Whether opportunities galore for HR?


Dr. A. Jagan Mohan Reddy
Associate Professor (HR) & Placement Coordinator
Institute of Public Enterpise
Osmania University Campus, Hyderabad-500 007


Human Resource is the productive power in human beings and unlike the material resources, human resources are the participants as also the beneficiaries of economic development process. On the demand side goods and services produced are used by the human beings to improve health, enhance general educational levels, alleviate poverty and on the supply side, human resources and capital form essential ingredients of production system which transforms natural and physical resource into goods and services.

Human resource in an organization can be compared to a football team having a productive capacity and an earning power more than the cost. Of course, human resources value can depreciate through illness, incapacity and obsolescence. But a well skilled and trained human resource will be more productive and can earn more.

Complimentarily between human resources and capital is so close that optional increases  in output is not possible through increases in one of them – either human resources or capital – at the cost of other Theodare W Schultz (1962) observers:

"Some growth ofcourse can be had from the increase in more conventional capital even though the labour that is available is lacking both in skill and knowledge. But the rate of growth will be seriously limited. It is simply not possible to have the fruits of modern agriculture and the abundance of modern industry with out making large investments in human beings. So no organization can neglect the factor of human resources while formulating its business strategy".

In the light of this definition it can be safely concluded that  human capital would be the prime driver in making India a developed nation. Further, unlike natural resources human recourse doesn't deplete with use, and hence there is an urgent need for tuning the human capital for the country's economic development.

Concept of HRD:

According to Dr. T V Rao, HRD in the organizational context is a process by which the employees of an organization are helped in a continuous, planned way to

  • Acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles.
  • Develop their general capabilities as individuals and discover and exploit these own inner potentials for their own and or organizational development purposes.
  • Develop an organizational culture in which supervisor – subordinate relationships, teamwork, and collaboration among sub-units are strong and contribute to the professional well being motivation and pride of employees.

From this definition we may understand that HRD is a mechanism for creating a conducive climate for individual and organizational development. In other words, the basic concept of HRD aims to acquire capability to meet present and to develop organizational climate to bring about team spirit and group dynamism.

Dr. Leonard Nadler of USA defined HRD as "a series of organized activities conducted within a specified time and designed to produce behavioural changes". He used HRD to refer to three activities namely Training, education and development. Nadler's concept is very pragmatic as it looks at people from the organization's point of view. Because, HRD does not mean the development of individuals only. It is also for effectiveness of the organization through development of human beings.

HRD in Retrospect:

When we look at HRD in India in retrospect we find that there have been three stages. The first was the ancient when India was the leader. The second was the 'medieval stage' which, though it recognized the concept of a welfare state ideologically, did not replicate it in reality. Further, it gave birth to  feudalism, perpetrated traditionalism and did not react favourably to a faster development of material and human resource.

The third stage is modern in which India entered with numerous problems due to foreign subjugation and other factors. Until India became free, the human factors were neither recognized as a 'resource' nor as a 'power' for a long time. Though the country had millions of biological beings, we were not in a position to state the quality of human resources in terms of their potential, capability of power.

Industrial revolution gave a new dimension to the concept as the skilled artisans were being developed through "learning while doing" or "on the job training" methodology. In the West the concept was evolved by Robert Owen who emphasized human needs of workers in 1803. But it was F W Taylor who brought about revolution in management thinking by stressing inclusion of human values in management. Subsequently, Elton Mayos' studies at Hawthorne plant of Western Electric, likert demonstrated that better utilization of human resources is possible by treating them as human ie., HRD with emphasis on human values.

Now let's have a prospective outlook of HRD

As we all know economic growth is a complex process and needs much more than physical capital formation. Capital issues of new companies are over subscribed if they are floated by competent persons because investors attach more importance to human ability rather than other factors. Indian Business which have been enjoying the blessing of the protection now has to grow on its own and nothing but survival of the fittest will work.

