What should be the people strategy for new business  

Challenges encountered by a more established company while setting up a new business are quite similar to that of a new company entering the same business

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Thanks to the pandemic, the business setting today is constantly evolving and dynamic. As a result, companies are continuously required to take stock of their assets and business strategies in order to ensure unfettered growth.

In order to meet this change, companies have had to hire people for roles that simply didn’t exist in the past. In an earlier discussion with HRKatha, Bhavya Mishra, director & head of HR, Lenovo India, one of the leaders in electronic goods manufacturing, had said that the Company was hiring professionals for a new services and solutions business, an area the Company hadn’t set foot in before.

Srikanth Karra

“One will obviously need outside resources and vendors. It is essential to establish one’s HR from the industry that one will be working in. The focus should be on attracting the best talent from the market — talent that knows how to build a talent ecosystem, competencies and so on.”

Srikanth Karra, CHRO, Mphasis

“The name ‘Lenovo’ does not bring to mind ‘services and solutions’. Therefore, for the more seasoned and experienced talent, it may not appear to be the grandest of opportunities,” she had said. Establishing a new function within an already established brand or company is a daunting task, for sure. Right from the talent- attraction strategy to the acquisition strategy, the HR has to ascertain exactly what business requirements the Company may have and how and where to source the best talent available for the positions they are looking to fill.

Employee value proposition

Srikanth Karra, CHRO, Mphasis, says that challenges that a more established company may see while setting up a new business are quite similar to that of a new company entering the same business.

The difference is in formulating an employer brand value, where a more established business may have an edge. Karra suggests that when trying to attract talent for the new business, the employee value proposition should be stated clearly and in an attractive manner.

“As an employer, one needs to make the employee value proposition very clear. In other words, one has to clearly demarcate what one is offering to current employees and people of one’s second business— the pay structure, the kind of career progression and so on that the people of the business in one’s organisaton are getting — in order to build a good brand image, which is clearly beneficial for the second business,” he said.

For the new business, talent can be attracted by elaborating on the type of clients one is going to service and the kind of work one is offering to the new people, Karra details further.
Expertise and competencies

Adil Malia

“Top line of thinking has to be provided by people who are from the industry one is aspiring to enter and set up shop in. For the new venture, one’s leadership will require experts, value chain talent which isn’t easy to get.” 

Adil Malia, former group president-HR, Essar Group

Adil Malia, former group president-HR, Essar Group, says there’s no clear-cut mandate on the model one needs to follow in order to be successful in a new venture. One thing that there is a mandate on is that one definitely needs to have sectoral competencies within one’s leadership team before venturing into a new space.

“Top line of thinking has to be provided by people who are from the industry one is aspiring to enter and set up shop in. For the new venture, one’s leadership will require experts, value chain talent which isn’t easy to get,” he points out.

He further adds that the definition of a new, separate work culture for the new business has to be brought in.

In order to attract the right talent for the new business, Malia asserts that the employer has to present a stronger case.

Strong pitch

“People will be willing to work, provided one shows them a future and gives them an idea of a value chain that they believe could work. One needs a strong pitch and a good proposition for talent about the success plan for the new initiative. Selling them the opportunity to be part of the story in the making makes it a more attractive and lucrative deal,” he says.

Further, he believes that there is a more stable market reference for an already- established company going to another business than a startup, as they have the necessary backing.

Talent acquisition

Srikkanth Karra believes that while venturing into a new line, the hiring team, along with human resource management, should take a different approach. External involvement in the process of building a solid team will be really essential in the initial stages.

“One will obviously need outside resources and vendors. It is essential to establish one’s HR from the industry that one will be working in. The focus should be on attracting the best talent from the market — talent that knows how to build a talent ecosystem, competencies and so on,” explains Karra.

“The company doesn’t need to try doing everything on its own. One can build a solid team with the assistance of talent from outside, develop a good talent ecosystem and then work backwards,” he suggests.

According to Malia, the hiring team needs to be right. Getting the right people on the interview panel is essential to search for the right candidate.

“Specialists are required to hire top hiring talent from the industry, so that the top talent can hire further. One can also outsource a set of professionals for this,” says Malia. He further suggests a blend of old talent and outsourced people, who can identify the initial team of people.

Can retention of existing employees be a challenge?

Emmanuel David

“The value add of people hired for new businesses may be greater than the value add of one’s pre-existing employees. In that case, there may be a rift, because of the compensation.”

Emmanuel David, former director, TMTC

Emmanuel David, former director, TMTC, points out that the business model would change for the company when it adds another business. This new process may also see a shift of value add from the employees, that is, the value of the employees of the new business may be disproportionate to those from the old. “The value add of people hired for new businesses may be greater than the value add of one’s pre-existing employees. In that case, there may be a rift, because of the compensation,” explains David.

HR needs to be wary of such an issue and predetermine ways to manage such a situation. “One has to ensure clarity within the organisation and amongst the employees, about the shift in the talent pool and the delivery model. One must also give one’s pre-existing employees a chance to switch over to the new business as well,” he adds.

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