harnessing the global n-gen talent pool

© 2007 New Paradigm Learning Corporation

July, 2007

Harnessing the Global N-Gen Talent Pool by Deepak Ramachandran and Paul Artiuch

The Story in Brief Western companies face an imminent and severe talent shortage. Baby Boomers are reaching retirement age and universities aren’t turning out a sufficient number of graduates, particularly in science and engineering, to replace them. Companies need to expand their recruiting efforts to include qualified young workers in the world’s rising economies. The challenge is especially steep for knowledge workers.

The good news is: the world’s rising economies represent an unprecedented source of young labor. N-Geners across the world share many attributes which make them the world’s largest, best-qualified labor pool ever. However, a closer look at the details of and distinctions between these labor markets is required: local variations can surprise and stymie the inexperienced global manager.

This paper examines the eight global N-Gen norms in the four main rising-economy regions (India, China, Latin America, and Eastern Europe), and identifies how their unique local economic, demographic and cultural contexts are expressed in changed employee expectations. Building on New Paradigm’s Talent Relationship Management (TRM) concept, the paper profiles successful N-Gen TRM techniques in each rising economy. Moving beyond mere “best practices,” we also propose some cutting-edge principles that promise to keep the best employers ahead of the game, attracting tomorrow’s talent to secure a stronger future today.

Table of Contents 1 Summary of Findings 2 Wanted: A New Global Workforce 4 Enter the Global N-Gen

Global N-Gen norms Expression of norms differs around the world

7 India India’s N-Gen norms Successful N-Ployment strategies

14 China China’s N-Gen norms Successful N-Ployment strategies

20 Russia and Central Europe Russia and Central Europe’s N-Gen norms Successful N-Ployment strategies

24 Latin America

Latin America’s N-Gen Norms Success N-Ployment strategies

28 Beyond Best Practice: Global Talent Relationship Management

Initiate Engage and evolve

32 Appendix 1: Country Demographics 37 Appendix 2: Select Results from New

Paradigm’s Global Survey

Harnessing the Global N-Gen Talent Pool


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Summary of Findings FOR THIS PAPER, WE CONDUCTED both quantitative primary research, as well as selected interviews with N-Geners and employers in each rising economy. This research is summarized in a separate section for each major region (India, China, Russia and Central Europe, and Latin America), including an explanation of regional norms and best practices in employment.

One important finding is that N-Gen norms, while important across the globe, find distinctive expression based on regional circumstances. For instance:

• Freedom: In North America, freedom in employment usually means N-Geners want to set their own hours, and work from home when they can. By contrast, in rising economies, it usually means that N-Geners feel free to change employers quickly and easily. This, of course, poses a challenge to employers, especially since N-Geners in India and China can often almost double their salary just after completing initial training at a multinational organization.

• Innovation: Whereas North American N-Geners see innovation as the province of small start-ups, rising-economy N-Geners (except in Russia) see innovation as done better by multinationals. Hence, this can be one of multinationals’ strongest attractors for N-Gen talent.

Based on these and other regional differences, we highlight certain recommendations that apply to multinationals, no matter where they choose to find their N-Gen staff:

• Find out why pay matters. In every economy, pay is either the most or second-most important aspect of a job for N-Geners. Still, why pay matters can teach employers a lot. For instance, in India and China, N-Geners often support extended family; in these situations, employers can gain loyalty by offering benefits to family members—or locating workplaces near N-Geners’ often rural parents.

• Focus on second- and third-tier cities and schools, and train intensively. By reaching beyond the usual first-tier targets, employers not only gain access to a much larger talent pool, they also often recruit a more loyal employee base as well. Some strategies towards this end include::

» Focus recruiting more on second-tier cities than second-tier schools. In many countries, the second-tier cities hide a treasure trove of talent, kept there simply by family ties and a reluctance to move far from home. By contrast, the second-tier schools in big cities likely contain many students who were rejected from their first tier counterparts.

» Locate offices in second-tier cities. Many employees, male and female alike, seek to move close to home when having children, for family support. Across most countries, this often means moving back to second-tier cities or the countryside. Employers who move with these N-Geners stand an opportunity to keep their staff, often at very competitive wages. Even the most attractive employers such as India’s Infosys are coming to this conclusion.

» Pay attention to management training, especially around performance evaluation and career paths. Most fast-growing companies in the rising economies have well-developed, often intensive initial training programs, lasting up to 9 months, full-time. But almost all seem to have underdeveloped management training programs. This leaves new employees confused and dissatisfied with the performance evaluation and career path feedback they get from managers only 3-5 years their senior.

• Engage N-Geners throughout the talent relationship cycle. In another New Paradigm research paper, “Attracting and Engaging the N-Gen Employee,”1 we highlight a number of ways to involve



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N-Geners more actively throughout the talent relationship management lifecycle. In this paper, we point out corollaries and extensions to that thinking that pertain especially to rising economies. Our suggestions include:

» Gear recruiting communications more through mobile phones and SMS than through the traditional Internet, since that’s where rising-economy N-Geners traditionally access the Web.

» Create a fast recruiting cycle, because N-Geners in rising economies often accept more than one job. Focus on getting them on-site and engaged in work as quickly as possible—even as early as the day after an offer is extended. (See the sidebar on the Shenzhen General Talents Market.)

» Automate key parts of the recruiting process, because rising-economy employers often need to hire daunting numbers of staff each year just to keep pace with attrition, let alone growth. One area ripe for automation is existing-employee referrals and references: ask job applicants to name one or two current employees of your company as references (as part of their online job application) and automate the process by which those employees are asked for their opinions about the applicant.

» Pave the way for women, especially. In all rising economies, and particularly in India and China, women are a highly-valued but underserved talent pool. Few employers in rising economies take the time or effort to truly cater their employment proposition towards the needs of women (especially young mothers), but the benefits that await leaders in this area are substantial.

Wanted: A New Global Workforce Western companies are bracing themselves for a much more competitive job market. A large number of their employees are middle-aged Baby Boomers—individuals born between 1949 and 1967. The oldest Boomers are starting to retire. RHR International, an executive development consulting firm, estimates that America’s 500 biggest companies will see half their senior managers retire in the next 5 years or so.2 Companies will have a hard time replacing them, never mind hiring the new recruits necessary for corporate growth.

Figure 1: The Talent Shortage

62%

63%

82%

83%

60% 65% 70% 75% 80% 85%

Talent Shortages in Organizations (%)

Across the organisation

Business leaders

Specialised skills

Growth markets

Source: Corporate Executive Board, Corporate Leadership Council



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Companies already feel the crunch in recruiting new talent (Figure 1). Many senior managers are kept awake at night by the large number of people they need to hire each year just to maintain their current complement or meet modest growth objectives.3

To complicate matters, jobs in the developed world are shifting to knowledge-based work. The Economist calculates that knowledge work makes up 40 percent of American jobs and accounts for 70 percent of job growth since 1998.4 Baruch Lev, a professor of accounting at New York University, argues that “intangible assets”—ranging from a skilled workforce to patents to know-how—account for more than half of the market capitalization of public companies.5 Accenture calculates that intangible assets have shot up from comprising 20 percent of the value of companies in the S&P 500 in 1980 to around 70 percent today.6

But while the demand for knowledge workers grows, the domestic supply is shrinking. Enrolment in science and technology faculties is declining in the U.S. and other western countries.7 The upshot is that companies increasingly conclude that it makes more sense to locate new research facilities in countries where there is a larger supply of science and technology graduates. As Figure 2 shows, this usually means opening offices in China or India.

