Sunday, May 16, 2010

Talent Stereotypes

There are a host of inefficiencies in the global labor market. Just like relocation, we tend to go with what we know. More apparent is the bias towards the local:

Karugu, who now works as a construction superintendent, is one of a little-appreciated piece of America’s immigrant story: highly educated and previously successful professionals who cannot pick up their careers in this country.

This is why doctors drive cabs, engineers wait tables, lawyers work as bakers. The transition is not easy.

But for many — refugees, green-card lottery winners, visa holders — it also meant beginning another line of work because of language barriers, credentialing requirements, poverty and the perception that an immigrant is not as qualified as a native-born American.

Experts say some farmers do hire immigrants to take advantage of them. Mr. CaƱamero, the union leader, says 15 to 20 cases of serious abuse are reported each year, in which workers have not been paid or do not have enough food or water.

But in most cases, Mr. CaƱamero says, that is not why farmers turn to foreigners. He said hiring was governed by a web of prejudices about who are the best workers. For the very hot work in the summer, farmers prefer to hire Africans. For strawberry picking, they prefer women. “It is not written anywhere,” he said. “That would be terrible discrimination. But that is how it works.”

There exists discrimination for and against foreign born workers. The same is true for domestic employees. A lot of good talent falls through these cracks. As a rule, we are lousy judges of skilled labor.

The idea that four years of higher education will translate into a better job, higher earnings and a happier life — a refrain sure to be repeated this month at graduation ceremonies across the country — has been pounded into the heads of schoolchildren, parents and educators. But there’s an underside to that conventional wisdom. Perhaps no more than half of those who began a four-year bachelor’s degree program in the fall of 2006 will get that degree within six years, according to the latest projections from the Department of Education. (The figures don’t include transfer students, who aren’t tracked.)

The higher education imperative has also been pounded into the head of employers. Hiring managers tend to trust candidates with a college degree. Most are not acclimated to fishing in the pools of the unwashed.

During the 1970s and 1980s, the Japanese achieved major advances in manufacturing management, which led to their rise as an economic power. The Japanese economic miracle and the country’s new manufacturing skills and methods surprised western firms; but the Japanese had done this by studying, adopting, and eventually perfecting the best practices of western companies. The Duke team believes that India is achieving similar feats in workforce development: India has learned and perfected the best practices of leading companies that have been outsourcing their computer systems and call centers.

Faced with severe talent shortages; escalating salaries; and a lagging education system, Indian industry has had to adapt and has built innovative and comprehensive approaches to workforce training and management. The initial focus was on training new recruits and filling entry-level skill gaps. Now, these companies are investing in constantly improving the skills and management abilities of their workers and in providing incentives for them to stay and grow with the company. There is also widespread collaboration between industry players and academic institutions to accelerate the growth of needed talent pools.

We identified seven key areas in which Indian companies have developed innovative practices; 1)Employee recruitment 2)New-employee training 3)Continuing employee development 4)Managerial training and development 5)Performance management and appraisal 6)Workforce retention 7)Education upgrades.

There are few practices or programs that, taken on their own, could be considered innovative or unique. US and European corporations have excelled in many of these functions for decades. The Indian innovation comes from the way these programs are integrated into day-to-day operations and into systems of career advancement and reward; the application of technology to managing and integrating each of these processes; and the executive-level decision making that is performed based on these processes. Just as enterprise resource-planning systems are used to manage manufacturing and distribution operations in leading firms, the Indian systems help oversee the workforce management and development process.

The burden for transformation falls on the firm seeking talent. Implementing the above innovations would untether the company from expensive labor markets. I could imagine workforce development migrating from the public realm to the private, infusing the Indian model into a client's business. Given concerns about looming talent shortages and lingering structural unemployment, I'd bet the demand for such services would be strong.

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