Gearing up for the future, organisations need to focus more on technology and be prepared for the impact that it may make on its people. Talking about the fast-transforming HR landscape and the job market in India, Anish Sarkar, CEO, Mercer shares his valuable thoughts on the changing trends in HR, the growth of Mercer since he joined the organisation, the people-assessment market in India and how it is evolving.
It’s been close to four years at Mercer for you. How has the growth trajectory been so far? Besides the growth through acquisitions, what has been the organic growth?
In the last four years, we have had substantial organic and inorganic growth. We normally do not disclose our numbers but we have drastically grown our business from where we were four years ago. More importantly, we have increased our portfolio in India with acquisitions and partnerships . Recently, we have partnered with HealthifyMe. Mercer is also a very large investment advisory company and with the acquisition of India Life Capital, our position in the market has been further strengthened. We are always looking at technology-enabled and skill-enabled solutions for our clients to assess their people and with the acquisition of Mettl, we can offer our clients a satisfactory solution. Apart from this, we have seen substantial growth in our traditional businesses, such as compensation benefits, M&A consulting, rewards and data solutions. We are also working with big IT companies — not just for their workforce in India, but globally as well.
A lot is being said about the changing job market. What kind of new roles or job functions can we expect in the next few years? Do you think India will experience the same change as in the advanced markets, given that we still have cheap labour and a growing population?
Automation is becoming a buzz word in the industry and companies are using it very smartly to cut cost and improve productivity. Our view on this is that side by side new jobs are also being created and the new job will need a different set of talents, which is a big challenge. It is not that there is a drop in the number of jobs but new skill sets are required. Automation is impacting technology companies, IT- enabled services and banks and financial services. In general, people will need specialised and technical acumen for the future.
For instance, the role of a surgeon will totally change in a couple of years requiring him to know the tools to be used and the process of diagnosis. The role of analytics did not exist five years ago and now every department has an analytics team. The chief digital officer role was unheard of two years back but now our clients enquire about the roles and responsibilities related to this post. There are many ways to address the problem of skill gap, such as hiring freelancers and co-orpetition (where companies partner with their competition to hire a common workforce for very niche capabilities and share the cost). Another way is to partner with agencies and staffing companies for specialised talent. The biggest challenge for the companies is to predict the kind of skills they may require for their workforce in the next five years. Despite the fact that we have cheap labour and a growing young population, jobs will be taken away by automation. Yes, we have a large population but the most essential fact and biggest challenge is to provide them with the right skills.
“The scope for assessments in India is massive and to stay relevant one needs to find new ways of assessing people, such that it is more reliable, accurate and predictable. It is about how accurately the results can predict the competency of an individual for any role or for a promotion.”
What’s in the future for employee-assessment companies? How are the newer technologies, such as AI changing the game? What does Mettl need to do to stay relevant?
Assessment is a massive untapped market in India and the kind of work that Mercer and Mettl are doing is just scratching the surface. Mettl has provided a very technologically-advanced tool to assess the people in a company to give scalable results. The traditional ways of assessing people are expensive and are more effective only with top management. The platform that Mettl provides on the other hand can assess infinite number of people working across levels. Hence, it is more scalable and customisable.
The scope for assessments in India is massive and to stay relevant one needs to find new ways of assessing people, such that it is more reliable, accurate and predictable. It is about how accurately the results can predict the competency of an individual for any role or for a promotion. Gamification of assessments is also one area that needs a lot of focus and innovation.
Do you agree that businesses in India are too customer focussed and employees are taken for granted? Isn’t it high time employees came at par with customers? When and what will bring in this change?
It is very difficult to make a statement that organisations are more customer focused. A famous IT company said that employees are number one, and it has also proved it over the years. I feel that ultimately businesses are more business oriented and everybody has to achieve their financial targets. In India, there has been a massive realisation that people are more important irrespective of the businesses. CEOs of the companies are taking significant steps to focus more on the people agenda. They are asking themselves how much they are investing in their people. Organisations are realising that their HR policies are primitive in nature and they need to invest more to retain the right talent if they wish to grow from 500 cr. to 5000 or 10000 cr. While it is difficult to decide whether employees should come first or the customers, organisations are starting to realise that they need to focus on their people.
India will have a growing retired population in the near future. Earlier most retirees were government employees blessed with social security in terms of pensions and other benefits. Now, a large number of people will retire from private jobs with little planning for their post-retirement years. While this will bring in a societal change, how will it affect the job market? Will the retirement age be increased? What do you foresee?
This is a huge problem not just in India, but globally as well. It is a big elephant in the room, which people do not want to see. The companies need to educate their employees regarding this matter and enable them to save more money. NPS (National Pension System) is proving to be beneficial but the younger generation is unwilling to invest money in it. Companies are bringing in NPS and asking the younger generation to invest money to help them in the future. There are a lot of financial awareness platforms facilitating this. We also provide companies with retirement plan solutions and help them create awareness amongst their people.
There is also a crisis in the form of mid-level people, who after the 40s, feel stagnated or fight to stay relevant. What’s the survival mantra for them?
There is no silver bullet. It is a fact that when people touch 40 they find it difficult to adapt to the changes in technology and reskill themselves. While the millennials are very important to the organisations, they do take care of their Gen X population as well. They do realise that they have valuable experience and respect that. A lot of e-commerce companies still carry their old people whom they started with. Also, a lot of new B2C start-ups are hiring people from traditional FMCG companies. People who are in their 40s should be flexible in nature and open to changes. They should be in the learning mode.
Which are the cities that will see an influx of jobs? Bangalore, Delhi, Mumbai, and Pune seem to have reached their optimum level.
All growing economies, such as India and China, have certain cities which play a very important role in their growth. There are about 20 cities in India which have the potential to become mega cities. Our research on this subject focussed on how employers and employees look at certain things differently in a city. For instance, people (employees) seek different things in a city to make them continue to live there, while employers may or may not seek the same things. The state capitals are joining the race and are giving an equal fight to the traditional metro cities. The choice of moving to a city is affected by very different factors these days, for instance, the level of pollution. In the next decade we will see many more mega cities in India.
What role will STEM play in filling up jobs for the future?
If we see the technology part of the sector, STEM skills will continue to play an important role. While the hard skills are very much important and will remain relevant, people also need to start focussing more on skills which are softer in nature, such as flexibility, learning ability and adaptability.