A survey of 200 multinationals indicated that companies considering locating new research facilities in:

Figure 2: Planned Location of New R&D Facilities

22

35

1 0 05

15

813

68

43

18

0

10

20

30

40

50

60

70

United States WesternEurope

FormerSoviet bloc

China India Other

Increase

Decrease

Num

ber

of R

espo

nden

ts (

n=20

9)

Source: www.kauffman.org8

Any job that is not confined to a particular location has the potential to be performed anywhere in the world (i.e., globally resourced). If the job activities do not require physical proximity, local knowledge, or complex interactions with colleagues, then location is immaterial. Such jobs may be performed wherever a company deems most attractive. A company may choose to have a particular “location insensitive” job performed in the demand market (that is, in the market in which the resulting output is sold), in a border zone (nearshore), or remotely (offshore).

Not all location-insensitive jobs will move offshore, but many will—it’s estimated that by 2008, 11 percent or 1.46 billion of worldwide service jobs could be performed remotely. Engineering jobs are best



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suited to relocation. Sectors least likely to be offshored are retail and healthcare, while packaged software and IT services are highly susceptible to offshoring.9

As Figure 2 shows, China and India rank first and second with multinationals considering locations for new research facilities. A close examination of the numbers explainswhy. There are around 390 million potential workers in low-wage countries vs. 180 million in high-wage countries.10 For example, India generates 2.5 million university graduates annually, of which 400,000 are engineers and 200,000 are IT professionals. Most of these graduates speak English. They cost 12 percent of what an American graduate would cost to hire, and work an average of 450 more hours per year.11

But at the moment less than 20 percent of these graduates are truly credible candidates. Anita Tang, a young HR consultant in Hong Kong, points out: “While these emerging markets are pumping out tens of thousands of graduates, only a small percentage of them are suitable for working at multinational corporations which have a higher standard. You’ll see that the schools in China and India are very focussed on the theories and textbook learning.”12

Competition for these qualified candidates is fierce. Most rising economies do not share Americans’ passion for mobility. Only a small proportion of N-Geners grow up in the major cities that multinationals favor. The others are often prepared to move to those cities only for a limited period in their lifecycle (e.g., after school and before they want to have children). After that point, men and women alike often prefer to move back closer to home. In addition, the talent demands of the rising domestic economies are voracious. Multinationals are still “the employers of choice” in most rising economies, but that advantage is already diminishing as the best individuals and companies become more confident of their world-class (and world-changing) status.

Enter the Global N-Gen The global N-Gen is the largest generation in history. In North America, the N-Gen is often called the Baby Boom “echo” because it is just as loud as the original “boom”. Both generations number approximately 93 million. In Japan, the N-Gen is smaller than the Boom—27 million compared to 34 million respectively. But in many of the rising economies, the N-Gen far outnumbers the post-war generation (see Appendix 1: Country Demographics). Eastern Europe is demographically similar to Western Europe, where the size of these two generations is comparable. But China’s N-Gen outnumbers its Boomer-age population by 80 million (32 percent of population vs. 26 percent). In India and Latin America, the relative sizes are most different. There are almost twice as many Indian N-Geners as there are Boomers—419 million compared to 211 million respectively (Figure 3).

Other New Paradigm reports explain how the N-Gen is unlike any generation that has come before it. In contrast to their parents or grandparents, members of this younger generation cannot fathom a world without digital technologies such as the Internet, CDs, DVDs, digital cameras, MP3 players, cell phones, video games, text messaging and instant messaging. N-Geners use digital tools to spend their time playing, communicating, and learning new ways to think. As access to these technologies increases, the world will witness the rise of the first globally-connected generation.

Although youth culture will be global in some important respects, it will remain resolutely local in others. Countries outside of North America have long been aware of American movies and music, but increased travel and new digital technologies—in particular, the Internet—have exposed their young people to an unprecedented amount of Western media and culture. Non-North Americans today have a more complete sense of what is happening in the U.S. and elsewhere in the world. This is particularly true of N-Geners now in the workforce. As Aditi Bakht, an N-Gener in Delhi puts it, “We’re aware what our



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global counterparts are doing. We have friends in the U.S. who are doing the same jobs as us. This gives us a sense of confidence in our own work.”13

Figure 3: Would The Real Baby Boom Please Stand Up?

% of Total Population Population

N-Gen Boom N-Gen Boom

Developed Countries

North America (U.S. and Canada) 28% 28% 93 94

Western Europe 26% 27% 122 131

Japan 22% 27% 27 34

Total 26% 28% 242 259

Rising Economies

China 32% 26% 425 346

India 37% 19% 419 211

Latin American Countries (including Mexico) 37% 20% 208 116

Eastern Europe 29% 29% 93 93

Others (South and East Asia) 38% 19% 402 205

Total 35% 22% 1,545 971

ROW(i) 41% 14% 508 181

World 35% 21% 2,296 1,411

(i) Rest of World

Source: US Census Data International Database; New Paradigm

One particular trend of the emerging global culture that favors multinational corporations is the rise of English as the world language. Partly encouraged by the Internet, the English language continues its hegemony over other languages. Today there are 380 million native English speakers, another 600 million for whom English is a second language, and another 1 billion who are trying to learn the language.14

Of course, while the N-Gen is more aware of the world around it, the world itself has been evolving at a faster pace than ever before. People in rising economies now enjoy many of the freedoms and material goods that have long been enjoyed in the west. Autocratic governments have given way to more democratic structures, democratic governments increasingly defer to the marketplace, and international trade has soared to unprecedented levels. In short, we are becoming McLuhan’s global village.

All these factors play in favor of multinationals’ growing hunger for global talent—more people are now truly available than ever before to fill the gap. What’s more, the main defining characteristics of the global N-Gen make it better qualified than any previous generation to satisfy the needs of global corporations: it is technologically savvy, globally-minded, and generally very familiar with (and even fond of) rapid change.



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Global N-Gen norms Given our shrinking world, it’s no surprise that the N-Gen is the most global generation in history. Our primary research indicates that the8 N-Gen norms are not unique to North America; they are highly descriptive of young people in every rising economy (see this paper’s back cover for definitions of these norms). This suggests that the impact of high technology adoption on young people’s norms and behavior largely transcends geographic and cultural differences (with a number of important variations and distinctions discussed below). The good news is that many of these norms make N-Geners particularly attractive as global employees.

