Trends and challenges of developing human capital in India

Abstract

With the population touching 1.2 billion, half of which is around 25 years of age, India is set to be among one of the top countries for human capital in the next two decades. While the country has been making rapid progress economically, human capital additions may remain marginal and may not keep up with the pace of economic growth unless accompanied by planned development of manpower. The Indian corporate sector was the first to start a dedicated HR function 30 years ago and the nation was the first to have a Ministry of HRD 20 years ago. Despite the early start, the last two to three decades have provided a mixed bag of experiences and expectations. Conservative HRD policies have not helped India's skill base to develop at the same rate as economic progress. An inadequate research base and the low quality of people entering the HR profession have prevented corporate HRD from becoming more productive than it is now. A lot of attention is directed towards recruitment, retention and compensation strategies rather than to talent multiplication. At the same time, innovative leaders and chief executive officers (CEOs) who have taken up the mantle of HR have made a mark. The future of human capital formation will be bright at the national level if the government makes more intense efforts to build human capital and becomes more innovative and expansive. At the corporate level, the credibility of HR is still suspect as it has not been able to match its steps with those of India's more innovative leaders. Preparation of a new breed of HR professionals combined with education of CEOs in what good HR can do may go a long way in helping Indian HR develop a strong footing.

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