Organisations in India are facing global mobility challenges which are closely linked to the Indian economy, education system and work ethos. We investigate.

While there could be several factors that influence mobility in the Indian workforce; the Indian economy, the Indian education system and the Indian culture and work ethos seem to be the dimensions which have the strongest impact on global mobility as a whole.

The Indian economy

As economies of the world race into 2006, and in order to provide context for this article, it is important to understand the issues and priorities for India

Agriculture: supports a large percentage of the population

According to a recent article in economywatch.com, more than 58 percent of the country’s population depends on agriculture, a sector producing only 22 percent of the country’s total GDP. The article explains that legislation reform, strengthening research and development (R&D), and improvements in post-harvest management technologies will give a further boost to Indian agriculture. While acceleration in agriculture growth to 4 to 4.5 percent is imperative, even with such a growth rate, share of agriculture in total GDP is likely to further recede. Therefore, there is a need to absorb excess agricultural labour in other sectors, notably industry.

Rapid growth of the agro-processing industry close to the agricultural production centres can bring about this shift without moving people from rural to urban areas.

It is evident, given the above information, that India is still largely dependent on the success of its agricultural sector, which in turn influences the economy and the conditions of its large population in the still so-called rural areas.

Adapting India-centric systems and processes for global workers is a challenge.

Economywatch.com further explained that the index of industrial production (IIP), which measures the overall industrial growth rate, was 10.1 percent in October 2004, as compared to 6.2 percent in October 2003. This figure was aided by a robust growth of 11.3 percent in the manufacturing sector, followed by mining and quarrying and electricity generation.

However, industrial production saw a decline in December 2004, when IIP dipped to 8 percent. Thus, one of the critical challenges facing Indian economic policy consists in devising strategies for sustained industrial growth.

Final phase-out of the Multi-Fiber Agreement (MFA), a violation of the basic principle of free and fair trade enshrined in the post-war General Agreement on Trade and Tariffs, and India’s conformity with the international intellectual property system from January 1, 2005, have been two significant developments in the realms of commerce and industry.

The textile industry is the largest industry in terms of employment economy from the current USD 37 billion to USD 85 billion by 2010, creation of 12 million new jobs in the textile sector, and modernisation and consolidation for creating a globally competitive textile industry, reports Economywatch.com.

The automobile sector has demonstrated the inherent strengths of Indian labour and capital, and the pharmaceutical industry and the IT industry are two burgeoning sectors for India. Among the sectors that have experienced the greatest transformation in India, perhaps the pharmaceutical industry is the most significant.

Services: highest contributor to total GDP growth rate

The service sector has maintained a steady growth pattern since 1996-97, except for a fall in 2000-01, reports Economywatch.com. Trade, hotels, transportation, and communication have witnessed the highest growth level of 10.9 percent in 2004, followed by financial services.

IT-enabled services—including off-shoring—such as business process outsourcing (BPO), have been growing rapidly in the recent past and will continue to rise. India’s large English-speaking skilled workforce has made the country a major exporter of software services and software workers.

Arguably, the Indian IT sector has ushered in a great deal of jobs and also wealth for its people. It is appropriate to spend some time to understand this industry, which is the largest wealth-creating industry for those employed, as well as for other stakeholders.

According to an article from the Press Trust of India, the Indian IT sector is expected to reach the USD 22 billion mark in export revenue by March 2006, compared with USD 17 billion in 2004-05, measuring a growth rate of 32 percent.

The latest NASSCOM-McKinsey survey predicts that IT and IT-enabled services would add 7 percent to India’s GDP by 2010, and along with the creation of 8.8 million new jobs, the export revenue from the sector is projected to triple to USD 60 billion by 2010.

Vinnie Mehta, director, the Manufacturer’s Association of Information Technology, adds that the software industry is estimated to employ an additional 250,000 staff in 2005-06, taking the total number of employees to 1.3 million, compared to 1.045 million in 2004-05. It is further estimated that the industry is likely to add another 900,000 employees in two years, taking the employee total to 2.2 million by March 2008.

The Indian economy and the Indian population at large cannot ignore this sector, which is one of the largest producers of jobs for its people, both in India and abroad, and is one of the chief contributors of the increasingly 'mobile' Indian.