Freedom: N-Geners across the world love freedom, and generally feel more liberated than their parents. In most of the rising economies, this is due to the removal of onerous political restrictions— N-Geners can gather, chat, party, and relocate for work more freely than previous generations. (One exception is Latin America, which generally feels less free, as they are relatively less prosperous than a generation or two ago.) But it also reflects the loosening of family norms: while parents may still have strong opinions about marriage age and prospects (especially in China and India), N-Gen children are given significantly more latitude than their parents or grandparents had when they were young. In a work context, this expectation for freedom can be challenging for employers (e.g., when they are trying to retain employees ), but it also brings with it a much more creative, open-minded workforce.

Customization: N-Geners believe that companies should value their input. The age of rote learning in India and China is coming to an end; N-Geners have been taught that they must think for themselves (though they may not yet have been taught how). This is especially true in countries where N-Geners contribute a significant part of family income. Regardless of where one hunts for talent, employers will encounter an increasingly demanding workforce. Employees expect to customize their career paths and want input into when, where, and how they perform their jobs. The upside is that employers will benefit from a workforce that is committed to changing things for the better.

Integrity: N-Geners value integrity and are intolerant of mixed messages. In the rising economies, this plays out especially strongly—employees expect employers to follow through on promises. (One exception is Russia, where employers may not yet generally stand up to this norm). The upside is that N-Geners often have those same expectations of integrity of themselves.

Entertainment: N-Geners like fun, and in many rising economies, they like to bring it into their workplace. However, just how they like to mix work and fun differs significantly by country. In general, rising-economy N-Geners are more likely than North Americans to think that work itself is fun—especially in the first few years of work, they find joy in the sheer intensity of their work, and seeing its results.

Innovation: N-Geners value innovation, and do not fear change nearly as much as their parents’ or grandparents’ generations. In China and India, most N-Geners take innovation for granted—they simply assume, as do their developed-world colleagues, that everything is meant to get better over time. (In Eastern Europe and Latin America, where N-Geners and their parents have witnessed a marked deterioration in living conditions, this optimism is not as strong). Employers will need to provide innovative work environments to attract quality employees. At the same time, employers can expect employees to question and improve everything, which works in a company’s favor.

Collaboration: In general, N-Geners are much more accustomed to working collaboratively than their parents. Instant messaging and social networking have made this normal. In rising economies, employees may feel less secure about collaboration (relative to their parents, and also to their developed-world peers), because there is still a sharp edge to competition, and many know what it’s like to be poor



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or unsuccessful. But collaboration is in their bones, and if it is encouraged and assisted by employers, it can quickly become a standard modus operandi.

Speed: N-Geners across the world move at a higher clockspeed than their parents; even more so in the rising economies. Bloated bureaucracies, as well as outdated technologies, defined the previous generation. Their expectations for speed are accelerating at a very high pace. For companies in a fast-changing world, this is a huge asset in young employees.

Expression of norms differs around the world The eight themes revealed in last year’s research truly do define a new, global generation. But, as in any intercultural situation, trends are not consistent, andthe expression of these themes varies widely, based on local circumstances.

New Paradigm’s research suggests that the most successful corporations will tailor their global culture, processes and expectations to the local interests and desires of this highly empowered generation of young people (see Appendix 2: Select Results from New Paradigm’s Global Survey). Accordingly, the rest of this paper provides a more detailed portrait of the N-Gen in each of four major rising-economy regions: India, China, Latin America, and Central Europe and Russia. For each region, we provide a brief background, then explore how local demographics, economic, and cultural conditions alter the expression of the N-Gen norms. We also provide N-Gen talent management strategies and examples that cater to these localized norm expressions.

Not all regions are equally promising for all multinational employers, and so we have given the various regions differing emphasis in this paper. By sheer numbers and the attractiveness of the domestic business environment, India and China merit deeper consideration than the other regions (with a notable sidebar for the rest of South and East Asia). Among the other two major regions we cover, Latin America holds greater long-term promise with its substantially larger N-Gen population (see Figure 3). However, Eastern Europe’s N-Gen is much more immediately valuable and accessible, mostly due to a broader, deeper education system; so we have given it slightly more attention this year.

India Perhaps more than any other country in our sample, India’s N-Geners are just waking up to the huge potential and opportunity they face. In a surprisingly short time, in fact, they may have become overconfident—there are significant signs that the country’s economy, and especially labor conditions, are overheating. Young people are extremely confident, sometimes even cavalier, to the point that retention and turnover rates have become major issues; at their worst, these rates are almost as high as in Mexico’s maquiladoras.15 Wages are currently rising at 16 percent per year and turnover can exceed 40 percent.16 It has become commonplace for employees to quit with no notice, or simply not to show up on their first day.17

This confidence flies in the face of the second major challenge in India, namely the large gap between the best- and worst-trained graduates. Although graduates of the famous Indian Institutes of Technology and their sister Indian Institutes of Management (IITs and IIMs) compete with those from leading universities such as Harvard and MIT, the vast majority of the 11 million students in the 18,000 second-tier Indian colleges and universities are considered unemployable by top global and local companies.18 This requires employers to provide aggressive training, which often exacerbates the turnover problem—well-trained employees can sometimes jump ship just after the training is over and double their salary elsewhere.



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Despite these problems, India still possesses the highest potential amongst the rising economies for providing qualified young employees, especially for global corporations looking to locate international operations. It is no coincidence that Cisco, Citibank, GE, IBM, and Accenture have all invested in India. The secret is to engage and evolve relationships with the most attractive Indian N-Geners. These are not the ones who hop from company to company for pay increases alone. Rather, companies that craft a broader value proposition for their employees can develop relationships that add lasting value for both parties.

India’s N-Gen norms

Pay For Indian N-Geners, as for employees everywhere, pay is among the most important features of a job. 19 It connotes value, it provides prestige, and it provides immediate benefits in the form of a higher standard of living. As mentioned above, for Indians, there is a kind of “leverage” that comes from high pay—Indian employees often live with parents and even grandparents, and they can provide up to 70 percent of the family income.20 A young HR manager in India points out, “A lot of the people that I hire are not the only bread winners but probably the highest bread winners in their family because they come from small towns and cities… At least half of the hires would probably be sending a big portion of their money home.”21 So a pay increase for an N-Gener benefits a whole family.

Savvy employers can learn from this, and tailor their talent management offerings to engage the whole family. Indian families can make the North American concept of “helicoptering” look mild by comparison; they expect to have deep understanding and input for all of their children’s decisions. So, when recruiting, successful employers reach out to parents at the same time as N-Geners: they hold information sessions for parents and campus tours for people who receive job offers.22 Then later, they encourage employees to refer their siblings and cousins, and they offer “family benefit” programs (access to gyms, theatres, etc., for family).23 These moves actually tie employees into the company—it can be much harder to jump ship when the whole family will lose their perks as a result!

Another reason why pay matters to Indians is because they want to participate in the huge leap in consumer wealth they witness all around them. India is highly oriented to discretionary spending. Today, households in India spend 50 percent of their income on non-necessities, even though per-capita income in real PPP (purchasing power parity) terms is only $2,500 anually; in South Korea, by contrast, real PPP per-capita income had to reach $5,000 before consumers could redirect such a high proportion to non-necessities.24 As one N-Gener says, “A lot of people, when they come from small towns, want to fit in with the people in the big cities that they’re coming to live with. And the fastest way to do that is to attain status symbols, such as mobile phones and computers, and for that you need a lot of money.”25 Savvy employers can provide some of these status symbols as employee benefits.

