch-up with more nimble footed adversaries, there is a scramble for talent that can understand and cope, nay, lead the business transformation. We see companies reorienting their workforce to newer areas of business development: digitisation of the supply chain is in full swing in many as an example.

Millennialisation

We are estimating that close to half of the workforce today started work in this century and their impact on how companies are treating people is beginning to take effect. A large consumer company has started counselling sessions for its senior managers on how to deal with the millennials: asking them to be patient and not to expect 18-hour work sessions. In fairness, they have also started to counsel the millennials joining the company that it’s okay to wear shoes (not sandals) and collared shirts and everyone may not be as tech-savvy as they expect them to be.

However, the frustration at the millennials arriving without the requisite skill sets that makes them employment-ready still stands. Forget graduates and engineers, the head of HR of a reputable FMCG company wrung his hands at going to premier schools to hire MBAs who the company trained for a year only to have them leave in another six months. Softer skills are not taught at B-schools, and the sense of entitlement seems to be preventing students fresh off campus to be comfortable at jobs where they sweat behind their collars.

The flip side is that the innovation the younger task force brings to solving problems is fantastic and their attitude to work may not be palatable to the older lot, but it seems to be providing solutions that are at times closer to the consumers’ hearts and wallets. E-commerce is reflective of the millennial ability to think and execute out of the box. The difference between the successful and the not so successful start-up seems to be maturity and a learning agility to learn from past mistakes.

Diversity and inclusion

We are seeing diversity as a distinct strategy from corporates to dimensionalise their businesses. Those who started five-10 years ago have seen the advantage that a more representative workforce and management can bring to their business not just in financial results but employer branding and, most importantly, connecting with their customers and stakeholders.

What are companies doing to connect better with the workforce? We are seeing women getting their due with more options to choose as they grow up the ladder. Salary disparity is still an issue that is getting addressed, and more companies have yet to get fully aligned to flexitime and work from home concepts. For the right woman candidate, companies are willing to breach their own bands of compensation.

Well, unfortunately India Inc. seems to have understood diversity as only applying to gender and not to other sections of society. This will and should change as we ought to have more representation on the boards from not just women but sections of the minority classes and less privileged sections.

Technology adoption

Elsewhere I mentioned the jump in technology. Most savvy companies are suing technology to connect better with their employees. Training has moved on from stodgy sessions in grey conference rooms to bite-sized chunks delivered via the web or an app, to be consumed at a time and place of your choosing.

Recruitment is now also no longer the domain of the headhunter with AI and predictive tools helping line managers make faster choices.

Performance management and career development

Companies have been reacting to stress on performance by aligning business results to employee rewards and benefits. We are seeing an increasing amount of compensation now being variable and/or stock-linked. At CEO levels variable pay is around 50 per cent, at CXO levels it’s around 30 per cent and no one really is baulking at a 20 per cent variable pay any longer. At the same time over-delivery on targets could mean an even better year for employees. A company we know has a cap of 150 per cent of the fixed salary as variable. And its employees have been getting that for the past three years!

At the same time, we are seeing a nascent but important trend of employees setting their own career agenda. With companies becoming more siloed, especially MNCs, moving around different functions is getting more difficult. We are seeing employees aggressively planning their own careers, sometime changing jobs to get the experiences they think are vital to stay ahead of the game.

There is a Chinese curse that says “may you live in interesting times”.

I think it is a fascinating time to be a spectator of how business in India is shaping and reshaping itself. Here’s hoping for a fantastic 2018.

Ashutosh Khanna is Partner, Korn/Ferry International