"Flexible staffing will help SMEs to face staff turnover problem"
Biju Varkkey, Professor, Indian Institute of Management, was in Nepal late August to conduct a programme on improving the quality of decision making, organised by Laxmi Bank Ltd. After the programme, he talked to New Business Age about the emerging management issues and their relevance to Nepal. Excerpts:
What do you think are the most important changes evolving in the management thought in the global level?
We can now see new forms of organisations evolving where they are getting more flattened with less hierarchy and they are also getting multi-locational. Even virtual organisations are coming up. Outsourcing is changing the pace of a lot of organisations. This is causing a new set of challenge on coordination, ensuring confidentiality, and on ensuring that the level of services provided remains the same.
Today you find more stress on corporate governance. So organisations’ accountability levels are increasing. Then there is the issue of social responsibility. Organisations are now under tremendous pressure to become good citizens. Both of these depend on how well organised you are. This is another challenge that has come up. Then the importance of people is going to increase. So, attracting and recruiting the right candidates, training them and even managing them are all becoming very important issues. Leadership development is another challenge. So these would be some of today’s management challenges.
Sometimes it is said that the Japanese management theories have lost relevance and American theories have gained popularity lately. What is your opinion?
Styles do come and go. The main point is that the organisations have to be managed more effectively. So, the Japanese type of management still offers benefits in this sense and so does the American style of management. It may be that because some large American corporations adopted the American style, it has become more popular than the Japanese management.
The main issue, however, is that we learn from different countries and use some of these practices. The Quality Circle is a very good tool for shop floor participation. Using it to benefit is a challenge for Nepali companies. How do you now customise it and use it effectively? You might have to learn from a lot of companies. You will also have to invest in experimentation. For example, if outsourcing is coming up, the management practices for such a business are going to be different. The traditional command and control practices do not work for this. When you are dealing with a more educated worker, called the ‘knowledge worker’, you need a different set of practices which could be a combination of the East and the West.
These days some scholars, particularly in India, are found to be delving into religious scriptures to develop new management mantras. How fruitful has this exercise been?
This is an emerging field. Spirituality and religion have to be distinguished. By delving into spirituality does not mean that you are being religious. Rather, you are looking at another side of the person. Every human being has a spiritual side and you are looking at that trying to make the person more comfortable, in touch with oneself. But there is no point in giving a religious connotation to it. Yoga or meditation is stress-relieving mechanism and if it improves organisational effectiveness, then why not?
What type of problems have you observed in Nepali management?
With the limited interaction I have had with Nepali managers I have observed that Nepali companies are laying more emphasis on training people to develop their skills. I am also told that Nepal is facing a brain drain. I don’t have the data to comment on it more authoritatively. But, around the world, retention is now a big problem because the new generation workforce is different. Mobility is one of the characteristic of the 21 st century workforce. Earlier, people used to keep in touch with their family and friends only by means of writing letters and the delivery would take a few weeks. Nowadays, through video chatting or emails, communicating has become very quick and convenient. Organisations need to know what to do to hold the person. That has become a challenge.
Like any other developing country, I am sure organisations here will also think of adopting practices suitable for such new challenges. India has already gone through that.
So, how do you summarize the types of problems that developing countries like Nepal are facing?
The first challenge for developing countries is equipping people to operate in a global mind environment. The world is opening up. So, people require different types of skills. Organisations will have to invest more in capacity building.
The frequent employee turnover has especially victimised the small and medium enterprises (SMEs) of Nepal. What is your suggestion to address this problem?
SMEs have limitations in providing salary and perks. There are other options available such as what is called the “flexible staffing”. There are temporary staffing agencies, which are also called buffer staffing agencies. It is predicted that soon temporary staffing agencies would be employing more people than any company. They are different from job placement companies. Employees from these agencies are deputed to companies. Such an agency will be responsible for maintaining the employment relations, training them, developing competencies, getting performance evaluated and providing them with a career. This can address the problem of the SMEs to some extent.