With these and other more comprehensive strategies in place (see the “Successful N-Ployment strategies” section), the best employers offer top-quartile, but not necessarily absolute-top, compensation.26 In fact, it can be counter-productive to match absolute-top salaries. Multinational companies are held in very high prestige, and can usually attract the very best talent without paying at the top (see the “Prestige” section); and employees motivated disproportionately by salary are also disproportionately likely to switch jobs quickly and often. On the other hand, for a multinational corporation to offer less than top-quartile pay would undercut its prestige, and likely result in fewer offers accepted.



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Prestige Prestige and pay are closely linked in the minds of many Indian N-Geners. There is a very large cachet associated with working for the best employers. This is partly because it implies success in a very competitive hiring process. Indian education is driven through an extremely rigorous “ranking” process, in which scoring outside the top ten of several thousand participants on an exam can mean denial to medical or engineering school because of caste restrictions.27 Getting accepted to a top-tier employer is treated with the same honor and respect as making it through one of these exams. And of course, it also implies a bright future ahead.

Figure 4: I Want To Work For Large Or the Largest Organizations

35.9%

16.3%

0%

10%

20%

30%

40%

India North America

Source: New Paradigm Global Survey

Figure 5: I Want To Work To Include…

84.0%

30.2% 31.7%

80.6%

0%

20%

40%

60%

80%

100%

India North America

ProjectsTravel

Source: New Paradigm Global Survey



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The good news for multinational companies is that they are very highly regarded as employers.28 Indian N-Geners are more than twice as likely as their North American counterparts to want to work for a large, or one of the largest, organizations (see Figure 4). A large part of the appeal lies in “international work”—Indian N-Geners crave exposure to leading-edge, international problems and colleagues (whether internal coworkers or clients). (See Figure 5). At the same time, they are very aware that what makes work “international” is not so much the location of an employer’s headquarters, but is rather the clients and/or nature of the job—strong Indian-headquartered, global corporations such as Infosys or Tata Steel are just as attractive as employers as companies based in North America or Europe (and sometimes are even more attractive). In fact, the strongest Indian employers (e.g., Infosys) can often recruit the very best candidates for slightly lower pay than can multinationals, who carry slightly greater prestige.29

Innovation For Indian N-Gen employees, innovation is the most important of the eight norms.30 “I can see the kind of apathy and the kind of boredom that can happen when a company you’re working with is not innovative. Innovation would be key to whichever job I’m going to be doing after my schooling,” says Pallavi Bali, a young media professional in Delhi.31 But an Indian’s view of innovation is much different than a North American’s. In North America, innovation is generally considered the province of small start-ups and rebels. In India, the path to innovation is best achieved with large and prestigious companies, preferably ones that are multinational.32 The larger companies are literally remaking the countryside. For instance, Infosys is transforming Mysore, near Bangalore, from a sleepy university town into the centre of its training and development efforts—launching literally hundreds of businesses dedicated to supporting its employees as they move or when they visit.33 Other companies are making similar changes to even smaller cities. Indian N-Geners want to be part of that process.

Collaboration Collaboration has not traditionally been a part of Indian industrial practices. The majority of jobs available to previous generations were very tightly defined, so that workers completed their (white- or blue-collar) task and simply shifted the end-product to the next employee in line. Moreover, some of the fierce competition from the education system has also spilled over into corporate workplaces, with employees very concerned about protecting their relative position for promotions or raises. These factors continue to worry many Indian N-Geners.

Working against that grain, the fast-growing, high-profile industries in India absolutely require teamwork for success. IT and business process outsourcing (BPO) projects are always team efforts—a focus onindividualism, even by top performers, usually undermines accomplishments. With their positive image in the country, these industries are making collaboration more attractive to N-Geners than it has been for previous generations.

In order to help employees through the required shift in mindset and values, companies are engaging a cottage industry of “finishing schools” that teach soft skills to graduates and new employees. Intense, one- or two-week training programs focus on the basic building blocks of collaboration: “the ability to speak crisp English with a placeless accent, to design and give PowerPoint presentations, to write in logically-ordered paragraphs, to work collegially in teams, to grasp the nuances of leadership.”34 These skills are especially valued by BPO firms with a customer service angle, and increasingly by large domestic employers such as ICICI Bank.35 Soft skills training can take up 40-50 percent of the long initial training programs that characterize many successful employers (see “Successful N-Ployment strategies”).



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Integrity The most prestigious Indian businesses, especially those still owned and run by the Indian Boomer generation have traditionally placed a strong premium on integrity. For instance, the Tata family has provided India’s most successful industrial scions for three generations, founding such successes as Tata Steel, Tata Tea and Tata Consultancy Services –India’s largest IT outsourcing company; but the family’s values and ethics have always prohibited bribes or corruption, despite the prevalence of these practices throughout the country. (These strong values led the Tatas to underwrite the freedom movement of Gandhi and Nehru, and have provided the credentials which keep this family close to political circles of power and influence to this day.) More recent scions, such as the founders of Infosys and Wipro, have very much followed in this path.

Given that history, it is perhaps surprising that the Indian N-Gen values integrity least among the eight norms, and they have lower expectations of their employers when compared to North Americans.36 Whereas in North America, integrity means, “I want my employer’s actions to match my values,” in India, it’s defined much more narrowly: N-Geners are chiefly interested in how fairly the company deals with them as individual employees. As one N-Gener puts it, “People are not so conscious about the external impact of their work. I would say that [North American style] social consciousness is not there. We are more selfish right now.”37

Bribery, for example, is generally viewed as OK as long as things get done. The N-Gener continues, “There are organizations that believe it’s all business, they are not in it to make friends and whatever way it gets done, you do it. So I think integrity is low right now.” This is probably a disappointment to the N-Gen’s elders. “If you would talk to anybody from our grandparents’ generation, all of them would be extremely disappointed at the decline in certain values in the youth of today.”38 That said, in India there is a widespread belief that values stand in the way of progress.

For multinational employers, this view of integrity can be disappointing, and it certainly cuts against the trend in North America and Europe, where companies attract and motivate employees in part by showing off their positive values to society. Nevertheless, the case should not be overstated. Almost all of the most successful, highest-profile Indian employers wear their values on their sleeves, and this is slowly but consistently changing the rest of Indian society. For instance, recent projects in Andhra Pradesh and Tamil Nadu have installed PCs or kiosks in villages, for the purpose of simplifying and clarifying government documents and fees; these have made local government dramatically more transparent and bribes harder to collect, since villagers no longer need to go through “middlemen” to submit applications. These trends will make integrity an increasing part of India’s success.

In addition, the urge to help others is still relatively strong in India. Fourteen percent of Indian N-Geners list non-profit organizations as their preferred employers—a number significantly lower than in North America (25 percent), but significantly higher than any rising economy other than Russia.39 Many of the most innovative efforts in poverty reduction worldwide, such as microfinance or improving girls’ education, are being spearheaded in India or South Asia, often by locally-based organizations such as Grameen Bank or the Ashoka foundation.

