Indian firms need to double spend on training

Indian companies will have to double their spends on workforce training as they move from cost-based to value-based offerings.

Consulting companies like Deloitte and PwC say that currently, Indian IT and ITeS companies spend anywhere between 3-3.5 per cent of their payroll costs in training talent, which has to be increased to 5-6 per cent.

Ms Padmaja Alaganandan, Executive Director, Consulting, PwC Consulting, says that the learning and development costs in India is around 3.5 per cent of the payroll. According to the American Society for Training and Development, companies there spend around 3-4 per cent, she points out.

“Corporate India needs to focus more on this than companies in mature markets and should allocate at least 5-6 per cent of payroll costs on training,” she said at a recent AIMA (All India Management Association) conference here.

The big transition to knowledge-based professional services cannot happen without adequate effort in training talent, agrees Mr P Thiruvengadam, Leader, Human Capital Advisory Services, Deloitte India. Project managers, delivery managers and account managers comprise key resource pool that needs to understand the transition.

“Spending on training people is like spending on R&D. Companies will realise the benefit of increased spends in 2-3 years time,” he says, adding that making the work better is as important as making the workplace better.

Although conventional training is going on, companies now have to map and build people to add value as this is how India is going to stay ahead.

In many companies, business strategy is being worked out quite independent of talent strategy and three years later they realise that there's a mismatch.

> anjali@thehindu.co.in

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