Welcome to our exclusive interview series, "15 Minutes on EDGE," where we delve into the captivating theme of 'The New Talent Paradigm.' Our distinguished guest this week is Dr. Siddhartha Das, a revered General Partner at Ventureast, a prominent early-stage venture fund that places emphasis on technology and life sciences.
Ventureast, a pioneer among Indian venture funds, has established its presence in Bangalore and Hyderabad. Over the course of two decades, the organization has accumulated an extensive and diverse portfolio of investments.
Previously, Dr Siddhartha Das held the esteemed position of overseeing strategy and corporate affairs at Intel in India. He also served as the country head for Intel Capital in South Asia, further highlighting his remarkable expertise and experience.
The purpose of this interview is to gain a comprehensive understanding of the current hiring landscape within the tech and non-tech industries. Specifically, we aim to shed light on internal talent management strategies and solutions.
Our objective is to explore the challenges organizations face in effectively managing their workforce while simultaneously aiding individuals in shaping their professional trajectories and achieving career fulfilment.
The interview was conducted by Anannya Debnath, Content Head, EDGE.
To see the full interview, click here: https://www.youtube.com/watch?v=9kkkEjCND-o
For the audio podcast, click here: https://spotifyanchor-web.app.link/e/kyWGMgnDcAb
Below is the whole conversation for our readers.
Anannya Debnath: In the prevailing macroeconomic milieu, recruitment has been constrained. There exist three phases characterized by shifts in positions regarding team responsibilities, talent preferences, and numerical requirements. This framework was initiated last year, during June-July ‘22 to be precise, where numerous entities revised their positions on hiring figures and the desired skills mix within their establishments. Consequently, a novel paradigm emerged, signifying a substantial recruitment freeze across many industries. Furthermore, organizations are compelled to scrutinize their internal workforce more meticulously, not necessarily with the aim of downsizing, but to comprehend their staff better. How do you see talent marketplace playing an important part in this scenario? What are your views on the industry?
Dr. Siddharth Das: Certainly. Let's begin by taking a comprehensive look at the prevailing trends. It is evident that trends gradually take shape over time, requiring us to closely observe and scrutinize their origins and how we should address them. One prominent trend is the emergence of New Age businesses, particularly those intertwined with the internet. These businesses have witnessed substantial growth, spanning approximately two to three decades since their inception in the United States. Consequently, these enterprises demand adaptability to the new realities that have transpired, notably the disruptive influence of the ongoing pandemic. This global crisis has significantly altered our operational and professional landscapes, thereby becoming a defining characteristic of the past few years. Additionally, we find ourselves in a distinct demographic era, marked by a larger representation of millennials within the workforce and a mounting inclination towards the gig economy. These shifts necessitate our astute responses to effectively navigate these evolving circumstances. Moreover, an enduring horizontal trend, persisting for some time now, revolves around the emphasis on automation and artificial intelligence (AI). As these forces exert their transformative impact, we are compelled to ponder how best to manage, recruit, and retain talent. Consequently, these can be considered the three or four prevailing trends. In the 1990s, a similar disruption occurred with the advent of the internet economy, inspiring the seminal book "Reengineering the Corporation" by Hammer and Champy. It underscored the need for a process-oriented focus within the new economy, leading to the development of enterprise business processes like SAP. Fast forward 30 years, we find ourselves at another crossroads, where talent management assumes a vital role within organizations. As such, we must chart a course for managing talent in ways distinct from the practices of the past few decades. Hence, we stand at this critical juncture. These trends provide a glimpse into the overall landscape and macroenvironment, which will guide us to further explore and address your specific questions.
