Spoken Word: Talent Management in Hypergrowth Markets
[Mercer's Global Human Capital Perspective Newsletter - Volume 2 Issue 3 - 2008]
Managing talent is a topic on every CEO's agenda in Asia Pacific today. The region plays host to 40 to 50 percent of the world's workforce, yet the popular belief broadcast in media stories about these hypergrowth markets is that they are facing a severe "talent shortage."
When faced with an apparent shortage of any business-critical resource, companies often throw as much money as they can at the problem to ensure that they don't run short. However, in the context of talent management in Asia Pacific today, they rarely achieve results. Geographies such as India and China report 25 to 30 percent salary hikes, yet both face retention issues and turnover of 18 to 50 percent.
The talent management problem in Asia Pacific requires a fresh approach, and smart companies are taking innovative steps that are making a major difference. While these companies offer 6 to 10 percent lower salary increases, their turnover rate is 8 to 10 percent lower than industry averages. It's clear that they're doing something right. But what? We believe there is a clear pattern to the successful talent management practices in evidence today. First, smart companies don't focus on solving the problem of "shortage," which invariably leads them to the treadmill of irresponsible compensation. Instead, they reframe the question. Rather than addressing the so-called talent shortage, they focus their efforts to redress the capability deficit - that is, making sure that the right knowledge, skills and behaviors are brought to bear against the specific needs of the jobs, the work and the business. This may sound like mere wordplay, but in fact it completely
changes the way they approach the situation.
Second, smart companies recognize that talent management is not just about sourcing or compensation. It is no longer enough to look at single issues. Today you have to look at the total talent management value chain - sourcing and compensation management represent only pieces of that chain. Smart companies in Asia Pacific today take a systems view. They stop looking for silver bullets and evolve sustainable and competitively defensible solutions to today's serious talent management challenges by addressing all elements of the talent management system.
Finally, smart companies also realize that it's not enough to copy other people's answers and solutions to talent management problems. While it's tempting to find out a colleague's best practice and simply try to duplicate it, smart companies recognize the need for answers that work specifically for them. They see talent management not as an art but as a science. And it's a science that demands evidence-based management practices, using data systematically to learn from past successes and failures, while also conducting forward-looking experiments to find out what types of talent management interventions truly make a difference.
Ignite @ TCS: A new wave in talent transformation
One such smart company is TCS (Tata Consultancy Services), the largest IT service provider in Asia and among the top 10 in the world. This year it will be recruiting between 40,000 and 45,000 people. Although TCS operates in a highly competitive environment, it has one of the highest retention rates in the industry. It was also awarded the Best Employer Award by Dataquest in India in 2007.
TCS takes a scientific approach to measuring and piloting new initiatives in talent management. To build the company's talent portfolio, it conceived Ignite, a small experiment in the larger context of HR. Starting from the premise that India's talent shortage is an opportunity, not a crisis, Ignite is a strategic initiative that reimagines and re-engineers the entire talent value chain.
Historically, TCS recruited engineers to meet its business needs. To increase its scalability, the company realized it would have to be much more diverse in terms of its intellectual, social and cultural dimensions. Ignite offers an accelerated learning program to individuals from nonengineering backgrounds, addressing this need for diversity.
Launched in December 2006, Ignite began by hiring, training and deploying two batches of trainees, with 1,100 recruits in total. The success of the program can be judged by the fact that more than half had competing offers from other companies but chose to join TCS through Ignite. This year, 1,600 recruits are to be trained; more than 60 percent are first-generation college graduates, 65 percent are women and over 60 percent are from rural areas.
Ignite's innovations have revolved around four main areas: hiring, transitioning, transformation and learning spaces.
1. Hiring
Despite the perceived "talent shortage," TCS strongly believed that talent was not the preserve of any particular social grouping. The question was how to develop new, cost-effective ways of talent-spotting. The company decided to broaden its talent pool, recruiting from science colleges in addition to its usual base of engineering schools. Working with colleges, alumni and other networks, it developed a SmartForm with built-in metrics to identify individuals with an aptitude for programming suitable for a global IT workforce.
Typically, out of every 100 applicants, only between five and 10 are hired. However, all applicants are requested to complete an e-mail survey to maintain the quality of the hiring process.
2. Transitioning
Successful applicants demonstrate both an aptitude for programming and a positive attitude. They wait eight months between being hired and joining the company, during which Ignite's on-boarding process kicks in to reduce the time taken for recruits to become productive once they start work. TCS discovered that families are important stakeholders for many employees - over 60 percent of trainees are women from small towns, and parents are key decision makers in the employer-selection process. Ignite uses social networking technologies to include families in the on-boarding process, and parents are invited to visit the training facility in person.
