‘Large firms should set up own corporate universities’

At a time when talent and employability are raging issues, companies have a lot to learn from multinational corporations (MNCs) on developing talent. Rajeev Peshawaria, CEO, ICLIF Leadership & Governance Centre in Malaysia and former chief learning officer at Morgan Stanley tells DNA that large firms should think of setting up their own universities. Excerpts from the interview:

How common is it with Indian companies to engage in employee talent development?
I don’t have first-hand data, but I believe Indian companies are finally realising the importance of investing in talent development. Companies are learning that it takes more than money to retain top talent. Investing in development today has become a basic expectation of employees. It is not a ‘nice to have’ aspect any more. It is a must for any player that is serious about competing in its chosen industry segment.

India Inc keeps crying about a dearth of talent and employability. What needs to be done to bridge this gap?
Employability is a big problem in India, as universities here do not prepare students well enough for the business world. Companies should start with the customer experience they want to provide their customers, and design boot camps for new employees where employees can learn the company way.

What can Indian firms learn from MNCs when it comes to talent building?
MNCs learned a long time ago that the quality of their talent and their culture are the only two remaining competitive advantages. Everything else can be copied by competitors. MNCs invest heavily in talent development. Indian companies need to see this investment in the same way they invest financial capital on business projects.

The other lesson is that development happens on a 70-20-10 basis i.e. 70% on the job through real experience, 20% through coaching and mentoring, and only 10% through formal training. A balanced development programme is necessary if companies want to get a decent return on their development investment.

Which MNCs can Indian companies learn from?
GE, Goldman Sachs, Procter & Gamble, Coca-cola have set up their own corporate universities. They also provide opportunities, where employees learn while working on projects of strategic importance to the company. For example, if a senior leader wants to explore a new business idea, he or she can form a team of people from around the company and ask them to work on it over and above their day job. In return, team members get coaching from the senior leader and an opportunity to work on something their day job would not otherwise allow.

Do Indian companies need to start their own universities?
It depends on the size of the company. If a company employs more than 20,000 people, it makes sense to start their own university. Smaller companies are better off taking a semi-outsourced approach. Even if companies start their own corporate university, they must be careful not to over invest in the infrastructure. They must question if they need a bricks-and-mortar university or a virtual one.

Indian BPOs are visiting colleges and imparting training. Should more firms go out and engage in training youth at college level?
Providing training to college students is a good thing, but I am unsure about the extent to which it can solve the employability issue. A better approach might be hiring graduates from campus and putting them through rigorous training for 2-3 months before deploying them on a job. Even after deployment, they should be treated as apprentices for the first year. Companies should not worry about training people only to lose them. Some of that will happen in a high growth market. But the reverse is not an option —just because you are worried about losing people after training them does not mean you don’t train them at all.