With looming uncertainty in today’s economic outlook, there’s a general consensus that profitability is king. This focus on profitability also means that there is a greater need for organisations to manage people risks more effectively. In fact, that was the main takeaway from the Aon’s Global Risk report in 2017, where more than half of the 10 major business risks were related to human capital.
With the spotlight on India, Aon interviewed leaders and key clients for the People Trends (APAC) 2018 report and identified these top three people trends that are shaping the country’s mammoth economy in 2018.
1. Changing face of employment
The global rise of the gig economy, which priorities short-term contracts over long-term employment, has proved to be more than a passing fad. Mirroring the rest of the world, the contingent workforce in India is growing rapidly and is projected to account for more than 10% of the formal sector workforce by 2025.
This trend poses an interesting conundrum. Currently, 63% of Indian organisations are offering long-term incentive plans to junior and middle management. This total reward strategy to attract top talent is necessary. However, in light of the uberisation of talent, HR practitioners must also review their policies to hire, manage and engage independent contractors.
2. Driving innovation through ‘interpreneurship’
As small companies scale into large corporations, they often become cumbersome and risk-averse. For many leaders, this paradox of growth represents one of the biggest challenges affecting innovation, which in turn affects the future competitiveness of the organisation.
To tackle this challenge of balancing next quarter profits and next decade’s growth, Indian organisations are encouraging a culture that enables ‘interpreneurs’. Interpreneurs are individuals who possess the coveted attributes that an entrepreneur has—creativity, resourcefulness and passion—traits that drive innovative breakthroughs. The only difference? Unlike entrepreneurs, they are employees in an organisation. This approach of cultivating change agents from within has proved successful for the creation of Playstation and Post-it Notes by global giants Sony and 3M respectively. For massive Indian conglomerate Mahindra, this commitment is expressed as the brand value of ‘alternative thinking’. However, for innovation to thrive, it needs to be backed with deliberate and explicit HR measures that allow idea creation among employees.
3. Using AI in recruitment
Talent assessment tools have always been effective in allowing managers to hire based on data as opposed to hunch. However, recent technological advancements in this field have been a complete game changer.
Based on accumulated data over a 48 month period, Aon found a correlation between the use of AI in assessment and the increase in persistency ratio of a life insurance firm in India. Persistency ratio indicates the proportion of policyholders that continue to fund their insurance policies—an important business metric in the industry.
Similarly, by tracking analytics on hiring practices within the hospitality industry, Aon has discovered a related increase in customer satisfaction in just 24 months.
Ultimately, by deploying adaptive artificial intelligence in their hiring assessments, organisations can improve their capabilities to attract and retain the best talents, provide better value to their customers, and increase the profitability of their organisation.
It’s now up to Indian organisation to decide how they will respond to these trends. Will they wait and watch? Or will they adapt to better manage people risk and boost business growth?
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