Anannya Debnath: At this current moment, I would like to initiate a discussion concerning industries such as FinTech, banking, telecom, pharmaceuticals, and healthcare. These particular sectors are widely recognized as being resilient to economic recessions, exhibiting minimal susceptibility to such downturns. However, they encounter a notable challenge in the form of a substantial turnover rate, which has historically been inadequately understood within these organizations. While the concern does not solely revolve around the inflow and outflow of employees, the primary issue lies in the departure of individuals, who, in addition to leaving the organization, also carry with them the valued clients and customers. In essence, they take along critical data and information. Naturally, this poses a more significant concern. As you have astutely noted, the entire paradigm has undergone a transformative shift. Therefore, it becomes imperative to explore how industries of this nature are proactively addressing this predicament and effectively thwarting the unauthorized transfer of data. Moreover, it is crucial to comprehend the underlying reasons why individuals opt to leave, primarily due to the lack of visible career progression. As a result, they seek employment opportunities elsewhere. Consequently, it becomes paramount to delve into the strategies and initiatives undertaken by organizations at this level to effectively mitigate this challenge and ensure the safeguarding of vital data. In today's landscape, data assumes a commanding position, serving as the bedrock of an organization's success, intricately woven into its overall operations. Hence, it becomes crucial to understand the comprehensive measures being implemented to minimize workforce turnover and curtail associated risks. What are organizations doing about it?
Dr. Siddharth Das: That's an excellent question, and it's clear that senior management has invested significant effort in contemplating solutions for this intricate issue. The industry landscape, particularly the information technology sector, has witnessed a considerable amount of turnover over the past two decades, particularly in IT services and enabled services. This phenomenon can be viewed as both a positive and negative aspect. On the one hand, it reflects the expanding economy and the abundance of growth opportunities that entice employees to seek greener pastures beyond their current organizations. Long gone are the days when individuals spent decades within a single company; instead, they actively explore external prospects. This trend has been unfolding for quite some time. Compensation can be identified as one contributing factor, as the industry experiences inflation in terms of remuneration, prompting employees to gravitate towards better pay and benefits. Another factor, as you mentioned, pertains to the lack of perceived growth opportunities within their current organizations. This brings us to the crucial question of how companies address this matter. This is where EDGE assumes a pivotal role, as it stands at the core of talent management within enterprises. It encompasses the various aspects of talent retention, growth, and even recruitment of top-notch individuals. EDGE boasts extensive expertise, having worked closely with numerous industry giants. The key lies in the development of individualized plans, previously referred to as individual development plans. However, in today's context, it is imperative to equip employees with the necessary tools to steer their own career paths. It is no longer restricted to periodic meetings with managers to chart growth trajectories. Empowering employees with the tools to control their own career destinies becomes paramount. Simultaneously, from the corporation's perspective, optimal talent management becomes vital. Traditionally, large corporations have operated with distinct verticals, with employees progressing within their respective verticals, often lacking visibility into opportunities outside their immediate sphere. The objective is to establish a knowledge base where corporations and management gain deeper insights into the organization's needs and required skill sets. This knowledge facilitates more efficient employee mobility, which, in turn, necessitates cross-skilling. Retention strategies may involve lateral moves rather than solely upward promotion if such moves offer enhanced career prospects for employees. Consequently, enterprises leverage solutions like EDGE, which empower both management and employees, facilitating agile and rapid cross-skilling and upskilling, optimizing the corporation's valuable resources. This, in essence, encapsulates my perspective on the matter.
Anannya Debnath: Indeed, it is evident from our experience at EDGE and the prevailing circumstances that organizations are actively implementing talent management strategies and solutions. As you rightly mentioned, while vertical growth may not always be available, lateral growth opportunities are being pursued. Individuals are being equipped with new skills and provided with options to choose their desired career direction. In light of this, I would like to seek your perspective as someone who possesses valuable insights into the industry. Could this be a contributing factor to the current trend of organizations freezing their hiring processes? It seems that internal employees are being mobilised, with individuals on the bench being redeployed to different verticals or reassigned to projects.
Moreover, we are witnessing a growing trend of organisations tightening their strategies, exemplified by recent actions such as Cognizant's layoff of approximately 3,500 employees. And this is not an isolated occurrence. Many major players are undertaking similar measures. With this in mind, I am eager to know where this trend is leading and how it will impact the industry as a whole.
Dr. Siddhartha Das: To begin with, the occurrence of organizations freezing hirings can be attributed to several factors, some of which are quite apparent. Firstly, the global macroeconomic conditions present significant challenges and impediments to rapid growth. In anticipation of an eventual rebound in demand, companies may have initially hired more employees during the pandemic than necessary. However, if the expected recovery fails to materialise, they are compelled to downsize their workforce. Hence, the prevailing global headwinds form one key reason for this trend.
