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Young and restless

Padmaja Alaganandan, Gyan Anjan Kaur, and Prakrite Agarwal     October 28, 2007

The Indian Employee today is very savvy. Riding on the back of an employment boom, he has taken full advantage of the shift of power in the employer-employee equation.

From plush offices equipped with world class facilities to HR policies that cater to his every whim and fancy, today’s employee is demanding it all and will make sure he gets it, gift wrapped (with a postage paid envelope attached for anonymous feedback, just in case…). You would expect that after all this and more, the employee would stick around for a while and feel grateful.

Our guess is that if you are an HR Manager in an Indian company, you would know better. After watching talent walk out through your front door and poring over their exit interviews for clues, you know that the answers are not that simple.

Every time you fix one problem and stop to breathe, there is someone else tugging at the sleeve of your precious workforce, luring them away with an employment promise better than yours. So then, how do you get them to stay, and more importantly to contribute positively to your organisation’s success?

The Best Companies to Work for in India study 2007 examines what thousands of employees from all over the country have to say about what makes them ‘tick’. Over 50 per cent of the respondents are between the age group of 25 and 35; hence our findings are influenced heavily by the changing workforce demographics in India, with the younger lot becoming the dominant voice in the country.

While the older age group still constitutes a significant proportion of the workforce and makes valuable contributions, there may be a case for having segmented strategies to address the aspirations of these two sets of employees.

Having entered the workforce during a time of ‘plenty’, the young employee has aspirations and attitudes that differ considerably from those of his predecessor. High levels of remuneration, fast paced growth and open communication are some of the things taken for granted by employees these days. Yes, rewards are extremely important and any company that underestimates their importance may choose to do so at the risk of facing a mass exodus.

However, monetary rewards have been relegated to the position of a ‘necessary, not sufficient’ condition for engaging employees. A closer look at what employees aspire for reveals needs that may sound simplistic; however, the solutions required are far from being simple.

Employee Aspirations: Different  Perspectives
 The Young and the Disgruntled: Engagement levels amongst employees fall consistently as one moves from senior to middle to junior management and staff, across industries. The younger lot has expressed lower levels of satisfaction with respect to every dimension of engagement under study, with the greatest contrast being around pay, benefits and surprisingly even company image and leadership— indicating that they don’t feel as connected to the organisation as employees at senior levels. The critical challenge that employers face is engaging employees at junior levels, where jobs don’t provide as much scope for enrichment; however, aspiration levels and sensitivity to differentials are perhaps at their highest.
Equality of the Sexes: Women respondents have matched men on each dimension of employee engagement under study. Women in the workforce today have the same expectations and aspirations as men and are not hesitant to voice their opinions.
Breaking the IT Myth: IT companies, which have been the pioneers in modernising their HR processes and have brought in a number of innovations, are not way ahead when it comes to engagement levels. Non-IT companies have actually reported marginally higher levels of engagement, though they lag behind in areas such as quality of work life and work-life balance. It is difficult to say which of the two faces a tougher mandate given their differing employee profiles and legacy. However, the respective return on investment in terms of engagement levels is similar.
The Skeptics: Engagement levels are typically higher amongst new joiners and old timers. Those who fall into the ‘at risk’ category in terms of engagement levels are employees who have spent between 1-4 years in the organisation. The trend shows that employees possibly go through a typical cycle of wonder, disillusionment, reconciliation and consolidation before they feel secure and connected with the organisation. Once the threshold of four years of tenure in an organisation has been crossed, engagement levels are on the upswing.
Make Work Interesting: Our study reveals that one of the top reasons why employees choose to stay and contribute is the work itself. Employees want to feel ‘involved’ with the work that they do. They want to be able to apply their minds and feel a sense of accomplishment at the end of the day. Who does not like a bit of a challenge and a chance to prove their worth?

So what does this mean for companies aspiring to be best employers? For starters, companies need to take a long hard look at the jobs that they offer and build in some elements of autonomy, the right amount of challenge and scope for innovation.

