A-Pac shines, India outshines

NEW DELHI: Asia Pacific hasn’t seen this before. China’s GDP is steadily growing at 9% plus. Japan, from almost a flat growth, should be nudging 2.7% this year. Korean GDP is at 5%, Malaysian at around 6% and Singapore at 7%.

Well, if Asia-Pacific hasn’t seen this before, India too hasn’t had this kind of a dream run ever in the past - a fourth consecutive year of 8%-plus GDP growth. This is well underpinned by the Hewitt attrition and retention, ’06 report. Almost every major country in the region - India, Japan, China, Singapore & Malaysia - are creating jobs in high single or double digits, and, of course, while reeling under surging attrition.

“Asia had always followed the flying geese model,” says Subir Gokarn, chief economist, Crisil. This means different countries at different stages of economic growth cycle at a given time. This is perhaps the first time that growth is so well synchronised across the region. “The regional growth of around 7% is creating a hugely powerful growth dynamics in the region,” says Mr Gokarn.

This year will be the fourth consecutive year of 7%-plus GDP growth for major East-Asian economies, says ADB. Amid the good news, India has some better news. Growth, investments, foreign direct investments, forex - take any economic indicator, and China leads. But, surprisingly, on recruitment growth and attrition levels, (for white collar) India is at the top.

Here’s why? China’s growth is coming more from manufacturing-led blue collar workers, and the skill-talent dynamics is very different from India where the action is on the knowledge-led services sector. “India needs a lot of talent - much higher up the value chain vis-a-vis China - making the right talent a very critical component here,” says Sharad Vishvanath, practice leader at Hewitt India.

Think about a call centre executive (supposedly low-end job in India) versus a shop floor worker in China, and you get the picture. Understandably, the demand-supply mismatch at that skill level is far higher and, hence, the talent crunch in India is being felt far more intensely.

The talent scarcity is made worse by the fact that many sectors of the Indian economy are rapidly growing, all at the same time. Sizzling IT and ITES firms continue to clock high double-digit growth even as many new and old sectors have joined the fray.

Sunrise sectors from aviation to hospitality and telecom to retail are all emerging at the same time. Not just that, even the good, old, labour-intensive manufacturing is registering robust growth. As a result, virtually every sector of the economy is sucking away talent at a pace never felt before.

In this talent war, the services sector leads from the front. Because they require far less industry specific skills, unlike manufacturing and, hence, they are fairly flexible in hiring talent. For example, the BPO sector is now hiring shop floor managers to head big BPO teams. Similarly, a good customer relationship manager can fit in well in sectors as diverse as hospital to hotels, retail outlets, airlines and a BPO centre.

“This fungibility of employee skills in the services sector is making attrition and retention challenges far more worse,” says Mr Vishvanath. It’s no good that the economic boom has not been preceded by an upscaling of talent supply. Serious skill demand-supply mismatch means India has millions of unemployed even as war for talent continues.