42 ■ December 2011 www.humancapitalonline.com ■

■ BY RICHA GULATI & SHATRUNJAY KRISHNA

CAREER MANAGEMENT

redefiningcareers in india

ompanies in India have been struggling withhigh employee attrition rates for manyyears now. Excessive employee turnoverincreases the costs of recruitment andtraining, apart from hampering employeeC

productivity. In service industries, attrition at seniorlevels can even lead to losing key clients tocompetitors.

In Towers Watson's Global Workforce Study 2010,which surveyed 20,000 employees globally, includingover 1,000 in India, career advancement was thebiggest influence on employees' decisions to join anorganization. Consequently, the study also found thatemployees in India who reported improvements intheir advancement opportunities over the previous12 months were more engaged compared withworkers without such opportunities. High attritionrates are often blamed on the lack of career

Employees’ hitting a career

advancement ceiling poses a

serious challenge to companies in

India. An overemphasis on

managerial careers may be one

factor driving this persistent trend.

December 2011 ■ 43www.humancapitalonline.com■

CAREER MANAGEMENT

advancement opportunities.Supplementing this thought is asurvey of senior managers andexecutives in India conducted by CIIand CSEND, which found the lack ofcareer advancement as the secondmost-important factor, salary beingfirst, fueling high employee turnover.

In order to study the careeradvancement opportunities in Indiaand the need for employers todefine new paths for their employees,it is important to understand thefollowing: 1) the mismatch betweenemployees' career aspirations and theopportunities available, 2) changesin organizational workforcedemographics over time and 3)employees' perceptions of theircareer needs.

A mismatch between career

aspirations and opportunitiesAs per Towers Watson's research,

Fifty-six percent of employees inIndia believe they must leave theirorganization to advance to a betterjob. Comparative figures stand at 43percent for the United States, 41percent for the United Kingdom, 38percent for China and 37 percentfor Germany. This clearly suggeststhat a large number of employees inIndia have come to seriously considerjob-hopping as a means to advancetheir careers.

Employing some standardretention tools, a few companieshave responded to the mismatchbetween career aspirations andopportunities by offering fast-trackpromotions. But this practice onlyexacerbates the attrition problem.Subject matter specialists cannotautomatically become goodmanagers and leaders and a myopicapproach towards employingpromotions alone to retain talent isbound to have counter productiveimplications.

Recent media reports alsoobserve that employees are workinglonger hours at the expense of areasonable work-life balance to gainfaster promotions and bonuses.

Another retention strategyadopted by companies in India,especially IT companies, is to offerthe technical staff employee stock

Figure 1. Age structures in the U.S. and India

Source: Towers Watson 2010 Global Workforce Study.

option plans (ESOPs) along withmanagerial promotions. But again,this solution often makes a badsituation worse. These plans giveemployees some "skin in the game,"through owning a share of thecompany in the form of stock. Butthe strategy has the unintendedconsequence of makingentrepreneurship more attractive tothem, thereby pushing turnover rateshigher in the IT industry.Entrepreneurship imposesmanagerial responsibilities andrequires a willingness to take risks,and to invest in yourself and yourown company. It is a well knownfact that TechSpan, NIIT, PertechComputers, Global Infotech,InfoTech Enterprises, STG andInfogain were all set up by ex-Wiproemployees. Other leading softwarefirms too are alive to these concerns.

It is ironic that employeesperceive a dearth of opportunitiesfor career advancement when somany organizations in India areplanning for substantial growth and

expansion. It could be inferred thatthese growth plans do not necessarilyinclude generating challenging careerpaths for the majority of employees.Instead, many organizations aredividing and even sub-dividingexisting career opportunities byimplementing faster promotions andsimilar such practices.

As a result, we observe anoveremphasis on managerial careerpaths in companies in India and thegrowth in management coursesconfirms this observation. India haswitnessed a sudden upsurge in thenumber of MBA institutes/coursesin recent years. Between 2005 and2011, the number of All IndiaCouncil for Technical Education(AICTE)-approved managementprograms jumped by 100 percent,and the number of managementseats grew by more than 200 percent.A number of technical institutions,such as engineering colleges, havealso started offering MBAs as anadditional degree. In the long run,this trend is likely to create a skills

44 ■ December 2011 www.humancapitalonline.com ■

deficit in non-managerial academicstudies.