Entertainment The final N-Gen norm worth highlighting in India is entertainment. In this regard, Indian N-Geners are turbo-charged compared to their North American peers. In North America, employees are thrilled to find a foosball table or a lounge at work, whereas in India, the most successful corporate campuses are virtual theme parks that make the dot-com excesses look mild. For instance, the Infosys 54-acre campus on the outskirts of Bangalore has every possible amenity, including gyms, yoga studios, a multiplex cinema,



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banks and bowling alleys. The restaurants serve 14 different cuisines. Many of the buildings are in the low-slung Californian style, but some of the largest are modeled on Western icons, such as the Sydney Opera House, the Louvre pyramid or Rome’s Basilica of St. Peter.43 Reassuringly, employees are not allowed to use the amenities during work hours; but they are packed with young people mingling in the evening after work.44

The first lesson multinational employers can learn from Infosys’ success is that Indian N-Geners enjoy seeing their colleagues as a kind of extended family. Among many families, especially in the South of India, it is common for young people to spend the vast majority of their social time with their families and a very small handful (sometimes only 1-2) of non-relative friends. By creating comprehensive campuses with all the amenities, employers help create an atmosphere that extends that social circle productively into work. Almost 30 percent more Indians than North Americans say their co-workers are good friends.45

The second lesson is that Indian N-Geners are hungry for some of the “global lifestyle” they see on TV and in the movies. In rising economies in general, companies can bring that lifestyle to the employees much faster than their local cities can grow it organically. The benefit is not only happier staff, but also loyalty, since it can be hard for smaller companies to match these perks.

Successful N-Ployment strategies How do successful employers take advantage of these N-Gen norms? We see 5 keys to success:

1. Recruit from second- and third-tier cities. Between them, the top-tier consultancies are hiring 100,000 new knowledge workers each year. That means they, and everyone else, have to look beyond the traditional elite schools in the big cities for talent.46 The better opportunities are at top schools in second- and third-tier cities—populations of 500,000 to 1 million—where it’s still possible to find students with a good education who chose to remain close to home (see NTPC sidebar). Second- and third-tier schools in big cities such as Bangalore can yield less-inspiring results.

National Thermal Power Corporation (NTPC)40

Despite the competition from more alluring industries such as IT and BPO, one stalwart company has managed to find a way to stay top-of-mind with strong N-Gen candidates by designing their employment offering around the unique needs of Indian employees.

NTPC is the largest thermal power generator in India and the sixth largest in the world. The company has received many HR awards including a third ranking in the Indian “Great Places to Work” index compiled by the Grow Talent Company, the same organization which performs the rankings for Fortune’s “100 Best Companies to Work For” list.

The company hires mostly engineers, which puts it in direct competition with more prestigious companies in the IT sector. To combat this, NTPC does not recruit at the prestigious IITs and IIMs, but rather targets graduates from Regional Engineering Colleges. The company looks for candidates who are willing to trade in the prestige and fast-paced lifestyle of jobs at IT companies for stability, work/life balance, and a values-driven culture.

NTPC’s understanding of Indian culture is evident in their employment practices. The strong focus on family is reflected in the HR vision of “enabling the employees to become a family of committed world-class professionals, making NTPC a learning organization.”41 The company ensures that the families of its employees are adequately cared for. NTPC offers pensions, educational grants for children, medical care, and residential housing at their remote plants.

Training and development is combined with career planning to offer young recruits a steady and clear path. The company allots an average of 56 hours of training time to employees annually. NTPC runs the Power Management Institute, an independent training and development center open to those outside of the company. The Institute is tied to one of the famous Indian Institutes of Technology, and offers over 200 training programs at its state-of-the-art campus in the suburbs of New Delhi.42



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2. Intense, up-front and ongoing training. Every successful Indian employer engages new recruits with an intensive training program, often from 4 to 9 months long. “We build our own engineers,” says S.K. Bhagavan, who oversees Wipro’s in-house “talent transformation” team of 70 faculty members. In a year, Bhagavan’s team conducts 150,000 hours of training, and that includes a heavy dose of soft communication and collaboration skills.47 Top employers should consider:

» Ongoing training, especially in management skills. Predictably, many Indian talent shops have focused on recruiting and preparing entry-level employees, and have left some gaps in their more senior ranks. One Infosys executive identifies a particular gap in management training: “Middle management is very young, because everyone is promoted very quickly. We are not doing a great job at career counseling, coaching, etc. That’s coming out in the [employee satisfaction]

National Thermal Power Corporation (cont’d)

NTPC’s corporate culture emphasizes accountability while giving their managers a high degree of autonomy. Strict measures and deadlines are used to manage the progress of various projects. Internal and external benchmarking are also used. The company has performance appraisal and employee feedback systems designed by A.T Kearney and Hewitt Associates to help assess management performance. 360-degree feedback reviews ensure that even junior employees have a voice. All promotions are based on merit and performance.

The results are impressive. Most remarkably, NTPC’s attrition rate in 2004 was 0.17 percent, the same year that the IT industry hit a high of 22 percent.48 NTPC is also one of the most efficient power generators in the world and enjoys above average profitability. A surprising set of results for a company 90 percent owned by the Indian government!49

surveys.”50 More traditional employers, employers, such as NTPC, have been able to maintain strong reputations despite being in less-sexy industries, just because they offer this kind of longer-term training (see NTPC sidebar).

» Paid corporate schools. One trend worth watching is the emergence of paid, corporate schools. For instance, retail giant Pantaloon has started MBA and BBA programs at a number of universities; in return for sponsorship, they have first pick of the top students. And Ernst & Young has begun a paid training academy in Mumbai, hiring the top students as associates.51

3. Engage employees throughout their career. Many N-Geners are impatient for promotions and greater responsibility within their companies. One solution that has been successful in India is to engage them early as a way of identifying and rewarding high-performers, and also to capture their loyalty. For instance, Infosys has created a “Voice of Youth” council of 8 high-performers; they help prepare for, and participate in, Management Council Meetings every 2 months that bring together the 16 most senior executives and 20-30 invitees.52

4. Bring in best-practice HR from home. A couple of issues show particular promise for applying North American best practices:

» Career paths. The most pressing emerging demand, especially from workers in the fast-growing BPO and IT industries, is for a clear career path. These organizations tend to be pyramids with very broad bases and narrow tops—so employees often feel that it is unlikely they will be promoted fast or far enough. As one Dell senior manager puts it, “To improve the retention rate within the industry, we need to highlight the career path to the employees within a BPO organization. Once the employees understand their growth options within the organization, it is very unlikely they will want to leave. We need to look at enhancing their skill



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sets.”53 This is something more traditional employers do well, and it stands them in good stead (see NTPC sidebar). There seems to be an especially strong opportunity for tapping emerging best practices around letting employees design their job descriptions, roles, and career paths.54

» Flexible hours and locations, especially for women. As recruiting spreads to second-tier cities, employees are increasingly interested in more flexible working arrangements. These are just on the cusp of becoming standard features for any leading company. At Infosys, one of the larger sources of attrition is the lack of a Delhi campus. Employees are keen to move back close to home, especially when they have children.55

The issue is especially acute for young women. One N-Gener says, “Many women go to good colleges and can acquire graduate degrees and enter the workforce, yet they’re still expected to get married. It’s a very strange sort of freedom in some cases because on one hand you’re given a lot of freedom, you’re given a choice to explore, to do what you want, but at the end of the day in many families it still comes down to tradition and culture.”56 For employers this means that many of their best employees leave after only 3 to 5 years on the job.

