People Issues in Telecom Industry &HR Preparedness: A Study of Indian Companies.
| Author | Buddhapriya, Sanghamitra |
| Position | Human resource |
Introduction
Today, India is the second-largest telecommunications market in the world with a subscriber base of 1.05 billion. It has registered a strong growth during the last decade and a half with India's teledensity increasing from 17.9 in 2007 to 92.59 in 2017. According to data provided by the Telecom Regulatory Authority of India (TRAI) for 2017, India has the 3rd highest number of internet users in the world. The country accounts for the fourth largest app economy in the world. International Data Corporation (IDC) predicts that in the coming years, India is likely to overtake US as the second-largest smartphone market globally and it will maintain a high growth rate over the next few years as more and more Indians are switching to smartphones and upgrading to 4G connections. Indians have become the biggest followers of Facebook, WhatsApp and Twitter and specifically on mobile, outside of the US. Indian enterprises and SMEs are adopting cloud-based services to increase the quality and reach of their offerings. E-tailers have become the first large business segment in India to exploit consumer analytics (PWC, 2015). As the Indian telecom sector is growing rapidly it will contribute to India's gross domestic product (GDP) substantially. Today the telecommunications industry is a key enabler of productivity and is a significant contributor to the expansion of economic activities within India. The liberal and reformist policies of the Government of India along with strong consumer demand have been instrumental for the rapid growth in the Indian telecom sector. A fair and proactive regulatory framework as well as easy market access to telecom equipment ensured availability of telecom services to the consumers at affordable prices. Another reason that has made the sector one of the fastest growing and a top five employment opportunity generators in the country is the deregulation of Foreign Direct Investment (FDI) norms. According to Nasit (2011) the Indian telecom sector has witnessed an exponential growth, after liberalization, which has helped the country for its economic development. It has also emerged as one of the major contributors to economic growth, as there exists a positive correlation between the penetration of mobile services and internet on the growth of GDP of a country (Baruah & Baruah, 2014). An estimation by World Bank reveals that in the developing countries, an increase in mobile and broadband penetration increases the per capita GDP by 0.81and 1.38 percent respectively (Joshi, 2014).
In recent times, India has witnessed significant transformation in the telecom industry. In the last decade the telecom sector has experienced a major transformation in terms of its market structure, technological content and growth (Shah, 2008) through joint efforts of the Government and private players (Tarab, 2012).This is an interesting sector in India to study, due to unprecedented technological breakthrough and high level of competition in the area, and the volatile nature of the industry. Currently, the telecom market is highly fragmented with only a few private players having stiff competition among themselves for market share, leading to a stiff price war among them to lure larger number of customers.
People in the Telecom Sector
The unprecedented growth of business in the sector has placed a special focus on human resources. It is often argued that proactive HR measures are critical for organizations to achieve their objectives. Research indicates that human resource plays a crucial role in service companies (Schneider & Bowen, 1993) and to gain competitive advantage, service organizations are laying greater emphasis on human resource management practices for enhanced corporate performance (Som,2008). In the VUCA (Volatile Uncertain Complex and Ambiguous) world, the telecom industry has been considerably affected because of unimaginable competition, sweeping revolutions in technology, growing consumer needs, and the evolving regulatory environment. In this backdrop, people issues become quite important in the telecom industry.
Ernst & Young's (2014) Global Telecommunications Centre has highlighted some of the risks associated with the telecommunication industry as: failure to recognize new roles in the evolving environment; dearth of performance measurement to drive execution; failure to comprehend customer values, and failure to embrace new routes to innovation. With the changing context, it is quite evident that Indian telecom industry is facing similar challenges in the HR domain, i.e., finding and creating a large number of sound technical workforce and imparting technical know-how to employees. The increasing job complexities have also a direct impact on the people-issues, and subsequently, impacting the existing HR practices.
Present Research
Telecom industry has been selected here because of the importance of this sector to the overall growth of Indian economy and also because of the changing business scenario this industry is facing at this moment. In this research, an attempt is made to identify important people-related issues of the telecom industry in India and how these HR issues are being addressed by the selected telecom organizations. The study also seeks to identify the gaps, if any, between the HR practices being followed and the evolving people-issues in the telecom organizations. The analysis would help to put forth recommendations to improve the HR practices. Keeping the above in view this work is undertaken with the following objectives:
* To identify and understand people-related challenges in the telecom industry.
* To study the HR preparedness and practices being followed by some of the leading telecom companies to address these issues and highlight the gaps, if any.
* To come up with recommendations to address the challenges effectively.
Methodology
Three leading organizations in the telecom sector in India have been taken up for this study. These are Bharati Airtel, Vodafone-India and BSNL, the leading players in this field having the majority market share. They represented both private (Airtel, Vodafone) and public sector (BSNL). The case study method has been used for the study, which is based on secondary sources, i.e., the literature produced by the select companies, journals, articles, newspapers, websites and books. Data-driven approach was followed to study the objective and the practices being followed by the organizations using a 'research question-driven' approach.
Shortage of Skilled Talent
Being the fastest growing sector in India, the telecom industry is expected to generate a large no of direct and indirect jobs over the next five years. According to the Job Outlook Survey2016-17employment opportunities are expected to be created because of a combination of government's efforts to increase penetration in rural areas and the rapid increase in Smartphone sales and rising internet usage. The IT and telecom sectors may, thus, hire the biggest numbers of employees in the coming years. But with this opportunity comes the challenge of skill-shortage to fulfill the demands of the industry (Business Standard,2017).Increased usage of Smartphone, roll-out of 4G technology, escalation in data storage capacity, introduction of digital wallets and constant increase in demand for technology are likely to lead to growing skill-gap in the telecom industry.
Indian telecom firms are struggling to scale resources to meet the new challenges like technology shifts, where automation and artificial intelligence take over routine jobs. A study carried out by Emeritus Institute of Management (2017) in India amongst the 350 c-suite level executives of IT/ITeS, manufacturing and Banking, Financial Services and Insurance (BFSI) sector, identified that nearly 85 percent of the IT services firms consider "mismatch between skills required and the skills that are available in the market" as the second most critical problem. This has been supported by another research carried out globally by the Ernst & Young in 2017. The report suggests that over half of all companies surveyed (53%), know that to achieve their stated objectives, they need to hire or acquire specific skilled talent. But there is a shortage in the market in this field. This bigger challenge of skilled employee shortage in the near future, leads to sub-challenges of hiring of right talent and their skill-development through effective training.
High-attrition & Low Engagement
Another important people-issue is the high attrition and low engagement. Speedy growth of the telecom industry has encouraged the government to allow more players in the field. The players' attempt to acquire larger market share has led to an intense price war leading to declining revenues per user and affected the balance sheets of most players. Post the entry of Reliance Jio and due to the impact of demonetization, the telecom industry at present is going through major HR hurdles. It is estimated that the attrition across levels will be high but it will not be easy to find jobs within the sector. This is because all telecom firms are facing cost-cutting pressures and only if there is a need that cannot be internally fulfilled, they will go for hiring from outside. The telecom players may not be able continually poach from other sectors like the FMCG which had previously lost its manpower to them.
Krishnan (2012) points out that in India the higher number of market players has led to increased migration of intellectual capital between organizations. Thus, managing employee turnover has become a major challenge and organizations are focusing more on the methods and techniques to increase employee engagement and reduce attrition. Krishnan and Sethuramasubbiah (2012) have tried to draw a relation between low-engagement of the employees in the telecom sector and the high-attrition it faces. They argue that the high competition in the industry...
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