Out of the three sectors, the service sector has been the highest contributor to total GDP growth rate.

The Indian education system comes of age

One of the key factors that aid mobility of the Indian workforce is its superior English-speaking capabilities and the focus on mathematics and computing within the education system.

There are more than 306 universities and more than 15,000 colleges spread across India, and more than 250 of these universities provide computer-related education. The total number of colleges affiliated to the universities is more than 1,000. One study shows that engineering colleges in the country have been growing at 20 percent a year. And there are thousands of private training institutes.

Indeed, propelled by the growth in the service industry—primarily IT— the number of knowledge workers in India has been growing at a rapid pace. NASSCOM’s reports on IT professionals from colleges show that in 2004, India had more than 100,000 engineering graduates.

The Indian education system finally has come of age and it is true that graduates from the Indian institutes of technology and other engineering schools are regarded as among the best in the industry.

It is a case in point that universities in the United States are joining hands with the institutes in India for research and education-related initiatives. Fifteen top American universities have joined hands with the Indian Space Research Organisation (ISRO), the Department of Science and Technology (DST), and Amrita Vishwa Vidyapeetham, to enhance higher education and research in India.

In the context of global mobility, it is important to recognise the Indian education system – particularly in the area of IT— as a significant contributor of the average Indian’s ability to work shoulder to shoulder with the experts in the western world.

The Indian culture and work ethos

Today, Geert Hofstede’s five Cultural Dimensions, which assist in differentiating cultures and are defined by the Power Distance Index (PDI), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance Index (UAI), and Long-term Orientation (LTO), are accepted as powerful indicators of what drives behaviour in society.

Collectivists who accept change readily

What is of relevance in the current context is that Indian culture is one that sees a low individualism index and a low uncertainty avoidance index.

A low individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group. And this is true in the case of India, where decisions both professional and personal are made not by the individual alone, but by the entire family.

Indeed, it is often likely that choices of education and careers to be pursued are decided by the family. However, it may be noted that culture is never static and increasingly, particularly in the cities in India, the trends are changing and are influenced much more by the West, although this percentage is small.

A low uncertainty avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks.

In the context of mobility, it is visible that the average Indian is highly mobile and keen to explore different destinations, and that an average Indian can deal with ambiguity at work.

The relationship between economy, education system and culture

While it is difficult to determine the exact relation between the three dimensions itself, one does see a pattern.

It is true that there exists a strong symbiotic relation between business and academia—business gets its talent from universities, training institutes and R&D initiatives; students, on the other hand, gain practical experience through project work and internship programmes, and employment from the business houses and other establishments.

It is safe to assume that the requirements of the business houses and the course of the Indian economy set the ground and context for educational institutions. In India, the IT revolution saw the burgeoning of engineering colleges and training institutes across the country. Even today, the business process outsourcing wave presents itself as the reason for training institutes, particularly for the voice-enabled services.

It is also an established fact that over the last decades, the number of globally mobile Indians is on the rise, primarily because of the IT revolution. Indians are now more than ever under pressure from their families and peers to have a career in IT, and this is influencing their decisions on education, job type, compensation provided by the employer, and international assignments. We could attribute this behaviour to the low individualism index in the Indian culture.

Globalisation has touched the Indian economy, the Indian organisation, and the Indian people, and its affect on each of these three entities is in some ways different, and, in many ways, alike. One of the key outcomes of globalisation is the global mobility of the Indian workforce.

Global mobility challenges for Indian organisations

While there could be a number of challenges, there are at least five that lie at the heart of an Indian organisation, and the degree of importance for each of these five varies for different organisations.

These five key challenges, experienced by different organisations in varying degrees are: talent management; compensation; innovation; cultural integration; and systems and processes.

Talent management

Indian organisations, in general, and IT organisations, in particular, are faced with an acute shortage of 'skilled' workers within the country. In addition, organisations are facing a situation where employees are leaving for better opportunities available outside the country.