In the next section, we investigatethe overemphasis on managerialcareer paths in light of the underlyingchanges in organizational workforcedemographics in India.

Changing workforce

demographicsRecent changes in organizationalworkforce demographics partlyexplain why the emphasis onmanagerial career paths is misguidedtoday, according to Tamara J.Erickson, who has authored aresearch paper on the future of workin People and Strategy.

Erickson says, "Many of today'sorganizational principles arecentered on the premise that theworkforce is shaped like a pyramid."Over the last century, the pyramidalor bell shape of the workforce - asmall number of older workers,moderate number of mid-careerworkers and many young workers -facilitated traditional upwardmobility. The result was a workforcewith a few top managers, somewhatmore midlevel supervisors/managersand many workers.

The pyramidal workforceharkens back to the prominence ofmanufacturing or process-drivenorganizations, such as the military,railways and government. Theseorganizations thrived on multiplesupervisory levels, and employeeswould move up the hierarchy tobecome a manager or supervisor.The business model requiredcommand and control and a verticalhierarchy to emphasize supervisionat various levels.

However, changing economictrends have gradually come to favortertiary industries where supervisionis not central to the success of theorganization. With the emergence ofservice/knowledge-driven tertiaryindustries in India comes a varietyof roles that create value forcustomers mostly through thecapability of the workforce.Accordingly, emphasis is shifting tobecoming a more capable workerrather than a manager or supervisor.In other words, employees move up

the organizational value chain as theybecome more capable or skilled. Inthese industries, quite naturally, thetraditional path of becoming asupervisor is not necessarilyapplicable. Workers can grow intotheir next career stage by becomingmore competent.

To understand the different shapeof today's workforce, we plot theage structure for a representativesample of employees in largeorganizations in India and the U.S.Clearly, there are stark differencesacross countries, possibly arisingfrom differences in business modelsas well as demographics. Emergingeconomies like India are reaping ademographic dividend, and theirknowledge-based and serviceindustries, such as IT, are savouringthe benefits that accompanyexplosive growth. As shown in Figure1, a huge pool of young talent - thosebetween age 25 and age 35 - makesup as much as 60 percent of thetotal workforce in India. The U.S.workforce, on the other hand, looksmore like an inverted pyramid, witha concentration of aging employees.As Figure 2 shows, the workforceused to be compatible with atraditional career path, with thelargest concentration of workers atthe bottom of the climb. The "Now"diagrams reflect new demographicrealities in India and the UnitedStates. Traditional upward careertrajectories may not be available forall young professionals, as there aretoo few managerial positionsavailable Thus, companies need tocreate innovative and unconventionalcareer paths to keep workers happyand control attrition rates.

Differences in the shape oforganizational demographics acrosscountries also implies that careeradvancement strategies may need tovary from one country to the next -for example, an approach thatsucceeds in the United States mightnot work in India. This has significantimplications for multinationalorganizations, which mustaccommodate the uniquerequirements of different countriesin designing their global careerframeworks.

CAREER MANAGEMENT

Richa Gulati works as a Senior Economist

with the Research and Analytical Services

team at Towers Watson. She has a

Masters degree in Economics from Delhi

School of Economics and specializes in

research related to talent and rewards

issues faced by organizations globally.

RICHA GULATI

Senior Economist ■ Towers Watson

December 2011 ■ 45www.humancapitalonline.com■

Figure 2. Workforce attitudes in India

How do you define career advancement in your job? (% of respondents)

Manager Specialist/technician

Increasing my compensation 65 61

Acquiring new skills that make me eligible for other jobs 61 63

Achieving higher status or recognition 60 58

Obtaining a position in senior leadership 60 52

Acquiring new skills that help me do my current job better 59 71

Moving up a well-defined career path 56 59

Moving laterally across the organization to take ondifferent but equivalent roles 32 35

Some other way 7 6

Three most significant barriers to career advancement (% of respondents)

Manager Specialist/technician

The organization has reduced the number of job levels so 57 41there is less advancement opportunity

It is difficult to obtain a transfer or lateral movement 55 51

It is difficult to identify the opportunities available to me 42 35

There are no career advancement opportunities in 33 35my current role

Employees in positions above me are choosing not to retire, 32 36reducing my options for advancement

My manager does not advocate on my behalf 28 36

I do not believe I have the skills required to advance 19 22

I do not have the personal desire to advance 13 17

Source: Towers Watson Global Workforce Study 2010.

