Skewed Nature of Indian Workforce

-- The following blog dissects possible reasons for maladies in the skewed nature of Indian workforce. It explores possible conditioning which effects such situations and discusses possible changes in environment which can effect radical changes, though not overnight of course !


I have noticed widely that Indian workforce when in India seems to be undervalued and the same people when outside India, sway the World like no others. Ever wondered why did this happen? Well, I tried to...


It is generally noticed in the Indian society that when a child is studying in class X, he (I will use this gender for sake of ease, but the same applies to girls too) makes a broad choice of his career. Whether he is to get into commerce or medicine or engineering, is what decides his choice of subjects during class XI and class XII and more often than not later too.


Education in India is mostly bookish in nature, with scant exposure of students (albeit a few schools in Metros) to the other aspects of a child's development. At village, taluk, district and Tier II city levels, the parents still goad their children to study "Harder" to one day become like the "District Magistrate" or "Superintendent of Police". But thankfully enough, parents in cities are themselves exposed enough to know that there are careers outside of the government sector which are worth pursuing and are remunerative enough. But the point to be made is that this thought process and paradigm shift has only happened among cities post 1990 when people had started widely experiencing the benefits of free-market private enterprises. It will take another generation (our generation) which will percolate this thought process to the level of Tier II cities and villages. That too would be made possible only when private enterprises start actively engaging the "time share" of these villagers, thus exposing them to alternate Worlds to the all pervasive government jobs as a ticket to prosperity through one's hard work.


I have digressed from the main topic above to drive home one point - i.e. the more the younger generation is "Encouraged" to pursue courses restricted to engineering, medicine or commerce alone, the more "Clones" will India generate. Indian education system generates "Parroted" clones, who are not comfortable in unfamiliar or creative situations. They are good at doing "Known" tasks, but ask them to think out-of-the-box and most would develop cold feet.


This is also due to the way our culture has evolved. We are brought up on a steady diet of "Indian" customs, traditions and practises, which in more ways than one are sacrosanct. It is noticed that most of these make the Indian society known for its stability and resilience especially in the areas of relationship bonding, spirituality, elderly care, etc. But at the same time, it makes a majority of us "Dependant" in our thinking process, which always searches for anchors in traditions or books or heresy, thus preventing us from thinking "Radically" different. No wonder that one is producing traditional clones and we expect them to do path breaking and original research for which most Indians are not culturally attuned to do!


This is of course not to say that we have not had great scientists who have given us wonderful inventions like the indigenous space and nuclear program and other similar breakthroughs. But the numbers of such are too few to write home about them. For a country of 1.1 billion population, the achievement profile is mostly reflected in areas where the "Dependant" thinking is the key to success. Take for example the growth of IT/ITES industry or the Contract Manufacturing Sector. How many Indian firms have made it big in IT Products or New Molecular Discovery? Practically very few!


These result in the following two:

a) The business models of most India centric businesses have become labor-arbitrage based which assume availability of labor to be cheaper compared to availability of technology in India (which is the truth as of date) and

b) The demand-supply gap of the number of "Quality" jobs available for our youth has widened as more and more jobs as described in point one are proliferating (not the quality jobs).



Both the results make the employable youth in India a commodity (a resource) in the commerce landscape of India. This coupled with the fact that most talent today is available (abundantly) has only particular skill sets - engineering, medicine and commerce. Abundance in skill sets such as above further brings down the cost of labor in these areas and further skews the cost of labor becoming cheaper than technology.


The possibility of the skills sets being diverse but the requirements of such skills to be few is low because this has not happened through history in case of the developed nations and is also unlikely to arise in a growing economy like India, where new avenues for commerce are growing by the day.


Approaching the original argument - Why does Indian workforce when in India seem to be undervalued and the same people when outside India, sway the World like no others?

Let us look at students who venture out of India. It is a known fact that most of them venture out after exploring the options available in India first. These students once educated outside India are exposed to a different education system, wherein the emphasis is more on learning by self and learning through doing instead of merely studying from books. A result of such education and abundance of jobs for skilled labor outside India, makes these people contribute to their fullest potential for advancement of economies outside India. Many return to India in their later years and bring with them new practices and technologies to the Indian shore.

It is clearly a problem of the chicken and the egg. The greater the diversity of skill sets, the more would be the possibilities open for such professionals given India's growth story. The greater the openings for varied skill sets in India, the higher would be the likelihood that parents and job seekers alike would opt for them. So, where does India begin?

The easier and obvious choice lies in addressing the way our education system works. We should try and alter the methodology of teaching at these institutions, giving a greater stress on learning and discovering inner strengths in students and prodding them to make a career through exploitation of those strengths. This would in turn result in broad basing the Indian skill sets as people take up professions of their choice.

