Talent is Critical Asset For Business Growth: CII Survey | SupportBiz

Human Resources

Talent is Critical Asset For Business Growth: CII Survey

Economic sentiment is buoyant, but availability and access to quality talent continues to be a serious impediment facing organisations.

Reflecting a positive business sentiment, corporates in India are upbeat about growth prospects in the economy and are of the view that the critical drivers which would steer industrial performance forward would be a conducive economic, financial, tax and regulatory eco-system, followed by skills and talent of the workforce.

According to a study a Towers Watson - CII Industry Opinions Study, economic sentiment is buoyant, availability and access to quality talent continues to be a serious impediment facing organisations.

The study which aims to gauge the economic sentiment prevalent within industry and the role played by 'workforce' in shaping the future of businesses, covers the views of over 300 industry experts including 100 CEOs/Presidents/CFOs across Indian and multinational companies spanning 23 sectors.

According to the Study, while Respondents are of the view that paucity of talent would continue to pose a problem over the next 5 years. About 64 per cent of the respondents are of the view that attracting and retaining key talent is likely to be a major obstacle to the growth of industry across sectors.

Chandrajit Banerjee, Director General, CII stated that: "The survey reiterates the CII view that business sentiment has turned positive on the back of pro-reforms approach of the government, a stable macro-economic environment and a focus on pertinent issues such as the 'Make in India' campaign launched by the government. Addressing issues related to workforce would indeed be crucial for driving the next wave of growth".

India is betting big on manufacturing through the promising 'Make in India' initiative. However, the problem of attracting and retaining quality talent also remains a key challenge for the manufacturing sector with about 60 per cent of respondents having highlighted this challenge.

Talent, a critical asset
Recognising the importance of talent as a critical asset for steering the next wave of growth, companies have indicated that there are four important factors related to skills and talent which can potentially hinder growth over the next five years.

"While attraction and retention of quality talent continues to remain a challenge, the future envisages a tougher business ecosystem in light of rising wage costs, potentially an inadequate supply of skilled talent and workforce productivity. Initiatives like 'Make in India', 'Digital India' and other public private partnerships around 'skilling' will aid in improving talent supply and enhancing productivity, however the onus of nurturing and investing in talent will remain a critical organisational imperative." said Vivek Nath, Managing Director, Towers Watson India.

In fact, 42 per cent of companies surveyed believe that the rising share of workforce costs would be a major challenge that can impede growth, while 53 per cent have identified inadequate supply of skilled workforce as a significant impediment. Around 39 per cent of respondents mark slow labour reforms while 46 per cent believe that stagnating workforce productivity poses serious threats to industrial performance.

Commenting on the workforce scenario in the next five years, a majority of the respondents anticipate the widening of the wage gap between the highest and lowest earners across industries.

Around 60 per cent of the respondents from small organisations and 54 per cent from large organisations believe this wage inequality will increase over the next five years.

At the sectoral level, 70 per cent of companies across the Financial Services sector, 68 per cent from Professional Services, 62 per cent from Consumer Discretionary, 54 per cent from Manufacturing and 36 per cent from Energy & Utilities believe the wage gap will increase.

Wage gap

What is interesting to note is that while the wage gap is widening, the majority expects wages to rise above the inflation level in next 5 years. A large proportion of respondents feel that a major chunk of wage increase would be cornered by senior positions or high earners in their industry and not so much would be disbursed at mid-level or junior positions. On a positive note, a majority of respondents expect the number of jobs generated in their industry to increase in 5 years, mostly at junior levels with the most promising sectors being Capital goods and Transportation (89 per cent) and Financial services (83 per cent).