Preface – Hurconomics for Talent Management: The Creation of a Business-driven HRD Missionary

Preface

It has been almost two decades since I wrote HRD Missionary. The book was written for a National HRD Network conference on the theme of the HRD manager and was subsequently used as a text and reference work by many institutions. Several individuals personally acknowledged to me how much it shaped their thinking and careers.

A lot has changed since then. We now live in a very different India. Everything is now measured in monetary terms. Relationships, loyalty, trust, openness and commitment are increasingly being thrust aside in favour of profits, professionalism, flexibility, strategy, speed and ROI. There are two sides to this change. On the positive side, we are doing many more things and doing them faster than ever before: acquiring new skills, becoming more innovative, taking greater risks, networking more extensively, expanding employment opportunities and creating new ones, and bringing out the best in ourselves. India’s GDP is on the rise and the world is watching us with curiosity. On the negative side, however, we are becoming over-commercial, subjecting ourselves to more stress, losing the human touch, and caring less for each other. On the whole, we are perhaps less at peace with ourselves than before.

Some of the experiences I have had in the last few years provide some evidence of these changes: IIM students are willing to forego high-paying jobs and start their own firms instead. Several of them have begun highly profitable ventures (making and selling idlis, for example), are doing extremely well for themselves and are being noticed by society at large, as compared to those who have opted (more conventionally) for lucrative jobs.

Loyalty has been replaced by professionalism and mobility. Today, one’s professionalism has come to be assessed on the basis of one’s mobility, the number of jobs changed, and one’s market value. This is in stark contrast to the refusal of some CEOs in the late 1980s to even interview anyone who had changed jobs in quick succession.

HR managers have been found to change their jobs frequently, and attrition among HR managers has been found to surpass that of IT professionals. Good HR managers have set up their own enterprises or have become CEOs of businesses. Increasingly, line managers with little or no professional preparation are being given HR jobs and they seem to be doing better at them than the less loyal or high-risk-taking HR managers.

Share prices keep hitting the ceiling. Technology is accessible to anyone with money, and the supply of money itself has increased. It is available in plenty.

Salary levels have shot up in Asia, and particularly in India. Talent has come under the scanner. Talented people are in short supply and firms are willing to pay for talent. Talent is being sold like a commodity, and the search is on for those who can best quantify it, measure it and prove its worth. Most firms have introduced new technologies to assess talent and fix salaries. Performance-based pay and incentives, loyalty pay, and so on are now common in organizations.

The number of recruitment agencies has increased, and Internet-based and other innovative forms of recruitment have become the order of the day.

Most HR managers spend an enormous amount of their time recruiting employees and trying to retain them. This activity has become the single largest consumer of time for HR personnel. Value addition by HR departments has become a focus area. Climate surveys, assessment centres, 360° feedback, and so on have become particularly relevant today as employees have begun demanding higher wages and incentives.

Most employees would like their companies to provide them all their long-term benefits in the short term and in cash. This practice reached such alarming levels that the Ministry of Finance was compelled to introduce the concept of fringe benefit tax (FBT).

India in the twenty-first century is a young nation. It is said that the average age of Indians today is around 25 years. Many new-age CEOs are under 35 years of age. They are restless, impatient and full of ideas, as indeed they must be when they are driven by high expectations all around.

What, then, is the HRD missionary to do? Remain a missionary or adapt to the altered circumstances? If she/he does not change course, it is going to be a difficult journey. Even survival is uncertain. If she/he steers the ship in the direction of the wind, and perhaps even sails ahead of it, she/he may be able to direct others.

I promoted the idea of the HRD missionary in an effort to help preserve some of the HRD manager’s values and goals. When I first developed the concept of the HRD missionary, her/his primary focus was as it still continues to be the people in the firm—their competence and commitment—and building an enabling work culture for them. If she/he stayed focused on keeping employees happy, motivated and competent, the business would achieve its goals. Her/his focus used to be on the HRD processes, and she/he did not worry much about the outcome.

Now times have changed and the HRD missionary has to change too. What is needed is a change of focus. The HRD missionary has to change her/his focus from people to business, or else she/he is unlikely to survive as her/his company may not last for too long. The last decade has seen the rise of strategic human resource management, where people are treated as strategic resources, and HR managers have become business partners or strategic partners. In the decade beginning 2011, people will become synonymous with business. There is no business without people. HR professionals are going to become business partners and business-makers.

People are tools. Business is supreme. Money matters. With money, you can buy talent, technology and just about everything!

Profits matter, results matter and your contributions matter. Understand how you can contribute. Understand how everyone can contribute. Your firm pays you for your contributions, and unless you contribute, or are seen to contribute, you have no future. Unlike earlier times, when firms allowed themselves considerable periods of time to decide whether or not an employee was performing as expected, firms now adopt a short-term perspective. Employees remain for the short term, and perhaps so will you.

These are the some of the new rules of the game. Do you want to remain a missionary in your old garments? Or are you willing to change? Be as adaptive as the swami who educates the masses and reaches millions. No one goes to listen to him lecture on the Vedas and the Upanishads. People go to him to hear him talk on stress management, leadership and managerial effectiveness, and he uses these opportunities to change the thinking of his clients. Earlier, the swami had devotees; now he has accountants, cashiers, customers, event managers, sponsors and collaborators.

As a response to these trends, I see three options in particular:

  1. Fight the new trend and bring back the old organizational culture.
  2. Join the trend, support it and merge with it.
  3. Jump on to the bandwagon, appreciate the positives in the new trend, reestablish the better aspects of older traditions, and integrate them with present practices. Use the past to modify and actively create present trends.