Companies are just starting to respond successfully to this opportunity. For instance, Tata Consultancy now offers two years extended leave for women: “They can start a family and rejoin at the same post. They are very good resources and its worth the effort,” says S. Padmanabhan, global head, human resources.57 Infosys has set up a satellite office in Bangalore, specifically for women to work while pregnant or with young children.58 The most creative companies will probably introduce some form of work-from-home programs soon, now that broadband internet access is widely available and the need for employees is becoming more urgent.

5. Tap the Indian diaspora. Young Indians educated abroad often move back to India after a few years to take advantage of employment opportunities and to marry. Aditi Bakht says, “A lot of our friends who are working abroad now want to come back and maybe do an MBA in India and work in India. People see that the quality of life here has improved and that opportunities exist.”59 This can be an especially valuable source of more senior, lateral hires—roles that are especially difficult to fill in India today.

Taken together, these strategies help companies build longer-lasting, stronger relationships with their staff, and even with their alumni who might become staff again at a higher level a few years down the road, or at least serve as a good referral source (see the recommendations at the end of this paper). Those relationships are the key to the N-Gen talent. See the sidebar case study—the lesson from NTPC, one of India’s power generating companies, is that you don’t need to be in a sexy industry to get great employees, if you target people who value what you offer and give them what they want.

China Business in China has been booming for at least 10 years longer than in India, and the boom there feels a little more sustainable and less like a bubble—the Shanghai A-class equity market notwithstanding. But the same two basic features define China’s employment environment as do India’s: high turnover and fast-rising wages, and an education system that turns out many mediocre (or worse) graduates that are unsuitable for multinational work.

China currently produces more than 3.1 million university graduates per year, but less than 10 percent of these are suitable for employment in a multinational company. The biggest failing of the remaining 90 percent: poor English language skills.60



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The nature of education received by Chinese university students also limits their appeal to Western companies. One-third of university students are in engineering. Most of their training is biased towards theory. Chinese students get little practical experience in projects or teamwork compared with their counterparts in Europe or North America. The curriculum focuses on rote learning, passing examinations, and puts little emphasis on creativity. The upshot is that the number of engineering students in China suitable for multinational employment is no larger than that which is available in the United Kingdom.61

The mismatch of talent supply and demand in China increases the challenge of finding skilled individuals. Of the 1.7 million students who graduated in 2003, less than one-third of them had studied in any of the top ten university cities. Only one-quarter of all Chinese graduates live in a city or region close to a major international airport. On top of this, only one-third of all Chinese graduates move to other provinces for work. By contrast, almost half of all Indian graduates are close to a major international hub. Multinational companies that want to hire Chinese graduates have difficulty reaching as many as half of the potential candidates.62

Despite these difficulties, there is no question that China is an important destination for knowledge work. The Chinese government is committed to matching or besting India in taking on sophisticated services such as hardware and software design, and entrepreneurs are working hard to fulfill that vision. China’s path may be slower, and less grandiose than India’s (less spectacular in success and perhaps also less risky of failure), but the opportunity is undeniable—and for many global corporations, simply unavoidable.

China’s N-Gen norms

Prestige China is unique among the countries in our sample in that prestige is considered more important than pay when choosing a job (though the two are clearly related).63 Jobs with multinationals in particular are among the most prestigious in the country. One HR consultant comments, “I think right now [N-Geners] are more focussed on brand than on innovation. They’re more interested in the Toshibas and Canons than less-known but innovative companies.”64 This is especially true in high-skill areas and high-growth industries. Ray Ling, a Chinese N-Gener and employer, points out, “Young people are drawn to what they perceive to be sexy industries such as finance and electronics.”65

A second source of prestige is connections. China is still characterized by a mainly relationship-based business world where things get done through connections. This favors jobs that offer employees the chance to network with others, especially others in higher profile roles—think of sales or purchasing.

Pay Of course, one of the most significant drivers of prestige is pay. Pay rates in China are rising less quickly overall than in India, but for knowledge workers, especially those who speak English, they are rising even more aggressively than in other countries.66 As Anita Tang, an HR consultant in Hong Kong, puts it, “I’m not talking about the plant workers or the production workers, but the people they need brain power for. Also for the people who have global exposure and multilingual capacities—English and Mandarin—to cope in an environment dealing with the locals and dealing with headquarters. Those are the kind of workers that are expecting the 25 percent pay increase.”67 One quarter of 600 executives surveyed have plans to increase their salaries by more than 20 percent.68

Again, it helps to know why pay matters. One reason, as was common in India, is that Chinese N-Geners often contribute a significant portion of family income. Pay doesn’t come with the same



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“helicoptering” that exists in India (for instance, we don’t know of any companies offering information sessions for parents in China), but the importance of contributing to family welfare means that pay can be the determining factor when choosing amongst employers. It can be difficult for an employee to stay with a current employer when offered more money elsewhere; it means not just she, but also her parents and siblings, will lose out on an improved standard of living as a result.

A second reason is that increased pay often confirms an employee’s development and corresponds to increased opportunities for learning. This turns out to be a major motivation for Chinese workers, as we will see below.

Customization Customization is one of the strongest norms for the Chinese N-Gener. More than half as many Chinese as Americans agreed that, “Instead of having a job description handed to me, I want to be able to have a say in my job responsibilities” (see Figure 6). Unfortunately, the opportunity is almost never available. As Tang puts it, “Most young employees are not expecting much input into their jobs. They take what is given to them. The expectation here is you take your role; you do the best job you can within your role. At some organizations, if you make suggestions, they’ll just point you back to your desk and tell you to focus on your work.” 69

Figure 6: Instead of Having a Job Description Handed To Me, I Want To Be Able To Have a Say In My Job Responsibilities

77.5%

49.8%

0%

20%

40%

60%

80%

China North America Source: New Paradigm Global Survey

Perhaps as a result, Chinese employees change jobs rather than job descriptions—usually by changing employers. The motivation is not just pay or prestige, but personal development. Ray, an N-Gen employer explains, “Young people like to be exposed to new things in their jobs. This is one of the drivers of the high turnover. In most cases they want to change, unless the company is really, really good at teaching them and giving them a lot of responsibilities. Most of them I would say want to leave within a year and a half or two years.”70

The modern Chinese workers’ focus on career advancement is resulting in high turnover rates. In a survey of 600 executives, more than one-third reported an annual turnover rate higher than 10 percent.71



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Workers will readily quit one company to work for another if it means a promotion or increase in pay. Companies face a constant shortage of trained workers and will often poach from one another.