Secondly, it is essential to recognize that every industry undergoes a maturity cycle, wherein the competitive landscape evolves, often leading to intensified competition. Consequently, organizations are compelled to prioritise efficiency as a means to thrive in this hyper-competitive environment. While innovation plays a crucial role in the early stages of the cycle, efficiency emerges as a primary driver during its peak and subsequent decline. Therefore, efficiency, alongside innovation, propels organizations to optimize their talent utilization.
Moreover, companies now find themselves compelled to approach talent management with the same diligence as they did with business processes in the 1990s. Back then, the focus was on enhancing business process efficiency through automation and similar initiatives. Today, the focus has shifted to human talent. While cost-cutting remains an imperative, it extends beyond reducing headcount alone. It also encompasses minimising real estate expenses, given that office spaces are being downsized due to a changing work dynamic. The modern corporate landscape, driven by the gig economy, necessitates a greater emphasis on effective management of virtual workspaces. Managers and supervisors must adapt to overseeing a dispersed workforce, no longer confined to the physical proximity of a traditional office setup.
In summary, the convergence of global macroeconomic factors, industry maturity cycles, and evolving workplace dynamics has prompted organizations to prioritize talent management as a strategic imperative. Recognising that talent may be dispersed across virtual environments, companies are compelled to optimize their human resources to thrive amidst hyper-competition and cost-cutting pressures.
Anannya Debnath: True. So, you're not as you said, and I totally agree with it that today workers are in charge. And as again, you said that that has led to a very big trend, the biggest trend I could say of this decade - redefining how do you attract, retain, develop and employ your people. And to do all of that, you need to think about jobs and careers in a different way. How can talent marketplaces play a crucial role at this juncture?
Also, as you said, that, you know, today it is, it is very, very possible that the person that you're interacting with day in and day out may not be in the next cubicle. Right. So, which brings us to the point that there is a demographic drought today. The size of the workforce is shrinking. However, the working population in every developed economy is starting to peak. World Bank data shows that the total population in the highly developed countries will peak around 2045, after which only countries in Africa, Indonesia, and India will continue to grow.
Dr. Siddhartha Das: Certainly, if we adopt a more optimistic outlook, it becomes apparent that we have the potential to cultivate a significant talent pool, some of which will remain within our borders while others address the needs of different geographic locations. This growth in talent sourcing and outsourcing presents a positive trend. However, there are two critical considerations when participating in a global talent pool. Firstly, technology cycles are becoming increasingly shorter. Consequently, the training department must display heightened vigilance and agility in upskilling individuals. Continuous training becomes imperative to ensure the productivity of this talent pool. By consistently updating their skills, individuals can avoid obsolescence, which often leads to substantial layoffs. Sustained education and training serve as a countermeasure against this challenge, given the rapid evolution of technology.
Secondly, when we introduce the aspect of artificial intelligence (AI), it is essential to assess the required skill level for the human interface to remain relevant. As conversational AI and generative AI advance, capable of performing tasks such as engaging in conversations or generating content, it raises questions about the necessary skill sets for individuals. To ensure their continued employment, it becomes crucial to develop talent in a manner that enables them to complement and surpass AI solutions. Therefore, the discussion surrounding talent development must focus on cultivating skills that are consistently superior and relevant to AI capabilities.
By addressing these considerations and investing in continuous education and talent development, we can maintain a workforce that remains valuable and gainfully employed. The ability to adapt to shorter technology cycles and to develop skills that surpass AI's capabilities will ensure the continued relevance and superiority of human talent.
Anannya Debnath: When discussing the concepts of upskilling and reskilling, it is often assumed that the focus is primarily on technological skills. However, non-IT employees tend to receive limited opportunities for skill development training. In light of this, I would like to inquire about the changes that have transpired, particularly in the post-pandemic landscape. It seems that there has been a shift from hiring individuals based solely on merit to a new phase where skills have taken precedence. The importance of skill sets has risen significantly. From your perspective, what transformations have you observed in this regard?
