Sylvia Vorhauser-Smith, Contributor
Blogging on global talent management issues
7/02/2012 @ 5:08PM
It’s no wonder workplaces everywhere are obsessed with employee engagement – everything seems to link to it. Engaged workers are more productive, perform better, motivate others and, perhaps most importantly –stay. So it is also no surprise that in a labor market such as India where attrition rates of 20-30% are normal and 50% in industries such as IT not unheard of, serious questions about engagement are being asked.
Let’s start with the stats. A recent Mercer survey highlights that no fewer than 54% of Indian workers are seriously considering leaving their jobs, and that figure spikes to 66% in the 16-24 year age bracket. And they’re not kidding – other independent studies confirm the correlation between intention to leave and actual turnover. The really tricky part is that the people considering leaving are not even desperately unhappy. 76% of Indians surveyed reported satisfaction with their jobs and 75% with their organizations.
What seems to be the problem? It boils down to three key drivers of attrition in India:
1. Because they can
Yes, there’s a generational factor. Indian millennials are no different from those elsewhere – they just have more opportunities in their buoyant market at present. Young Indians are looking to fast-track their learning experiences and their seniority, and job-hopping appears to be a good way to achieve both. A 2012 survey by Catalyst shows that 78% young Indians aspire to senior executive and/or CEO roles, and they’re very impatient about getting there.
2. Market frenzy
Don’t be lulled into thinking that a population of 1.2 billion with a workforce over 488 million must have plenty of talent to spare. With the world’s youngest median age at 26.2 years (U.S. 36.9, Russia 38.7 and Japan 44.8), Indian educational institutions cannot cope with the quantity or quality of education required. Consequently only a very small percentage of Indians hold tertiary qualifications, and of these only an estimated 15% are of global standards. India needs an estimated 2,735 additional managers each year, and only 1,740 are in the pipeline. Employers are competing aggressively for their share: 88% of Indian employers say they are in the market for MBA graduates in 2012.
3. Bad management
The middleman must carry some of the blame for high turnover: Many employees are passively unimpressed by or actively disenchanted with their managers. In a market where higher pay remains the number one motivator for job change, one survey of Indian organizations attributes 48% of turnover to poor relationships between employees and their supervisors. A study by Right Management of over 4,000 employees in 28 Indian companies similarly found that 53% were dissatisfied with their immediate manager.
If you are serious about keeping your top Indian talent, here are some suggestions:
- Make career paths clearly visible. No amount of window dressing will hide a lack of career and promotion opportunities in your organization. Apart from salary, this is the most desired benefit employment can bring to aspiring Indians. Visibility is paramount – people need to own their career paths and understand what qualifiers and steps need to be taken to achieve their career goals. Implement dynamic enabling technologies with mobile and social connectivity to career opportunities in your organization.
- Breed a new generation of leaders. Indian employees want managers and leaders they respect and can learn from, who will support and guide them. Developing the leadership capabilities of Indian managers so they can rise from task supervisors to true people leaders should be an organizational imperative.
- Over-invest in training and development. Many large organizations cringe at the costs of serious training for an Indian workforce. But remember that you are contributing to filling an educational gap in the society, which is partly why labor is relatively cheap. Leading employers see this not as a cost but an opportunity to both harness worker potential as well as a talent attraction and retention lever.
- Be more flexible. One of the most cost-effective ways to increase engagement is to give employees every bit of autonomy you can in getting the job done. It might take some organizational redesign, but it could prove very advantageous. Does the work really need to be done at your offices or can it (or parts of it) be virtualized? Are you measuring work performance by the quantity and quality of inputs, or outputs? Are the set working hours the only times when the work can be done? Giving employees some freedom in structuring their work may be hard to replicate elsewhere and substantially improve commitment and intention to stay.
Of course it’s easy to just throw money at a problem, but that is rarely effective for long, and it creates a vicious cycle of upward spiraling wages. As India’s sophisticated and skilled workforce continues to mature, commensurate employee engagement policies and practices need to follow.