It is true that many Indian organisations (IT in particular) also wish to hire talent from countries outside of India. However, since many of them are not as well-known, they fail to attract talent and also are faced with very specific local, legal, and cultural challenges. Although this trend is rapidly-changing because Indian organisations are being recognised for their talent and the quality of their work, this area, nonetheless, poses a challenge and organisations are gearing up to be more local in their hiring practices in order to attract talent.

Organisations are trying to overcome the difficulty of attracting talent by using local practices, such as job fairs, internships, flexible compensation systems, and establishing strong ties with colleges and institutes, in addition to making use of the media and gaining the attention of the targeted audience.

Compensation

Designing global compensation packages for employees, who are either being sent on international assignment outside of India, or who are coming to India on international assignment, remains one of the key concerns. It is always a matter of debate whether compensation should be expatriate or localised. Furthermore, keeping track of the tax implications, the legal requirements, and having robust payroll systems to cater to individual local requirements of a country keep compensation experts of organisations on their toes.

Admittedly, this is the most difficult area in terms of conceptualising and implementing a system that is both global and local in nature. Indian organisations are, of course, relying primarily on local tax advisors and compensation experts in different countries, and also are trying to increase their own in-house capability and knowledge. From a systems perspective, there are various payroll systems that can be administered but only after a great deal of customisation.

Innovation

Fostering a culture of innovation and creativity is yet another challenge faced by Indian organisations today.

Neither the Indian education system nor the culture fosters and encourages creativity, and so, evidently India has had very few pioneering concepts or products and services. However, organisations are now taking it on themselves to provide an environment that can sow the seed of innovation and creativity in the work life of its employees. And, in the context of globalisation and mobility of its workforce, where Indian employees have to work together in cultures where innovation and creativity are a given, this aspect does assume a great deal of significance.

Dr. Edward de Bono’s 'Six Thinking Hats™,' a tool whereby individuals and teams learn to separate thinking into six categories for analysing issues, generating new ideas, and separating emotions from facts and critical thinking from creative thinking, has revolutionised how creativity can be fostered in companies and Indian organisations are relying on this and other such creativity tools that are available.

Although Indian organisations have a long way to go in this area, this marks a beginning of taking creativity seriously.

Cultural integration

No discussion on globalisation and global mobility is complete without mentioning the challenges faced by organisations as a result of different social and work cultures. While cultures at the workplace steadily are assuming some amount of uniformity, as seen in the crystallising of a 'global work culture', the behaviour patterns largely governed by the socio-economic culture play a role that cannot be ignored.

We see that an average Indian is focused primarily on work alone and may not have an active interest in any sport or art form.

Discussions with his or her fellow colleagues from other cultures are primarily work-related, and his or her disposition with the customer and client is more of benevolence than an equal standing.

Different organisations have different ways of dealing with this, the most common being cross-cultural training. Indian organisations are relying on this, and also investing heavily on this by calling on several cross-cultural training experts and orienting its employees from the very basics to the extremely sublime aspects of culture.

Systems and processes

The internal systems and processes of Indian organisations are still largely India-centric. Organisations are in the process of designing and implementing systems and processes that are 'glocal' in nature, however, even with the help of the local experts, this is still a challenge.

With global mobility looming large, the significance of robust systems and processes that can be followed globally by all its employees cannot be undermined. It is primarily because of this that Indian organisations are adopting several quality models from the West. However, this is an area that needs more focus and concerted effort.

The Indian economy has seen a rise in the global mobility of its people and organisations are instituting comprehensive global mobility programmes. Because Indian organisations are riding a wave in the global mobility cycle, their focus currently is on steps to take when assigning its employees international projects.

Pragmatically speaking, it is in the area of repatriation that Indian organisations will need to focus on in the years to come, and also prepare for a scenario where they may be faced by the unionisation of the knowledge workers or the white-collar employees demanding a more socialistic approach to the long-term benefits, such as pension plans and an increased focus on work-life balance.

March 2006

Geeta Gwalani, GMS, is HR manager for TATA Consultancy Services Limited, Zurich, Switzerland, and a member of the MOBILITY Global Editorial Advisory Committee. She can be reached at +0041 1 2841724 or e-mail geeta.g@tcs.com

Reprinted with the permission of Worldwide ERC(R) from the March 2006  issue of MOBILITY".

Subject: Mobility management in India, HR management in India