As has been reported in themedia, large Indian companies arealready luring away talent frommultinationals in India with thepromise of better careeropportunities. Foreign multinationalfirms in India, being offshoots ofglobal parent companies, tend tooffer fragmented and stationary rolesto employees. Large Indiancompanies, on the other hand, areriding the wave of explosive growthand are offering their employeesexciting opportunities to innovateand manage large-scale projects.

Employees speak outWe now look at employees' ownopinions (Figure 3) before proposingsolutions to the mismatch between

their career aspirations and availableopportunities. As part of TowersWatson Global Workforce Study2010, a sample of 1,101 employeesfrom midsize to large organizationsin India shared their thoughts aboutcareer advancement.

Our comparative analysishighlights the differing careeraspirations of managers andspecialists. While 65 percent ofmanagers regard pay raises as themost important manifestation ofadvancement, 71 percent ofspecialists rate acquiring new skillsmore highly. Other importantrewards include (1) gaining highstatus and a senior leadershipposition for managers, and (2) highercompensation and a well-defined

CAREER MANAGEMENT

Shatrunjay Krishna is a Senior Consultant

with Towers Watson Talent & Rewards

Group in Gurgaon. He has over eight years

of experience in large scale transformation

projects and their implementation on the

ground.

SHATRUNJAY KRISHNA

Senior Consultant ■ Towers WatsonTalent & Rewards Group, India

46 ■ December 2011 www.humancapitalonline.com ■

career path for specialists.As expected, no more than one-

third of managers and technical staffview lateral job movement as careeradvancement. However, more than50 percent of them consider thedifficulty of transfers or lateralmovements a significant barrier tocareer advancement.

The way forward: A Towers

Watson perspectiveAs there is not enough room at thetop for everyone to be promotedup, offering multiple career tracks isone of the most viable solutions,especially for 25-to-35-year-olds.Employers can restructure theircareer paths from the traditionalmodel of grade promotion tocompetence development.

In our work with clients who havesuccessfully taken careerdevelopment thinking to the nextstage, we help them redefine careersin terms of parallel ladders in linewith their business and operating

model. These ladders reflect theorganizations' job families/functionsand define progressions within andacross them (see Figure 4).These career ladders serve threefundamental purposes:1) Inform associates and managersof the multiple career tracksavailable. This helps them understandthe rich universe of opportunitiesand empowers them to plan theirown careers.2) Identify advancement oppor-tunities in terms of both lateral andvertical movement. Supported byclear competency requirements,these ladders also help employeesunderstand their natural talent andmove in the direction of their owncompetencies. This is a businessenabler in terms of developing acompetency-focused workforce. Adiagram like the one in Figure 4illustrates how these career laddershelp identify potential career paths.3) Help companies forecast theirworkforce requirements at variousstages of the ladder and build HR

programs that align employees'expectations with business realities.

These career ladders must berooted in the organizational contextto work. Deployed appropriately, thiscareer framework can be central tothe strategy of creating an engagedand productive workforce.

ConclusionEmployees' hitting a careeradvancement ceiling poses a seriouschallenge to companies in India. Anoveremphasis on managerial careersmay be one factor driving thispersistent trend. Today's workforcewill not fit into a traditionalorganizational hierarchy. One solutionis to adopt multiple career tracks thatidentify different job families/functions and thus open up careermovement within and across thesejobs. For the strategy to succeed,however, organizations mustcarefully align all aspects of talentmanagement (including rewards)with the new career models.

CAREER MANAGEMENT

Figure 3. Multiple career ladders

Source: Towers Watson

HC