China’s red hot economy allows Chinese N-Geners, especially knowledge workers, to indulge this desire for change. More than half of executives recently surveyed say their company plans to expand their headcount.75 This is why less than 1 percent of graduates are unemployed.76

Collaboration New Paradigm research shows that collaboration is one of the weakest norms in China. The work culture is very individualistic and competitive, which is a continuation of the education system tradition that emphasizes the individual and not teamwork. At the employee level, “there is little collaboration and sharing of knowledge. The culture is very competitive.”77 This contrasts somewhat with the ability of Chinese companies to collaborate extremely fluidly and effectively with other companies, both locally

and globally. For example, the Chinese motorcycle industry is well-known for its highly self-organized and collaborative approach to reverse-engineering Japanese motorcycles and then assembling their own brands for domestic and international consumption.78

As a result of the personal competition, employees are not likely to form strong friendships at work.79 One employer points out, “One of the biggest challenges we have is to get people who are willing to train others. They like to keep their knowledge to themselves and we really need to encourage them to teach and collaborate.”80

Integrity The Chinese N-Gen sense of integrity differs from North America and is similar to India in many respects. Chinese employees are used to a national

culture that has them “wear a different face” (an old Chinese phrase) in different situations: as Ray puts it, “The way people are at work and outside of work is very different. They are very adaptive to what you want them to do...” As a result, “they don’t care about the values you have with your company as long as

Shenzhen General Talents Market72

Figure 7: Shenzhen General Talents Market

Many employers in China seek to find and recruit staff quickly, especially for lower-level jobs. Located in what is arguably China’s second-most dynamic city, the Shenzhen General Talents Market provides a uniquely Chinese answer to the challenge. We present it here not so much as an example of a “best practice,” but rather as an illustration of how different businesses can work in China.

The General Talents Market (also called the Human Resource Service Center, or HRSC) is essentially a six-day-a-week open market for staff. Every day, approximately 150 employers screen up to 8,000 applicants and often hire on the spot. Employers range from small local businesses to some of Shenzhen’s biggest corporate citizens, such as Foxconn.73 There is also a complementary online site, www.szhr.com.cn.

The talent market is operating at capacity. There is a waiting list to reserve a booth, especially for busy days such as Mondays. The speed of business and the keen interest for both employers and job seekers to settle their searches, mean important decisions are often made on the spot. One employer remarked, “For my company, we offered many people interviews in the afternoon, at our company location. They climbed on a bus and came to our offices with very little knowledge about who we were and what we did. I’m not sure I know why they were so trusting.”74



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you’re treating them well and it doesn’t affect them.”81 Appealing to values or goals like “making the world a better place” is not likely to motivate Chinese employees. Almost none of them want to work for non-profits.82

On the positive side, sincere and repeated attention to team-building, just using simple ice-breaking and team-building exercises well-established in North America, can have excellent results in getting engineers and other knowledge workers to collaborate at the office.

Entertainment Finally, it is worth noting a subtle, but important, shift in the meaning of entertainment as an employment norm. For North Americans, entertainment is something one enjoys while taking a break from work. For Chinese N-Geners, it generally means the work itself is considered entertaining, because it’s considered “fun” to be able to work hard and make a difference.

The upside: Chinese workers are among the most dedicated in the world, in terms of the hours they will put in. It is not uncommon to see cots in Chinese knowledge workers’ lab spaces, so they can sleep over as they crunch through an engineering problem.

Successful N-Ployment strategies Unlike India, where employees are among the most satisfied in the world, Chinese N-Geners are generally not happy with their current employment.83 This presents a large opportunity to innovate beyond current Chinese best practices in talent relationship management. Here are some China-specific suggestions:

1. Play up international brands for prestige. In China, even more than India, multinationals are highly regarded as employers. In general, they are more highly regarded than even the best Chinese companies (though stock options in Shanghai A-listed companies are currently a big hit).

2. Create a very fast recruiting cycle; from the application process through to hiring, with lots of feedback in between to ensure that accepted offers actually translate into a new employee. Many candidates will accept several offers and then choose one at a later time.84 One successful technique is to interview and make an offer the same day, with work starting the next day; this can reduce the opportunity for employees to fish for better offers (see sidebar on the Shenzhen General Talents Market).

Shenzhen General Talents Market (cont’d)

The Talents Market has a membership base of over 10 million individuals across the country. Since its inception in 1997, HRSC has a record of 250,000 corporate users and over 3 million job postings. Its current market recruiting sessions comprise 10 percent of participants in all market recruiting sessions across large to mid-size cities in China.

Both the online and physical markets attract all levels of workers. Some of the talent pools include: • semi-skilled labor and office workers • post-secondary graduates who are candidates for

internships; HRSC is affiliated with some of the most prestigious universities in China connecting their graduates to jobs

• high tech industrial workers with the necessary experience to work in the technology sector

• short-term employee “lending” pools, for which the HRSC performs the hiring process prior to an actual job posting, and sends out appropriate employees according to a job posting’s specifications

• experienced executives typically of a high salary range

Local sources and practices such as this are often the key to getting the right people. Engaging your N-Gen employees to help with recruiting, as we suggest at the end of this paper, is the best single way to stay on top of these opportunities before they pass you by.



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Other South and East Asian Countries

India is overheating, and China poses many challenges for multinationals seeking global knowledge workers. Where might the next talent market opportunities lie? As the following sections illustrate, Eastern Europe or Latin America are unlikely candidates.

In fact, the third-most attractive market for global knowledge-worker talent includes the countries of South and South-East Asia, excluding India and China. Together, these countries provide an N-Gen population almost equal to either India or China—and more than a third bigger than Eastern Europe and Latin America combined. Perhaps the most attractive opportunities—and the ones most likely to garner multinational attention over the next 5 years—are the Philippines and Thailand, with Vietnam, Malaysia, and Pakistan as notable contenders.

The Philippines and Thailand have been averaging an impressive 5 percent GDP growth over the past five years. Both countries are major manufacturers and exporters of sophisticated technologies such as semiconductors, circuits, and other electronics as well as machinery and mechanical appliances.85 As in China, they are quickly developing expertise in these key areas. Both countries also have deep pools of university-educated young professionals. The Philippines boasts well over 500,000 such professionals while Thailand has about 300,000.86 Although Thailand still struggles with political instability, the Philippines and other South-East Asian countries are enjoying much more stable political environments.

Each of these countries demonstrate an interesting mix of the same forces already at work in India and China, and so the broad strategies we recommend elsewhere apply to these countries as well, with some modifications:

• Less focus on second-tier cities. Especially in the Philippines and Thailand, the biggest city (Manila and Bangkok respectively) continues to deserve the most attention. The supply of talent, at least anecdotally, is not yet high enough to require multinationals to move to second-tier cities.

