Challenges for recruiters in the post-liberalized India

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"Going global" and "globalization" have emerged as buzz words for the '90s, and growth-smart companies are quickly realizing a global economy is no longer just a theory. However, experts say in order to effectively compete in a diverse world market, companies must adopt a global mind - set and understand the importance of developing international leaders from different cultural backgrounds. In many senses, global recruiting is no different than recruiting in India; the mechanics are the same, but the challenges different.

"In terms of recruitment practices, the way you are going to do it in India may be different than the way you do it in Brazil or China," explains the HR head of an Indian multinational. "Developing a deeper understanding of the local market as to what constitutes top talent is probably the most critical caution." These different challenges and expectations have been analysed in greater detail in this article.

The first line that seems to be apparent on thinking about this topic is that after 1991, there were practically no differences between global recruiting and recruiting in India. Post liberalization, the challenge for both recruiters and job seekers in India changed from who - you - know, a legacy of the ubiquitous jugaar system to one of finding the right match between the job profile and the candidate.

While this may seem a simplistic approach to the entire cut throat job market in India, it does present an overall view of the recruitment policy. However, it throws up an interesting question of the demand - supply mismatch in the Indian job market industry, and also the question of information asymmetry among job seekers. I shall examine these questions in further detail in the later part of this report.

Current Scenario

In the initial part, the first question I will look at is what has actually changed in the job market and how it has affected both employers, and current and prospective employees. The best part for prospective employees has been the growing number of employers, including a host of multinationals that employ the best from a widespread talent pool, through a highly transparent and effective recruitment policy. This has also completely destroyed the PSU monopoly not only on employees, but also goods and services, which has benefited society in multiple ways.

It has also led to an increasing upward pressure on compensation and benefits, a case in point being a recent Economic Times Article about companies such as Cognizant and Accenture offering higher packages to fresh graduates and post graduates, forcing others such as TCS and HCL to offer similar packages. Also, a job seeker today is more aware of the benefits and bonuses he wishes to have as a part of his job perks, and has a higher bargaining power as compared to pre - liberalization period employees. Examples as part of such extra benefits may be extended maternity and more recently paternity leaves, workplace crèches etc.

In spite of such perks and other bonuses, the average attrition rate in the white collar segment in India is around 19.5%, which shows that Indians not only want the best jobs in the market, but also that they are always willing to switch jobs in search of greener pastures. The system of loyalty to the employer prevalent through the guanxi system in China and the employment feudality system in Japan have never caught on India, especially after the demise of PSUs as the primary employment generators in the Indian economy.

Such directly measurable factors like attrition rate, level of job satisfaction etc. are highly publicized factors, and are generally considered by job seekers before saying yes to a job offer, or switching to another job. Work - life balance has become the buzzword of the day, and these soft factors are becoming primary concerns in selection of an employer.

While these facts may show a healthy picture of the job market, there are other aspects that also need to be studied. The first and the most major concern in this regard is the information asymmetry and entry barriers in the job market, creating a situation where an almost similar pool is considered for almost every job, thus creating an inequitable job market where fresh entrants are always at a disadvantage. Another issue that comes to mind is the increasing focus of every company on closed processes such as campus placements and referral systems, which severely limit available chances for the larger population not privy to such exclusive processes. In a publicly available survey on a financial company exclusively recruiting from business schools through the campus method, it was found that from an average intake of 150 students in a year, less than 100 stayed with the company after 3 years from joining, leading to wasted training and employee gestation costs.

Challenges & Observations

These facts can be used to deduce the major issues which recruiters face in post - liberalized India. The first concern is a better method of selection, which poses concerns for both the large numbers of both employers and employees to create a perfect match between demand and supply, that is, an employer's needs and employees' wants. One can even go to the extent of describing the job situation today as a perfect mismatch, and thus a system which continues because of no better alternative being currently available. The second challenge that recruiters face is the lack of relevant training and soft skills among fresh graduates. Recent surveys and articles in established forums have gone to the extent of saying that more than 70% of Indian graduates are unsuitable for employment, and thus require a significantly higher period of on - job training than their counterparts in the rest of the world.

While some of these factors can be attributed to the present format of the Indian education system, there are some steps that may be taken by recruiters to reduce the disparity in the job market today.

The first and foremost should be a complete stop on campus recruitments in all forms, so that all students and job seekers have a level playing field. An off campus recruitment process also checks a variety of skills ranging from technical, personal and aptitude and also has various forms of rigorous tests such as psychometric analysis, psychological make - up pattern tests etc. Such a change would not only reduce costs of hiring and on - job training, but also reduce the time taken in the entire recruitment process, since most of these steps can be conducted online, with only a final interview conducted at a personal level. This would also reduce the information asymmetry in the Indian job market. In the current scenario, there are several instances where potential hires miss out on opportunities due to lack of a mismatch in the demand - supply pattern and sympathy towards recruitment signalling patterns. Vice versa, employers also get a large pool to choose their hires from, to ensure a better fit between the required job fit and the candidate.

The second major challenge that Indian recruiters of today face is the high degree of job switching and attrition due to other reasons such as higher education. This decision to switch to another organization has a downside not only in the form of the sunk cost in the training and development of the employee, but also the potential gap created in the projects the employee was involved in, leading to a further loss of productivity. Employers in the past have tried to exacerbate the problem by forcing employees to sign bonds and other similar agreements, but this has not led to a significant reduction in the voluntary attrition rate.

Future outlook

A better method to combat this may be use of unofficial non - poaching agreements between companies to prevent poaching in the middle and top management levels, as has happened in several Indian multinationals. A much better method of this would be a better understanding of employee needs and aspirations, and an effective grievance redressal mechanism in all companies. Such a process would require proactive participation from the human resource and administration departments so that measurable parameters of job satisfaction increase. A mentorship program for new employees to ingrain them in the organizational culture and work styles may also create a stronger feeling of belonging towards the organization, and help in reducing disgruntlement among employees.

In this article, I have outlined my personal views on the challenges faced by Indian recruiters in the post - liberalization era and have hoped to present a holistic picture, supported by corroborative evidence wherever necessary. Based on my research for this article, I have outlined several steps for better employee engagement, which may bring the Indian workplace on par with global standards:

A better introduction to the workings of the company - including an organization chart so they understand the structure

The ability to job shadow an existing employee before jumping into the role

A mentor to initiate the employee into the organizational culture

More understanding from the individuals they work with and support around the fact that they are just out of college and still need to learn the ropes

Less oversight and micro managing and more of a focus on giving them the tools and support they need to do their job

The ability of all the employees to share information with each other and stay in communication with each other - so they can help and support each other in the role

A career path - the chance to grow with the company

Regular and frequent performance measurements with a view to identify key performance areas and scope for improvement