Through broad basing the availability of skills in India, the market forces too would be forced to change the economics of availability of resources such that the labor would become costlier than technology and thus lead to people being paid better for their services. This is exactly what happens in developed nations, where there is perpetual shortage of labor. Maybe a brain drain may not be a major issue after all till the time that India can provide adequate employment to its multitude of skilled labor - it has been proven that the so called "brain drain" has been economically beneficial for India.

In conclusion, the Indian labor force tends to do better outside India compared to within in India due to constraints inherent in our education system and also in the labor employment markets in India, both of which feed on one another. So, in order to bring improvements in both, a concerted effort needs to be put into modifying the educational methodologies in India and through spreading the awareness about alternate career choices to the vast majorities in the hinterlands of India through the spread of free-market enterprises to rural India, both of which have begun in their own small ways.

INDIANIZATION of MNCs

-- The blog is a short essay about strategic problems and issues faced by typical MNCs, during their teething years, when they set up their first subsidiary or a franchisee in India.

I have worked mostly with MNCs and have observed a few patterns, not only in the firms that I have worked with but also in other similar firms. Many of the observations were experienced first hand.

The MNCs especially the ones which set up subsidiaries or franchisees in India start out with being a 'Small Company', while they test the Indian waters. During this phase, the workforce is mostly ex-patriate, who bring with them the international workplace culture of the MNCs. To name a few such traits:

a) Respect for time.
b) Respect for individuals.
c) Focus on customer relationship.
d) Small and manageable goals.
e) Adoption of One-look, one feel of firm's global standards.
f) Tight coupling of Indian policies with international corporate body.

Many points listed above are common to the "Small Company" concept, except maybe for the last two, since they are relevant mostly for the MNC firms. The priority for most MNCs is to first establish their international brand in India and at this point while they seek to understand the Indian market, they are not very interested in garnering the maximum market share. Thus the focus on the above traits.

The firms realize soon that the Indian markets are unlike most markets in developed nations but most MNC Corporate Centers fail to recognize this aspect in time and tend to treat Indian markets just like any other foreign shore market. For instance, Indians are by far the most 'Price' conscious lot, who want the best 'Quality' but at Indian price points. The day the management in the Indian office of the MNC realizes this difference, there are two occurances:

a) Most ex-patriates are unable to grasp or adopt a localization strategy (especially in case they hail from developed nations)
b) Firms start hiring Indian managers to understand and tackle the localization issues.

It is at this time that certain changes start happening in the organization. Some of these include:

a) Strategies to capture higher market share start taking dominance.
b) Cost cutting and austerity measures start creeping into the firms.
c) Indianization of products/services start taking place - One look, one feel starts Indianizing.
d) Greater autonomy is demanded from the international corporate body to ensure higher flexibility in local decision making.

But the downside of such a localization strategy is that some of these tenents do conflict with the global value system of the MNC. At a more micro level, the strategic changes occuring include:

a) The organization grows in size and the culture becomes less entrepreneurial or "Small Company" or conflicts with the Global values system of MNC.

b) To garner greater market share, new and non-niche sub-segments are explored, thus leading to dilution of global value proposition of the firm (which was in any case an expected fall out of localization).

c) The value system of the organization which should typically accompany such a shift in strategy is usually not done in time due to obvious pressure and lack of support for such a change from the global corporate office.

The fallout of the above three usually leads to a downwards spiral of the firm's Indian presence and performance. The immediate loss is in the brand equity of the Indian arm of the firm, wherein the firm sells to its clients the global value proposition but on the ground executes using the value system as adopted by the Indianized firm. The customer gets a conflicting message through this sales-execution gap and which in turn leads to an erosion in brand equity of the Indian arm of the firm.

I have seen this happening in two firms where I have worked. But having said so, the firms have hope, since I have seen the resurgence too happening. The hope is in form of:

a) Appreciation at corporate level about the uniqueness of Indian markets.

b) Restructuring of value system for the Indian office keeping in mind the Indian realities.

c) Communicating the new value system to its people and ensuring its adherence by one and all.

d) Posting excutives from other developing countries at senior management positions, who have led in such developing markets like India, for the parent MNC.

Changes as discussed above have helped several MNCs to redefine their existence in India and have helped them make India one of the key markets to invest in, making it a win-win strategy for the Global MNC and Indian market place.

In conclusion, Indianization of policies and strategies of MNCs is inevitable, given the nature of Indian markets, which are very different from the markets outside India, especially the markets in the developed nations. But the secret of success for MNCs is to bring about a paradigm shift in the strategic and operational policies at all levels be in the global corporate office of the MNC or among the managerial staff within the Indian office. In fact the purpose of liberalization in India was to ensure that the best practises from outside India are brought to India but unfortunately, many of these best practises are not relevant in India unless they are Indianized.

P.S.: The views are my own and might not be comprehensive. Your critiques, experiences and feedbacks are most welcome.