Sheila H. Khatri, president of Moti International
India is energy starved. Energy is a limiting factor in how fast it’s economy can grow, making the energy sector a huge potential growth opportunity. And a number of energy firms are eyeing India as a lucrative market where creative projects can come to fruition. But there are a number of obstacles companies face in India, and there have been several energy firms that have either pulled out of the market or are scaling back. One challenge is that energy firms face a significant workforce shortage in India, a land of 1.2 billion people.
The shortage exists primarily in finding technical skills. There are few places where foreign firms can cherry-pick technical talent, often only a handful of government organizations. To deal with the shortage, many Indian companies are choosing to create institutions where they train their own talent. For a foreign firm, setting up a school and a business in India may not be an option.
If you are exploring India as a growth strategy, expect to make investment in your workforce. Also, when building your workforce, be aware there is a large cultural gap in going business between the US and India. Based on my experience in India developing the State of Maryland’s Trade Office staff and creating my firms incubation service for western companies seeking to do business in India, I’ve compiled 9 workforce tips and facts to keep in mind as you strategize an India market-entry plan.
1. Build your brand in India before you ramp up your workforce.
Brand recognition helps if you need to build a workforce. Top people want to work for solid companies. If you don’t have brand recognition in India, expect to pay high salaries.
2. Invest time in hiring your top people.
Getting good top people is important, because influential people they often bring their team with them when they switch jobs. Employees tend to follow good managers.
3. Go to the workforce.
Research the universities that have programs with the skill sets you need most and establish your operations as close as possible to your talent pool. Because India’s workforce is young, expect to provide in-house training of technical and soft skills.
Beware that many young professionals chose to move back “home” after reaching personal milestones such as getting married or becoming a parent. So setting up your India operations near your workforce could save you from high and costly attrition.
4. Don’t skimp on the interview.
It is very important to have multiple rounds of interviews for all job levels. Include oral and written components in the hiring process. Don’t rely on just a phone interview. Video-conference is a minimum.
Despite the use of English as the business language in India, the gaps in business culture between the US and India are huge. Many companies have fallen into this pitfall. Use the interview process as a multi-faceted filter to ensure a good fit.
5. Be patient and have perseverance.
The promise of India is its young workforce, but don’t expect it to behave maturely. Expect some young hires will accept your job offer, then unexpectedly not show up on their first day because they’ve accepted another position for a small salary increase.
Basically, cash is king. Development programs are nice but not a key factor in accepting a job or staying with an existing employer for most young employees.
However, an opportunity abroad is important for mid-level management, and can compensate for perceived deficiencies in salary. A job based in India for 12 months, then abroad for 2 months, could be an attractive on-site development opportunity for most mid-level managers.
6. About salaries.
Wages generally consist of (1) salary; (2) flexible component: may include a home rent allowance, driver allowance, gasoline allowance (if the employee doesn’t use it, it doesn’t effect the employee’s salary but the employee may be expected to pay taxes on it); (3) bonus; (4) health care.
Salary hikes in some sectors are expected every year.
7. The perks.
Common perks offered by Indian companies include subsidized or free: transportation to and from work, breakfast, lunch, Indian teas and coffees, and liberal policies for home emergencies. Home emergencies can include visits from unexpected out of town guests.
Typically, Indian companies have Monday to Saturday work schedules, but most multinationals have Monday to Friday hours.
8. A big culture gap.
Be clear on what your India operations is intended to be. Is it a support center for the parent company or a true extension of the company in India.
To transfer the corporate culture, officials from the parent company should set-up the Indian entity and transfer the corporate culture. But do not send someone from the parent company only because he/she is of Indian origin. For example, the IT guy who has worked for your company for the past 25 years may not be the best ambassador for the parent company. The business culture in India has undergone a rapid change from 20 years ago. It is sometimes more efficient for someone, with no preconceived notions, help your Indian talent adapt to the parent corporate culture.
9. The title.
Titles in India are important. Especially when dealing with a young workforce.
For example the title: Manager adds credibility in the marriage market – everyone wants this title for social significance.
The above 9 tips and facts highlight some of the common issues and questions we’ve heard and dealt with in helping companies enter the Indian marketplace. Many of these challenges can easily be avoided with good planning, patience and perseverance. In addition, I highly recommend having an employee on the ground in India in the very early stages of establishing your market entry plan. The long-term pay-off can be huge.
The most common reasons companies choose not to put someone in India is cost and risk – but both of these reasons can be mitigated by utilizing an employment surrogate, such as Moti International. A surrogate allows you to engage a person on the ground as if they were your employee, but transferring the administrative and legal role to an entity in India. With such a resource, your company can generate critical business intelligence, develop key relationships and obtain strategic feedback . The more information on the marketplace you have, you are more likely to succeed in India.