Chapter-6

The War for Talent:

Dealing with Scarcity in the Midst of Plenty

Between them, China and India account for 40 percent of the world’s population and about the same proportion of its workforce. The size of the labor force is not just large but has been growing at a rapid rate. In 1990, the total number of working age people (that is, 15-64 years of age) was 768 million in China and 501 million in India. By 2005, China’s figure had grown to 929 million and India’s to 703 million. The number of college graduates has gone up even more dramatically. China produces over 5 million college graduates a year, more than four times as many as ten years ago. India produces about 3 million college graduates, three times as many as in the 1990s.

Yet, every survey and every interview with every executive in both China and India paints a picture of massive scarcity. Consider, for example, a recent report from three U.S. chambers of commerce in China. Finding, training, and retaining top managers was rated by 37 percent of the 324 companies in their survey as the number one operational challenge, ahead of other issues such as corruption or piracy. J. Norwell Coquillard, chairman of the American Chamber of Commerce in Shanghai, observed that: “Demand for skilled, qualified staff still outstrips supply, and this key operating constraint shows no sign of easing in the near term.” In India, Nasscom, the National Association of Software and Services Companies, has estimated that, by 2010, its industry would face a shortage of 500,000 professionals. At any of the top five business schools in India, the entire class of graduating MBAs is placed in less than four hours, a tiny fraction of that at the Harvard Business School. A growing number of CEOs, such as Sunil Bharti Mittal, chairman and managing director of Airtel, India’s largest mobile operator, acknowledge publicly that it is often “cheaper to import managers” from the U.S. or Europe than to hire locally.

In this chapter, we begin by looking at why there exists this scarcity in the midst of plenty in both China and India. We then put forward guidelines about what a company might do to increase its odds at winning the ongoing brutal war for talent.