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Talent Study

Dun & Bradstreet India conducted a survey on some of the top companies of India Inc. for analysing the industry views on India’s current education system. Top and mid-level management from the human resource departments of these companies participated in the survey. This chapter is based on primary research conducted on different areas such as talent crunch, demand-supply gap, industry-institute interaction, recruitment factors and attrition rate, which form a transitory phase between education and employment.

A sample size of around 125 BSE listed companies from manufacturing and services sector was considered for the purpose of this study. Manufacturing companies from diversified sectors of energy, chemicals, textiles, gems and jewellery, food, pharmaceuticals, healthcare, infrastructure, auto components and engineering among others accounted for three-fourths of the sample companies. The rest comprised of companies that are engaged in providing IT-ITeS, broking, BFIS and hospitality services. Around 60% of the companies surveyed had staff strength of more than 750 employees.

Void between industry-sponsored education and tie-ups with financial institutions

On an average, graduate employees accounted for around 58% of the surveyed companies’ employee strength. This in turn reflected the huge potential for higher education (MBA, MS, MPhil and PhD) aspirants through regular or distance education. The study also found that around 58% of the companies finance their employees for higher education — an indication of their willingness to invest in grooming their employees for future. Further, 20% of the companies have tie-ups with financial institutions for academic purposes. It is likely that such collaborations with financial institutions and NBFCs, if carried out on a larger scale, could increase higher education enrolment, and at the same time, decrease the talent crunch and demand-supply mismatch that the industry faces.

India Inc. confirms talent shortage, expects demand-supply gap to widen

The study reveals that even though India Inc. has a young demographic profile, around 45% of companies face talent crunch. The issue of talent crunch has been pushed to the backburner due to the present economic situation that has negatively affected rate of recruitment in corporate India; however, in the medium to long run, as the economy gets back on its feet gradually, talent shortage is likely to aggravate and play a decisive role.

Nevertheless, around one-third of the companies who participated in the survey strongly disagreed about talent crunch.

Besides, the respondent companies, on an average, displayed a moderate level of confidence in the ability of the current education system to meet the industry demands in terms of skill sets.

The situation is worse on the supply side, as the gap is widening at all levels in India. There is an ongoing mismatch between the level of graduates most Indian universities churn out and the requisite set of skilled workers needed by the industry for entry-level corporate positions. It’s feared that the current scenario will worsen, as around 45% of the companies expect the demand-supply gap to widen in the near future. Again, around one-third of the companies, mostly from the manufacturing sector, strongly disagree about the widening of this gap.

In short, although majority of India Inc. strongly agrees on talent shortage and the widening demand-supply gap, the level of satisfaction and optimism displayed by the remaining one-third companies is the silver lining.

Work experience emerges as deciding factor for mid-level management recruitment

The study showed that work experience is the topmost criterion whereas project management skills coupled with leadership skills are the least important criteria for recruitment of midlevel management. Although work experience ranked among the topmost criteria, it was closely followed by educational background as a deciding factor for recruitment of mid-level management. More than half of the companies surveyed considered soft skills as moderately important whereas more than one third of the companies rated project management skills as one of the least considered criteria for recruitment.

Positive approach from India Inc. to foster better industry-institute interaction

Around 72% of the surveyed companies concurred that the current education system gave less exposure to industry dynamics and emphasised on better industry-institute interaction. It is accepted on a national level that the coming together of the corporate sector and university level institutions is required to facilitate creative partnerships between public and private sectors in the field of higher education. Gradually, partnerships between the industry and university level institutions that support research is now emerging in India. Collaborative research projects, training centres, incubation centres are some prominent forms of such partnerships. The US Bureau of Educational and Cultural Affairs (BECA), for instance, is setting up a Higher Education Council in India to facilitate greater industry-institute collaboration in educational projects. This initiative reflects the level of interest displayed by non-corporate sector too.