Attracting talent, especially younger ones, can be challenging when it comes to Tier 2 and Tier 3 cities. During a panel discussion on ‘The Talent Challenge’, organised by Fortune India, Bhuvana Subramanyan, CMO, Randstad India, says it’s a challenge to find and retain talent in India. She adds the situation is especially pretty acute in Tier 2-3 cities. She says initially, talent crunch was present in many forms and shapes and then reached the acute stage. It crept immediately after the Covid pandemic, and is still there, becoming a virus-like challenge itself, she opines. “Every organisation is going through this. Skill talent has always been a challenge, and skill drain has been an issue for many years,” she says. The country as a whole didn’t address it, but now, when it has become acute, organisations are taking it a lot more seriously, she adds.

Binu Rajendran, director, Walkaroo, says his footwear manufacturing company headquartered in Coimbatore, mostly had standalone manufacturing facilities right from 2002. At that time, Walkaroo started creating a roadmap and recruited mid and senior-level talent. “But our factories are in smaller states. Now we feel Coimbatore is also a bottleneck, and are we thinking we our office somewhere else. So definitely, it's an issue we have,” he says.

V.S. Gannamani, CMD, Addeco India, says the quality of talent is an issue companies are struggling with. “Onus is on the education system and companies setting up shops. They must put resources and time to train talent. Cause that's the real issue we have.”

Dinesh Thakkar, CMD, Angel One, says promoters have to recognise that human capital is an important part of their success. The CMD of Mumbai-headquartered online brokerage says growth could only come from the contribution of human capital.

“In 2019, we are kind of a phygital company and found it difficult to recruit talented people. I believe it comes from the mindset of the promoter who believes if he has capital on the table, he will dictate the terms. Like previous panellists said as a promoter you have to recognise that the human capital is a very important part of your success.”

He says if a company could grow at a CAGR of 14-16%, with the right talent it can grow at a CAGR of 24-25%. “In 10 years, the company grew at 14-15% CAGR will be 4X, while the other that retained right talent would be 10-11X. So human capital created an additional 6-7X growth.”

On legacy promoters having trust issues and those who want to empower only a small group of people around them, Rajendran of Walkaroo says there is a need for promoters to think differently. “We as an organisation were better-equipped cause among the group of 6-7 who started the company, except two, all are outside the family. Right from the start, there was a clear intent that we have to create an institution rather than an organisation. That’s one of the reasons we started bringing talent from outside.”

He says when promoter talent is a roadblock, they would want to step out. “Quoting an example. Earlier each one of us was running one unit. Then we realised we need to consolidate. Six stepped back and identified six people, put together a team and told now you run the business and we mentored them for two-and-a-half years, and then it stabilised. Now we are going to the next level and are consolidating at the corporate level.

On mindset change that must happen in promoter-driver businesses in Tier-2 and Tier-3 cities, Rajendran thinks promoter-led businesses work with a long-term mindset to develop a business over time. “They are not subject to quarterly reports. They can take time and build out their businesses. The question is how can I take along leadership that’ll take the company beyond me? How do you instil the same belief in the next generation of leadership? A culture that needs to get cascade down, will ensure the next generation of leaders will continue to grow. To me, a promoter-led business comes with a lot of advantages.”

On what are changes needed to be incorporated in companies’ HR policies, especially in Tier 2-3 India, and do those policies need to be different than those having a national presence, Subramanyan of Randstad says things are changing every day. “There are policies for work from anywhere. I know companies that have the flexibility to work from home forever. Those changes are happening across organisations.”

She says it’s also about how you continue to recognise the right talent. "If they are away from the headquarter, typically there is a FOMO (fear of missing out), and of course, virtual and tech helps."

She asks: “Can you, as a leader invest time to meet the talent there (in Tier 2-3 cities)? Are you empowering the local leaders to take care of their people? You can take the problem and then design policies. There have been changes around leaves, paternity leaves, work from anywhere, and health policies.”

To attract the younger workforce, which has been a challenge for Tier 2-3 companies, Thakkar of Angel One says after Covid, working from anywhere was a major attraction. “So, they could work any place they liked to. They could pursue their passion. Youth want to see if he would be of any value to the company. Under our diversity programs, we have about 2,000 out of a total of 4,000 people who are from 1,000 pin codes. If you look at them, they are between 26-28, so the most important thing is to give them the freedom to work from anywhere.”

Rajendran says in the last 4-5 years, the company has built a robust brand for Walkaroo among the campuses, especially when they are hiring MBAs. “So when it comes to highering skilled talent, branding helps.”

Gannamani says youngsters are looking for progress financially, from the societal perspective, and learning and development perspective as well. “How do companies in Tier 2-3 cities offer the progress, that's the question,” he says, adding that India doesn’t just comprise Tier 2-3 cities but many cities and towns where there is a big talent pool. “The key is can we train them and bring them to Tier 2-3 cities where the industry is growing.”

On the issue of diversity, Subramanyan says when it comes to diversity, it does not just include women. “There are many women who have to get permission to even step out of the house. Education is the key. If organisations can nurture public-government partnerships, take education to those smaller towns, then women will have opportunities and they will be able to speak up at home.”

She says it's the responsibility of both men and women to break barriers. “Women also have to do that. Organisations should help by offering roles for such women and help create a balance. The objective is to create an ecosystem that enables women to do what they have to do, both at home and at work as well. Organisations must identify those roles.”

Rajendran also says that diversity is not just limited to gender, it is to be inclusive in all aspects. “We have various people across different functions, not just in white-collar but blue-collar as well. Firstly, they are treated well, policies are equal and that’s why we have faced no problem on that front.”

Thakkar says that having good talent in Tier-2-3 cities is important. “If I look at fintech. Capital is important but diversity is even more important for us to attract local as well as global talent. We run programmes to attract women who have taken maternity breaks. We started a programme 'unpause with Angel One'. In two weeks, we got 700 applications. Because of these changes in policies, we allow them to work from anywhere, we run training programmes. Initially, we had 12-13% of women employees. Today, we have 34% of women employees working with us across hierarchies. We don’t look at clock-in or clock-out times. When you give a project to a group and track their progress through tech, it encourages women to work anytime and be flexible.”

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