This book chooses the third alternative. It appreciates the new waves of consumerism, commercialization, capitalism, growth, globalization and technological access, and tries to rediscover people-oriented management practices for a fast-changing world. It tries to use the new language that is often kept covert but underlies all decisions and thought.

This book is therefore meant for the HR manager in her/his new avatar of the business-driven HR missionary. Although the term machinery is more appropriate than missionary, I continue to use the old term to indicate the energies required to lead the change without abandoning the older values. Nothing can be achieved without a missionary zeal and spirit. We need HRD missionaries to keep reminding us of the universal virtues of HR—openness, collaboration, transparency and trust. Without these values, HR will lose its credibility and organizational cohesiveness will come undone.

The book focuses on talent management. Managing talent has always been the concern of HRD managers. Talent management is the new currency for human resource management. The concerns are the same as before, but the HR function has become much more focused now. The focus shifts from developing talent to managing talent. Talent management includes all that we do to procure, induct, initiate, socialize, train, monitor, develop, recognize, retain, utilize, and multiply talent. Talent refers to the competencies or knowledge, attitudes, skills, motivation, values, traits and qualities required to perform a variety of tasks that promote the growth and wellness of an organization and its constituents. Hurconomics for Talent Management presents the tools and techniques required to manage talent. It explains the new role of the business-driven HRD missionary and enables her/him to perform this role more effectively. It also examines some of the methods she/he can use to meet her/his company’s short-term and long-term goals. The chapters deal with both short-term and long-term HR practices.

The long-term methods are closer to the old HR practices and are directed towards institution-building. Long-term HR is concerned with building intellectual capital, branding (including employee branding), value management, culture-building and HR research. Short-term HR deals with all the techniques and tools for making a significant short-term impact, that is, profit maximization, cost reduction, quality enhancement, customer-base expansion, and so on. Some important techniques are competency mapping, recruitment, integration and assimilation, performance management systems, 360° feedback, assessment and development centres, the use of retention tools and pay for performance.

Finally, the title of this book introduces a new term—hurconomics. Hurconomics is a way of looking at people, processes and events in economic and financial terms. It deals with the economics of human resources and attempts to analyse HR activities, processes, events, systems and decisions in terms of costs and returns. It also explores the financial metrics or measures of human resources. While these could include costs, benefits, ROI, and so on, a novel unit of measurement proposed and used extensively in this book is cost of time (COT).

HR investments or costs may be measured in COT units. A formula is then used to give such investments a financial value. Today, this formula is commonly used by HR practitioners and researchers, and its worth has been widely recognized.

Essentially, then, this book is about implementing different HRD activities for the benefit of the individual, the team and the organization. It is a ready-to-use guide for a business-driven HRD missionary to perform the critical role of managing talent. A business-driven HRD manager is concerned principally with mantras that yield immediate benefits, help solve immediate problems and issues, and help to make a demonstrable difference. As her/his CEO is equally smart, she/he is under pressure to prove that she/he can indeed make a difference.

Fortunately for some of our HR managers, many CEOs have not yet fully understood how the HRD missionary can make a difference. If you prefer to remain ignorant of the best practices suggested in this book and choose to keep your CEO ignorant of them as well, then you simply need to manage recruitments, salaries and administrative tasks. You will always be in business as several CEOs are happy get just this much and no more from their HRD people. However, if you are a serious HR missionary with a professional background and your CEO is also a professional, you will find yourself using HR to actively drive business.

Who will benefit from this book? This book has been written specifically for all those who relate to the idea of the HRD missionary or would like to be one—unit heads, line managers, CEOs, business heads and HRD professionals. It is a readily available tool to introduce and implement various HRD interventions in organizations. It helps to get the best out of people in terms of talent (competency, capability and culture), and also adds tangibly to a company’s profits, bottom lines and top lines.

Written in simple language, the book is presented as a practical handbook that can be used by new entrants to the HRD function, and as an effective tool to devise the HRD strategy for any organization.

This work would not have been possible without the constant facilitation provided by my wife Jaya in every possible way. I thank her for supporting me while I had to spend enormous amounts of time penning my thoughts. I would also like to thank my family members Raju, Kritika, Nandini and Ajoy, who keep listening to my views and critiquing them. Thanks are also due to Merlin George, Manager, TVRLS, who has always provided the administrative support I needed. This book was published in a different from by Oxford & IBH first in 2008. I would like to thank Vijay Primlani for his support in letting me revise the book and for permitting me to get it published.

I would like to acknowledge the editorial support provided by Anirban Sarma, former editor at Random House, for his editorial assistance. I also thank Amarjyoti Dutta, Senior Managing Editor, Development and New Media at Pearson, who readily agreed to publish this book without any hesitation. I would also like to thank Shabnam Dohutia and the other members of the editorial team for their support and keenness to provide high-quality editing for this book. Most of all, I would like to thank my team at TVRLS, including Mr. Santhanam and others who organized a series of programmes to test the material in this book in the form of workshops such as “Invest 20 and Direct 2000 to 20,000” and “Hurconomics”. I am also thankful to the managers who attended our programmes and to the students of IIMA who used parts of this book and provided their comments, which encouraged me to bring out this publication.

I welcome readers to send their comments and experiences of using the concepts in this book at raotalam@gmail.com or tvrao@tvrao.com.

 

T. V. Rao
10 February 2011