3. Transformation
Since trainees are 19-to-20-year- old men and women, they must learn to adapt from their past college lifestyle to the present corporate culture. Most don't have a computer science background; usually they have studied mathematics, physics or chemistry, and many have never touched a computer. Ignite's training transforms them from science students into software professionals, while teaching them to work in large teams. Recruits are also presented with ample opportunities to demonstrate leadership even as rookie software programmers.
4. Learning spaces
Ignite takes place in an energizing, purpose-built learning environment. TCS paid close attention to the architecture of the learning space - the design has encouraged informal learning, peer-to-peer learning and learning by doing (in a nine-hour workday, three to four hours are devoted to lectures), as well as e-learning. Four months are spent in this learning space, with another three months spent learning on the job as part of trainees' project training.
Ignite learning
Ignite's goal is to make fresh recruits productive from the minute they join the company. As such, their training revolves around learning by doing. All trainees undertake complex case studies, with TCS expecting real-world levels of productivity. Recruits must produce 500 lines of code, which are checked for functionality, authenticity and elegance using both automated tools and manual review. Critical feedback highlights the importance of professional responsibility. A Personal Growth Monitor allows trainees to keep track of their own growth. They can compete both against themselves and with their colleagues using a daily index known as a "Mindex," which enables measurement and performance driven metrics. All of this is supported with human interaction and faculty feedback.
High tech, high touch
The entire learning process at Ignite is digitized, from sourcing to performance management. Trainees can review lectures in their own time, while technology creates a mediated learning space so that trainees get used to the idea of tele-proximity. There are also virtually mediated classrooms and intelligent computerized tutors from universities such as MIT and CMU. All this is possible thanks to a world-class faculty of highly committed mentors, all of whom have 10 to 15 years of industry experience. Highly inspired and motivated, they offer a personalized and customized learning experience, both in person and online. Ignite invests in both faculty development and mentoring.
Ignite insights
Overall, Ignite has yielded three major insights. First, a talent shortage can be seen as an opportunity instead of a crisis. Second, stakeholders aren't necessarily just new employees, but can include families, mentors and teachers. Finally, igniting the mindset of innovation can be usefully applied to any business, as it allows you to do more with less.
[Mercer's Global Human Capital Perspective Newsletter - Volume 2 Issue 3 - 2008]
Managing talent is a topic on every CEO's agenda in Asia Pacific today. The region plays host to 40 to 50 percent of the world's workforce, yet the popular belief broadcast in media stories about these hypergrowth markets is that they are facing a severe "talent shortage."
When faced with an apparent shortage of any business-critical resource, companies often throw as much money as they can at the problem to ensure that they don't run short. However, in the context of talent management in Asia Pacific today, they rarely achieve results. Geographies such as India and China report 25 to 30 percent salary hikes, yet both face retention issues and turnover of 18 to 50 percent.
The talent management problem in Asia Pacific requires a fresh approach, and smart companies are taking innovative steps that are making a major difference. While these companies offer 6 to 10 percent lower salary increases, their turnover rate is 8 to 10 percent lower than industry averages. It's clear that they're doing something right. But what? We believe there is a clear pattern to the successful talent management practices in evidence today. First, smart companies don't focus on solving the problem of "shortage," which invariably leads them to the treadmill of irresponsible compensation. Instead, they reframe the question. Rather than addressing the so-called talent shortage, they focus their efforts to redress the capability deficit - that is, making sure that the right knowledge, skills and behaviors are brought to bear against the specific needs of the jobs, the work and the business. This may sound like mere wordplay, but in fact it completely
changes the way they approach the situation.
Second, smart companies recognize that talent management is not just about sourcing or compensation. It is no longer enough to look at single issues. Today you have to look at the total talent management value chain - sourcing and compensation management represent only pieces of that chain. Smart companies in Asia Pacific today take a systems view. They stop looking for silver bullets and evolve sustainable and competitively defensible solutions to today's serious talent management challenges by addressing all elements of the talent management system.
Finally, smart companies also realize that it's not enough to copy other people's answers and solutions to talent management problems. While it's tempting to find out a colleague's best practice and simply try to duplicate it, smart companies recognize the need for answers that work specifically for them. They see talent management not as an art but as a science. And it's a science that demands evidence-based management practices, using data systematically to learn from past successes and failures, while also conducting forward-looking experiments to find out what types of talent management interventions truly make a difference.