All over the world changes have been taking place in the social, economic and technological spheres and India is no exception. Indian business has to make sure of the enterprise's capacity to survive against changes that are taking place world over. Further, the change has to be managed successfully. If obsolete machinery is dangerous obsolete people are disastrous". So, there is an urgent need to develop the human resources lest the economic development/growth may get retarded. The following diagram shows the current environment and possible outcome depending upon the response:


According to the Human Development Report, 2005 India ranks 127 among 177 countries in the world. While Norway is at the top, Australia is 3, Canada 5, China 35, and Pakistan is at 135. The three indicators, based upon which the said rankings were made are level of education, life expectancy and per capita income.

HR – India: Opportunities galore

It is estimated that, by 2010 the number of workers between 55-64 will expand by 52% in the US while the European will see its young workers (20-29 years) decrease by 20% over the next two decades. In contrast, India emerges young and vibrant not only with 54% of its population below 25 years of age but also with a good talent pool 1. But does this mean the young Indian professionals can fill the void left by retiring workers in developed countries.

If 54% of India's youth is below 25 years of age, it is also a fact that a large part of this population comprises of rural and semi urban youth who are not exposed to quality education and most are school dropouts. So there will be a mismatch in terms of skills. There is another dimension to this problem. In addition to needing more engineers, doctors and MBAs India needs the ability and institutional mechanism to produce leaders in various dimensions.

Threats that stare at us……

In recent decades both government and industry have displayed a lackadaisical attitude towards higher education. Although the intellectual quotient at several of Indian universities ranks with the world's best, the basic facilities at many Indian universities lag far behind other Asian or Latin American universities. Whether in terms of internal facilities or quality of construction and maintenance of campus buildings, the average Indian universities, especially in states such as HP and Bihar would be put to shame by its counter parts not only in energy – rich developing countries like Iran or Malaysia but also in Thailand and China.

However, it is not to say that nothing has been done so far to rectify/improve the situation or every thing is going bad in education sector. The IIT's are the greatest achievements of modern India in education. Since inception IIT's have been a constant source of high quality talent not just for India but also for the world. Further, these IIT's are closely followed by the IIM's which have brought Indians to the forefront of Business Management. At the government level too some initiatives have been taken. For instance, to empower students of rural areas and bridge the rural-urban divide the Department of Information Technology and Communication has established Jawahar Knowledge Centers  ( primarily  for engineering students) at the International Institute of Information Technology (IIT), Hyderabad. So far 45 JKC's have been set up in reputed engineering colleges in AP2. At these JKC's students undergo rigorous training for six months during which they will learn experimentation with new strategies, methodologies, tools, technologies and communication skills. Further, they also handle live projects following industry standards and as such quite useful for engineering students from the rural areas for improving their competencies. Yet we have much distance to cover.

What needs to be done?

Our universities need to support the pace of economic reform with matching educational reform and development in R & D. One of the most disconcerting aspects of Indian research is that it has not grown in proportion to the growth of Indian population and GDP. For instance, in the decade between 1980 and 1990 (the pre-liberalization decade) Indian researchers in the field of physics were publishing papers in international journals at a rate that was almost three times that of China. Since then, between 1991 and 2004, Chinese researchers have increased their contribution almost 6 times, whereas the Indian contribution has not grown in proportion3. This in part can be explained by greater opportunities to publish at home or to present at national seminars. However, it must also be noted that whereas the Chinese government has taken a highly proactive role in setting up cutting-edge research institutions and encouraging advanced research, Indian governments have been starving India's universities and research labs for funds.

To fully leverage the possibilities that are now opening up and to overcome competition from other challengers, we need an education system that produces far greater number of graduates and professionals of far better quality. Further, we must eliminate illiteracy, ensure elementary education for all children and substantially increase the enrolment rates in secondary, higher secondary and tertiary levels so as to fulfill our potential both as individuals and as a country. In a nutshell this requires a major overhaul of our educational setup, a relook at policy and a change in mindset. And this is no idealistic dream as we can see from successes within our own country: examples like Kerala for primary education and literacy or the technology aided accelerated adult-literacy program of the Tata group in Andhra Pradesh.

Need for Strategic Manpower plans:

As we have seen over the next three decades India will have the largest pool of working age people in the world. With the large pool of people in our country and shortages in other countries there is a unique and huge opportunity for companies in India and for the Indian economy overall. The benefits to the economy are estimated at an additional inflow of $200 billion of incomes and the creation of 40 million new jobs by 20204 . But we must seize this opportunity and to do that we need to train the people accordingly. What is required is a strategic rather tactical approach to manpower planning, as people will  not be provided ready made either to the head hunters or corporate recruiters.

