Retention is biggest challenge: Accenture

In what management consulting major Accenture calls a "troubling statistic", only 34 per cent of Indian executives polled by the firm believe their employee turnover rate is somewhat or much lower than their respective industry's average.

The study also beats the myth that "new economy" companies are early adopters of best global practices when it comes to managing and nurturing a high performing workforce.

The study titled "The High Performance Workforce Study-2007" reaffirms that one of the biggest challenges organisation's in India face currently is to retain employees.

"The paradox is that even as India has a favourable demographics with a young working population and a booming economy, there is a crunch in talent across industries," said Peter Cheese, global lead, Human Performance Service Line, Accenture.

The study covering CEOs and HR heads across 13 industries in India reports that Indian CEOs gave the highest percentage of votes to HR as a top-three function "" even higher than from what HR heads rated themselves.

According to the Indian HR heads, the sales function received the most percentage of votes.

On this point, CEOs of Indian companies opine differently from executives in the US, UK, Spain, France, Germany and Australia who participated in the Accenture's global study conducted in 2006.

Globally, the HR function was the seventh-most important work, far behind the list of sales and customer service which topped the list in the global study.

The study notes that only 10 per cent of Indian companies surveyed share the characteristics of global human performance leaders while 50 per cent of the respondents share the traits of the global laggards.

Claiming that the study would not like to make any broad generalisation, it points out that the practices and experiences adopted by Indian "leaders" are largely consistent with their counterparts in the global study. "The leaders in the India sample broadly represented a number of old-economy industries such as steel, power generation, and manufacturing," says the report.

However, barring this small group of leaders, the HR function has not yet become a strategic partner for business, say Accenture consultants.

Deepak Malkani, partner, Human Performance, India, Accenture, said, "Human resources is largely seen as playing a transactional role rather than a strategic or transformational role. In most countries functions like payroll or medical insurance are outsourced. But in Indian context most HR departments manage these functions."

That's one reason why even as Indian CEOs rate HR as a critical strategic tool, most of them feel the function has not performed up to its full potential. Cheese points out that in many countries, business function heads are moving into HR roles.

"Business leaders bring the knowledge of business into HR. Then the function can sit and talk the language of business rather than work in a silo," he says.