How Indian companies could win an escalating war for digital skills

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Even before Covid, many Indian businesses were forging ahead with digital transformations. The pandemic has accelerated these efforts. By the end of the decade, India could be well on its way to becoming a trillion-dollar digital economy.

But there is a big problem: the demand for digital talent in India is far greater than its supply. In 2020, there were 390,000 vacancies in digital and only 225,000 people ready to fill them. By 2024, the figure could approach 900,000 people.

This gap is bad for individual companies, and it’s bad for India. Many large global companies are investing in technology, attracted by India’s high-quality and relatively inexpensive talent. In 2021 alone, venture capitalists invested nearly $36 billion in Indian startups, up from $10.7 billion in 2017. This growth won’t continue if the talent isn’t there.

Companies cannot wait or assume that the digital talent gap will be filled. They must act. Here are six ways businesses can prepare.

Start off on the right foot: It starts even before recruiting, by designing a technology-driven employee value proposition that offers clear career paths for digital colleagues such as DevOps and Site Reliability Engineers. This means viewing talent as part of the brand, so that hires can imagine themselves working there. Next comes identifying the right kind of people for the organization and building a targeted approach to finding them. Develop tools to create an efficient, user-friendly recruiting process that manages the candidate experience from first interaction to first day on the job. First impressions count: if the pitch isn’t clear, it will be rejected.

Set up a “war room” of talents: The search for talent is intense. It is therefore important to put in place a dedicated system, with the support of senior management, to attract, recruit and onboard digital talent. The War Room defines functional skill sets and tracks progress against goals, while defining new processes. He also builds digital talent capabilities through collaborations with relevant stakeholders, including compensation, legal and finance.

Develop comprehensive, mandatory and targeted training programs: Retraining existing staff can be profitable (half as much as a new hire) and builds loyalty. (New hires are two to three times more likely to leave than longer-term employees.) The broader idea is to create a culture of learning, where people share their knowledge and best practices with their peers. , and a culture of mentorship for experienced staff. to help others grow.

Create a culture of support and empowerment: For tech talent to flourish, give people the autonomy to work on discrete products, think more about work and less about “management.” Keep talent focused on creating business innovation rather than seeking approval, and get their feedback on a regular basis. Manage performance using well-understood metrics, while providing opportunities for growth. The principle is to invest in tools so that digital talents feel empowered and ready to do interesting work related to their skills.

Focus on motivation: In the world of tech talents, skill level is the centerpiece of the realm. Companies must therefore offer relevant professional development opportunities. This is a major problem for tech talent, according to McKinsey research. Companies that are successful in retaining talent develop different experiences that can help people grow and provide the freedom to experiment.

Invest in prevention: It is possible to create a “predictive attrition model” to identify those at high risk of leaving. This model uses data drawn from across the entire employee lifecycle to identify patterns that allow companies to develop both individual scores and company-wide “hot spots.” Based on this, they can deploy specific interventions to persuade people to stay.

We believe that talent will become the single most important factor in enabling the creation of technology-driven businesses. Obviously, there is a need for more and better education in general. But many issues are under the control of companies. It’s up to them to take responsibility for a well-thought-out talent strategy. Those who fail to do so will be at a competitive disadvantage, with dire consequences for them and for India.

Milan Mitra and Sathya Prathipati are, respectively, an expert partner in the Bangalore office of McKinsey & Company and a senior partner in Mumbai.

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