When discussions about India emerge, much is spoken about
cricket, Bollywood and the amazing growth India is experiencing.
One rarely speaks with any urgency about the skill deficit that the
country is facing at the moment. Local industries and large
corporates have been voicing their concerns about this gap between
available talent and the knowledge pool for a long time now. A
country facing phenomenal growth needs a skilled labor force to
fuel this engine; without this fuel, India could fast lose its
Entrepreneurs will agree that, with the deteriorating quality of
skilled workers in companies, there is a huge demand and supply
mismatch of competent manpower which is hindering their
productivity. Many companies who have set up operations in India,
both SME's and even large multinationals face similar issues in
finding talented staff. Once they have finally found the skilled
talent, they face further challenges in retaining their gold dust.
Staff turnover for example averages 20% per annum and can reach
The country's case is a paradox of sorts. On one hand, India
has a workforce of around 525 million, being the world's second
most populous country. On the other hand, India has just 5,500
industrial training institutes and 1,745 polytechnics. Skills
imparted by vocational training institutions also do not always
match the requirements of industry. With 350,000 engineering
graduates per annum and half of the population just under the age
of 25, it is indeed a paradox. A recent publication by the Boston
Consulting Group on "What's Next for India" suggests
that demand for skilled labor will soon outstrip supply even at
entry level and that since training institutions are utilizing
technologies which are 30-40 years old, there is a clear threat
that graduates may not have the necessary skills for today's
Without doubt there is a need to develop human skills to foster
the envisaged growth in the various industrial sectors. If
achieved, not only will India's production rate increase
manifold, we will also be able to attain a higher level of
prosperity. What therefore is emerging is the clear opportunity
this presents to entrepreneurs and training institutions outside
India who want a piece of the action. The opportunity exists to
provide high quality vocational training at entry level and senior
level management training at another. Many British and
International universities and International vocational training
institutions have already grasped this opportunity and have set up
shop in India.
Another growing trend India is witnessing, is a reverse
'brain gain'. After decades of losing talent, India is
finally benefitting from the return of its NRI's (Non-Resident
Indians). Highly skilled professionals of Indian origin are
retuning to India and adding value to India's numerous growth
sectors such as Life Sciences, Technology, Retail, Infrastructure,
Education etc. Multinationals looking to enter India or who are
already operating in India are paying premium salaries for senior
executives. It is no longer surprising to see a General Manager
package reaching levels of $400k per annum. In short, companies are
willing to pay a premium to attract the right talent.
Global companies are paying executive search organizations
thousands of dollars to find Indians residing in the UK, Europe, US
to meet their ever demanding requirements of talent who can work
across different cultures; talent that can understand the
complexities of matrix management. Due to the skill shortages and
talent issues in India, many companies are picking talented
NRI's from their workforce to lead their entry or operations in
India . These individuals who are sometimes "Indian" in
name only, find themselves thrown into challenging and interesting
positions in India. Scenes from "Mumbai calling" are not
far from reality, caricaturing challenges faced by NRI managers.
For many global companies particularly US companies, India and
China are key markets they are targeting.
Doing business in India is very rewarding but equally
challenging. Once in India, it is by no means easy to manage teams
and work in a very different work culture. Many senior managers
have lamented at their inability to understand the Indian work
force or their mindsets. "What do we do, when we meet
management teams? Everyone agrees with us, no-one challenges us,
and when we get back to base, nothing moves on the
projects...!" So, talented people, brush up your CV's and
pack your bags!
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On 31 December 2015 the President gave his assent to certain amendments to the Payment of Bonus Act, 1965. The amendments have increased the wage threshold for determining applicability of the Act from INR 10,000 to INR 21,000 per month.
The Payment of Bonus Act, 1965 provides for the payment of statutory bonus to eligible employees. The bonus payable is to be determined on the basis of profits or on the basis of production or productivity of the establishment.
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