Ignite @ TCS: A new wave in talent transformation
One such smart company is TCS (Tata Consultancy Services), the largest IT service provider in Asia and among the top 10 in the world. This year it will be recruiting between 40,000 and 45,000 people. Although TCS operates in a highly competitive environment, it has one of the highest retention rates in the industry. It was also awarded the Best Employer Award by Dataquest in India in 2007.
TCS takes a scientific approach to measuring and piloting new initiatives in talent management. To build the company's talent portfolio, it conceived Ignite, a small experiment in the larger context of HR. Starting from the premise that India's talent shortage is an opportunity, not a crisis, Ignite is a strategic initiative that reimagines and re-engineers the entire talent value chain.
Historically, TCS recruited engineers to meet its business needs. To increase its scalability, the company realized it would have to be much more diverse in terms of its intellectual, social and cultural dimensions. Ignite offers an accelerated learning program to individuals from nonengineering backgrounds, addressing this need for diversity.
Launched in December 2006, Ignite began by hiring, training and deploying two batches of trainees, with 1,100 recruits in total. The success of the program can be judged by the fact that more than half had competing offers from other companies but chose to join TCS through Ignite. This year, 1,600 recruits are to be trained; more than 60 percent are first-generation college graduates, 65 percent are women and over 60 percent are from rural areas.
Ignite's innovations have revolved around four main areas: hiring, transitioning, transformation and learning spaces.
1. Hiring
Despite the perceived "talent shortage," TCS strongly believed that talent was not the preserve of any particular social grouping. The question was how to develop new, cost-effective ways of talent-spotting. The company decided to broaden its talent pool, recruiting from science colleges in addition to its usual base of engineering schools. Working with colleges, alumni and other networks, it developed a SmartForm with built-in metrics to identify individuals with an aptitude for programming suitable for a global IT workforce.
Typically, out of every 100 applicants, only between five and 10 are hired. However, all applicants are requested to complete an e-mail survey to maintain the quality of the hiring process.
2. Transitioning
Successful applicants demonstrate both an aptitude for programming and a positive attitude. They wait eight months between being hired and joining the company, during which Ignite's on-boarding process kicks in to reduce the time taken for recruits to become productive once they start work. TCS discovered that families are important stakeholders for many employees - over 60 percent of trainees are women from small towns, and parents are key decision makers in the employer-selection process. Ignite uses social networking technologies to include families in the on-boarding process, and parents are invited to visit the training facility in person.
3. Transformation
Since trainees are 19-to-20-year- old men and women, they must learn to adapt from their past college lifestyle to the present corporate culture. Most don't have a computer science background; usually they have studied mathematics, physics or chemistry, and many have never touched a computer. Ignite's training transforms them from science students into software professionals, while teaching them to work in large teams. Recruits are also presented with ample opportunities to demonstrate leadership even as rookie software programmers.
4. Learning spaces
Ignite takes place in an energizing, purpose-built learning environment. TCS paid close attention to the architecture of the learning space - the design has encouraged informal learning, peer-to-peer learning and learning by doing (in a nine-hour workday, three to four hours are devoted to lectures), as well as e-learning. Four months are spent in this learning space, with another three months spent learning on the job as part of trainees' project training.
Ignite learning
Ignite's goal is to make fresh recruits productive from the minute they join the company. As such, their training revolves around learning by doing. All trainees undertake complex case studies, with TCS expecting real-world levels of productivity. Recruits must produce 500 lines of code, which are checked for functionality, authenticity and elegance using both automated tools and manual review. Critical feedback highlights the importance of professional responsibility. A Personal Growth Monitor allows trainees to keep track of their own growth. They can compete both against themselves and with their colleagues using a daily index known as a "Mindex," which enables measurement and performance driven metrics. All of this is supported with human interaction and faculty feedback.
High tech, high touch
The entire learning process at Ignite is digitized, from sourcing to performance management. Trainees can review lectures in their own time, while technology creates a mediated learning space so that trainees get used to the idea of tele-proximity. There are also virtually mediated classrooms and intelligent computerized tutors from universities such as MIT and CMU. All this is possible thanks to a world-class faculty of highly committed mentors, all of whom have 10 to 15 years of industry experience. Highly inspired and motivated, they offer a personalized and customized learning experience, both in person and online. Ignite invests in both faculty development and mentoring.
Ignite insights
Overall, Ignite has yielded three major insights. First, a talent shortage can be seen as an opportunity instead of a crisis. Second, stakeholders aren't necessarily just new employees, but can include families, mentors and teachers. Finally, igniting the mindset of innovation can be usefully applied to any business, as it allows you to do more with less.