Dr. Siddhartha Das: The process of automation and the integration of artificial intelligence have been underway for some time now, and the pandemic, despite its disruptive nature, has also served as a catalyst for exploring improved methods of virtual work. While the IT sector has been at the forefront of these developments, other industries, such as the financial sector, particularly the banking and financial services domain, are also grappling with similar challenges. The turnover of employees and the need to adapt to technological advancements are prevalent concerns within these sectors. For instance, conversational AI is being implemented in banks, indicating that they are conscious of the impact that technology integration and implementation can have on employee training. The effects of this are likely to reverberate across the industry.
Regarding other industries like healthcare, which you rightly mentioned, they operate in more specialised and non-cyclical sectors. In the healthcare field, the extent to which automation will replace human interaction is still uncertain. Healthcare remains a highly human-intensive environment. However, if you visit hospitals, you can observe an increasing emphasis on automation and related technologies. Consequently, individuals involved in implementing and executing these automated solutions require training to adapt to the changing landscape. It is important to note that my knowledge in this area is limited, but I can confidently discuss the BFSI sector, which serves as a significant market for talent management initiatives.
Anannya Debnath: I have a question that has been occupying my thoughts, and while it may sound repetitive, I believe it is crucial to ask: What is the consequence of the scarcity of highly sought-after skills on a company's capacity to achieve growth through recruitment? Furthermore, how does this necessitate a shift in HR operating models towards systematic people-oriented solutions? I am particularly interested in understanding the significance and criticality of identifying and promoting career paths for employees. Could you shed light on the importance of this aspect and elaborate on the role that talent management solutions and strategies play in addressing these concerns?
Dr. Siddhartha Das: Certainly, critical functions are integral to every company, and it is imperative to place a heightened focus on succession planning to ensure that individuals are trained and prepared to assume these vital roles. Critical functions often face the highest demand in the industry, and to address this, retention strategies and succession planning become crucial. It becomes necessary to establish redundancy measures within the organization to mitigate the risks associated with the scarcity of talent in these critical areas.
In my previous experience at Intel, I encountered a shortage of analogue designers while there was a surplus of digital designers. This scarcity highlighted the importance of managing critical functions and implementing retention strategies. While cross-skilling may not always be feasible for specialised and vertically oriented critical functions, succession planning and upskilling should still be integral components of talent management solutions. Additionally, as the business expands, employees are more likely to perceive growth opportunities and remain motivated.
There is no universal solution to address this challenge, as each company approaches it differently based on their unique circumstances. However, it is crucial for managers to remain acutely aware of who the key employees are within their organization and take proactive steps to ensure their continued development and engagement.
Anannya Debnath: As you correctly pointed out, it is evident that every organization is considering or already implementing their own HR technology solutions in response to the evolving workforce dynamics. Considering this trend, I am curious to hear your insights on the business implications of these implementations. From a business perspective, how do you envision the growth and development of these talent management solutions within organizations?
Dr. Siddhartha Das: Talent management should not be confined to a narrow perspective of HR development; it must be viewed as a strategic imperative for the entire organization. It is crucial to build a compelling business case that involves the active participation of business managers. This entails demonstrating how talent management contributes to the company's overall success, including improvements in the top and bottom lines, enhanced productivity, increased profitability, and potential business expansion. Rather than being perceived solely as a cost center focused on developing individuals, talent management should be recognised as a fundamental driver of enterprise value. This shift in mindset requires involvement from the executive office and senior-level business managers who understand that talent management is core to the enterprise's future. By accurately identifying the necessary skills, determining who should be upskilled, and defining the required upskilling initiatives, organizations can effectively align their talent strategy with their business objectives.
Anannya Debnath: Absolutely. I wholeheartedly concur with your perspective. I must take this opportunity to express my gratitude for the enlightening conversation we've had.
Your insights have been immeasurable in value. I am confident that the viewers who listen to our discussion will gain the ability to chart their business plans and navigate their career trajectories with a profound understanding of the business landscape. This knowledge will undoubtedly hold paramount significance for them.
Therefore, I extend my sincerest appreciation for generously sharing your invaluable time with us. I understand the demands of your schedule, and I am truly grateful that you made this conversation a priority. It has been an absolute pleasure speaking with you.
Thank you.