In the 60's when Singapore's Economic Development Board (SEDB) was preparing to make Singapore a "developed" country it knew that key was the development of skills. Further, the Singapore Government was aware that its aim to have a higher GNP per capita than other countries implied that incomes and wages in Singapore would become higher than in other countries. Therefore, unless the skill levels in Singapore were also higher than in other countries, the foreign companies would take their business else-where as wages in Singapore rose. Accordingly the board invited Tatas to help them in this regard and they did it.

So the challenge is not a Herculean one and we can do it provided we chose to. Let's consider another example. When Tatas were invited by SEDB at the same time Telco was building its new factory in Pune. As we all know usually know automobile factories start with an assembly line first, obtaining components from elsewhere. But at that time the required inputs were not available in India and were forbidden for import at that time. Telco took up this challenge.

A comprehensive manpower plan was made, with innovative schemes to convert raw, young people-post-graduates in Engineering for design, graduates for planning and ITI graduates for workness – into the capabilities required for the work to be done. Thus machines and tools were designed and built in Pune. With them components were produced for new truck models.

So in the Indian context what we required to do is as under

  • Reframe the people related challenge as strategic manpower planning and not tactical HR or personnel management.
  • Partnerships between companies and government agencies
  • Innovation in the approach

In addition our universities should play a crucial role in this strategy. The following steps, if taken in right earnest, would go a long way in successfully overcoming the challenges i.e, if human resources are to really contribute to India's economic development:

  • Professional management and autonomy to the universities
  • Creating right environment for attracting leading faculty
  • Our universities should choose applicants who, beside being intellectually outstanding also show the greatest potential to transform into leaders.
  • Our universities should leverage industry as a source of research initiative and funding etc


Education and training is the most dominant dimension affecting quality of human resources in terms of knowledge and skill. They provide the means for taking advantage of technological changes as well as furthering technological progress. So the challenge before the think tanks, academics, corporate and institutions of research and advanced education today is to rediscover the fineness of the balance between the flourishment of human being as a source of potential and the utilitarian employment of human being as a source of yet another resource.

For India to graduate from being a nation of software coolies to an advanced industrial and technological nation like Germany, Japan or Korea much work needs to be done . Not only we need to improve our educational standards across the board but also need to upgrade the capabilities of high schools and hundreds of colleges scattered across India's smaller towns. Further, there needs to be a significant change of mindset so that there is a healthy interaction between the research community and those who are responsible for implementing public policy.

We need substantial private involvement and adequate legislative cooperation to make this nation building dream happen. There is much optimism and buzz about India's potential and future. Further, many have spoken about education for liberation. A radical new thinking and a dramatic new thrust to education are essential if, we are to fully exploit. The opportunities opened up by the emerging global knowledge economy.


1. Chowdhury, Jhinuk "Rise of the YIP" Times Ascent, 19th Oct, 2005.
2. Gupta, Vivek "What is World Class" The Economic Times, 26th Dec, 2005.
3. Human Development Report , 2005.
4. Karnik, Kiran "Liberating Education" , The Economic Times , 10th November , 2005.
5. Maira, Arun " Starving amidst Plenty", The Economic Times , 14th April, 2005.
6. Rao TV etc (1997), Alternative Approaches and Strategies of Human Resources Development, Rawat Publications, New Delhi
7. Sapru, R K (1994), Development Administration, Sterling Publishers Pvt Ltd, New Delhi.
8. Schultz, T.W (1962) "Reflections on Investment in Man", The Journal of Political Economy, Vol LXX, No.5, part-2 October.
9. South Asian voice, Sept & Oct 2004 Edition.

1. The Times of India dated 19th Oct, 2005
2. The New Indian Express dated 10th Jan, 2006
3. South Asian Voice, Oct, 2004 edition
4 The Economic Times dated 14th April, 2005

Dr. A. Jagan Mohan Reddy
Associate Professor (HR) & Placement Coordinator
Institute of Public Enterpise
Osmania University Campus, Hyderabad-500 007

Source: E-mail May 18, 2006


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