If you want employees to go beyond the call of duty and deliver exceptional performance, give them the scope and flexibility to do so. In today’s world of narrow specialisation and increasing division of labour, the task of creating interesting jobs becomes even more daunting.

It’s not about changing the basic content of the job or overloading the employee with so-called ‘challenging’ targets; it’s about changing the way the organisation and the employee expect the job to be executed. A word of caution here—the savvy employee wants the best of both worlds— the challenge without the stress, giving work-life balance issues a clear thumbs down.

Upskill Your Employees: Another important determinant of employee engagement is giving people the opportunity to grow and develop. Again, a move up in the hierarchy without much enrichment in job content may work for a while, but once the initial sheen of the new ‘designation’ wears off, it’s back to square one.

The discerning employee wants the opportunity to build on his competence and capability, not just for the job in his current company, but for his longterm career. He wants the time ‘invested’ in the organisation to count, boosting his employability and the credentials on his CV. If the current organisation won’t provide it, he is not shy of calling it quits and looking for the opportunity elsewhere.

Stuck in this Catch 22 like situation, what can employers do to prevent trained and valuable people from moving on? The answer lies in providing employees with visibility on their career prospects within the company and the support to get there. However, this needs to be more tangible than the generic sketches and ladders that are flashed pre-placement presentations. People believe what they see, and nothing drives home the point better than a role model who exemplifies the opportunities the organisation can provide.

Organisations need to provide people with structured learning interventions, regular information, dialogue and feedback around career prospects so that people may grow with the organisation, rather than at its expense. Employees who see a long-term future with the company are more likely to be valuable contributors.

Be Fair and Clear: The traditional as respect for age/authority and conflict avoidance don’t hold true in corporate India today. The attitude of the young workforce today is more akin to some of the Western cultures where there is more openness, questioning and debate around issues and their merits rather than quiet submission.

An employee who feels he has been shortchanged by the organisation will definitely be disengaged and will spread the negativity around. It is essential to ensure that each employee feels the organisation has been fair to him in all its dealings. Whether it is pay, benefits, promotions or assignments, the transparency and objectivity behind each decision needs to come through and processes should be designed to eliminate the scope for any bias.

Equally important is the clarity and consistency in communicating performance expectations. An employee who knows what he is supposed to do and why he is supposed to do it and how he will be rewarded for it, will be more motivated to work towards it—emphasising the need for role and goal clarity. Companies that have emerged as the best employers this year seem to have a good grasp on the aspirations of their employees, some doing a better job than others.

Each of them has top notch HR processes that incorporate many of these principles to varying degrees. The top 15 have consistently outclassed the others both in terms of the design and the deployment of their HR processes and policies. Their employees have expressed a much greater degree of satisfaction as compared to other respondents with each and every HR process, be it performance management or promotions or training or exit, acknowledging and appreciating the effort that these organisations are putting into creating an employee focussed work environment. Interestingly, the same cannot be said regarding the feedback on parameters of pay and benefits, indicating that a sustainable employment value proposition goes beyond monetary rewards.

Rising employee aspirations have taken competition amongst employers beyond the realm of pay packages and glittering offices. The younger lot is not driven by extrinsic rewards alone, which gives employers the opportunity to build differentiators that are more sustainable such as long-term careers, meaningful jobs and work culture.

With the possibility of double-digit salary increments eroding India’s competitive edge on costs, the maturing of employee aspirations may have come at a very opportune time. It is possible that the thinking employer may be able to substitute extrinsic rewards with intrinsic ones, to some extent. As usual there is no simple answer and it is difficult to crystal ball gaze on this issue.

It is, however, very plausible that if the growth trajectory of the Indian economy continues as many predict it will for the next decade or so, the volatility in the capital and financial markets will get mirrored with similar trends in the talent market. It seems, the long run will not provide any cover to organisations that wish to stay at the cutting edge—the hypercompetive talent market is here to stay.

(Padmaja Alaganandan is a Principal Consultant, and Gyan and Prakrite are Consultants at Mercer)


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