3. Find a way to use talent from second- and third-tier programs and educational institutions; N-Geners from these institutions can be much less expensive, and much more loyal. One method is to take a page from India’s book and recruit smart generalists, or even high school graduates, then train them intensively. As one employer (whose work is primarily clerical) puts it, “The last few years we have hired mostly from high school because those are the ones who actually stay. We have a lot of trouble keeping employees that are educated past high school and definitely a very tough time retaining the university grads.”87

Companies that cannot migrate to these second- and third-tier graduates because skill requirements are too high usually have to forge strong relations with top universities to get a first crack at their graduates; this is a very competitive space. GE, for example, has relationships with 17 of China’s top 50 universities.88

4. Make English a team effort. One challenge regarding second- and third-tier candidates is that they almost never speak English. One way to overcome this is to design teams around project managers and leaders who speak English; they can act as translators for individual team members. Marry this with English training for any employees who want it. The combination is still much less expensive than hiring first-tier employees.

5. Bring women into your workforce. Focusing on second- and third-tier schools can often lead employers to also locate in smaller cities, a very valuable combination, especially with regards to retaining female employees. Family is extremely important, and strong family expectations, tradition, and predetermined social roles dictate how Chinese individuals spend their lives. Sons are thought of as providers, and are encouraged to obtain professional degrees in order to climb the social ladder. Daughters are under much pressure to get married at a certain



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age, often limiting their time in the workforce. Ray Ling says, “One of the challenges in retaining staff is the fact that in the mostly young female workforce, most have trouble finding a boyfriend. In Shenzhen most factories tend to hire females. The ratio from females to males is seven to one. Once they hit 23, their parents urge them to go back to their town and get married.”89

The hidden opportunity is to train and develop women near their homes, and then to offer relatively flexible hours. This can provide a very strong, and very loyal, employee base. The trend is already developing with manufacturing jobs, and we anticipate similar progress with knowledge work soon. Ray Ling points out, “A lot of manufacturers have moved their facilities closer to where the workforce is so that the young female workers can seek a job and have their family at the same time, closer to their hometown.”90

6. Introduce cross-functional training to satisfy employees’ hunger for development. Although some companies have tried to create more layers and titles to satisfy employees’ hunger for prestige, it may be a more practical answer to move them through various functions within a company. Tang notes, “One strategy is to have trainee programs that attract graduates. It’s a more creative way to provide a sense of forward movement: rather than promoting somebody every year you move them in different departments. That gives them a sense of, ‘I’m going somewhere,’ because they just won’t stay in the same job and wait three years for a promotion.”91

Russia and Central Europe The gap between Russia and Central Europe is growing. Despite recent economic growth, Russia is an ailing country, with a shrinking population. Its closest Eastern European neighbors (e.g., Ukraine, and Romania) share much of that fate, but the Central European countries furthest from its orbit (e.g., Poland,

Slovenia, Hungary, and the Czech Republic) seem to be gravitating towards the European Union. (Notably, the employees closest to the E.U. are fleeing as well, often leaving home for good jobs in London, Munich or Barcelona.)

To make matters worse, Russia’s business environment—known for corruption and government strong-arm tactics—scares away many Western investors. A Gartner IT industry analyst says, “One of the biggest challenges is global public perception of Russia as a place to take work to. If you look at what companies are doing, they are saying they are happy to do business in Eastern Europe—but not Russia. That’s going to take years to break down.”92

Other South and East Asian Countries (cont’d)

Nevertheless, some of the same applies: second-tier schools in the biggest cities; and there is still a strong draw back to smaller cities for women and some men as they start to have families.

• strong focus on training. In many ways, even the bigger talent markets in these other countries are similar to second-tier cities in India and China. No other country boasts quite the same caliber of top-notch universities as India, and China’s best technical universities still stand significantly above the best schools in neighboring countries. So, the focus on training is critical. Just as in India and China, remember to extend this attention beyond the initial orientation and into management training.

• pave the way for women. In these countries, as in India and China, women are talented, loyal employees. Consider providing “leapfrog” working conditions to tap into a pool of strong employees who might otherwise go underutilized.



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Despite these factors, Russia and Eastern Europe are attractive places for short-term recruiting—more attractive than Latin America. However, in the medium-term, the region’s demographic problems foretell a miserable decline.

The N-Gen has particularly broad and deep knowledge and skills related to IT and engineering. The Russian engineering diaspora is large and powerful—especially if counting Israelis of Russian origin. But those who remain show promise as well: Russian technical universities continue to produce extremely strong graduates by global standards. The country generates well over 225,000, high-caliber science and engineering grads per year. Steve Chase, president of Intel Russia comments, “We continue to see very good students come out of the universities”; in computer programming, he states, “the Russians are absolutely tops.”93 In fact, as western companies move in, the market for qualified technical personnel is tightening. The labor shortage is leading to a rise in salaries which now range from $1,000 a month for an inexperienced IT worker to as much as $10,000 per month for a project manager with international experience.94 These numbers are 2 to 5 times higher than in India or China.

At the beginning of the 1990s, many trained scientists and academics left for Western Europe and North America.95 However, Russian youth are now less likely to want to move abroad. Sixty-six percent of 16-24 year-olds surveyed said they would not want to live anywhere else besides Russia.96 The reasons include the inclination to be close to family and friends, economic opportunities, and nationalism. Anna Yablokova, a young PR executive, says, “When I was in college, I thought that I would later apply for an MBA at a western school and then work abroad. But I changed my mind a long time ago. I can’t think of any country in the world where I would have been able to be where I am now, at the age of 26. It hasn’t been easy, of course, but we are living at a great time in Russia, and it wouldn’t be smart to miss it.”97

Russia and Central Europe’s N-Gen norms Perhaps more than in any other region, Russian and Eastern European N-Geners face an unbridgeable generation gap. They did not live under communist rule and have difficulty appreciating the suffocating circumstances endured by their parents and grandparents. Conversely, surveys show that the young generation is seen by the older as aggressive, cynical, immoral, materialistic, apathetic, and separated from their roots.98 N-Geners show a complete rejection of old values and institutions. Many N-Geners express despair. Edith Balazs, an Eastern European young professional, says, “Politically, young people feel that they have very little influence. They support one side or the other but they don’t believe that they can make a real difference. One of the major reasons for that is the corruption that goes on in this part of the world.”99 A 2002 study indicated that 55 percent of young Russians were disinterested in politics with a further 35 percent having only medium interest.100

Exacerbating the gap is the high unemployment rate, and high relative poverty among older workers. Older workers are less desired by employers; people over 45 have a hard time finding work. The past communist government’s monopoly over employment produced unmotivated and unproductive workers with little job satisfaction. As a result many current job ads will explicitly state their desire to hire those 30 or 35 and under.101

Older Russians, in particular, feel abandoned by society. There are 36,000 deaths by alcohol poisoning annually, mostly older citizens, compared to a few hundred per year in the United States. Russians smoke more than almost any other country. The result is that male life expectancy is 59 years, one of the lowest in the world.102

Even within the N-Gen cohort there are marked differences between those who have embraced the economic growth and those who have trouble coping. Anna Yablokova explains, “I think that today’s younger generation in Russia consists of two major segments. One includes people like myself and most



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of my friends, who speak different languages, have good jobs and travel a lot. Another segment contains young people who feel lost, apathetic and confused. For some reason, they have not yet been able to adapt to the new realities. Some of them have odd jobs, others no job, and many do drugs.”103

These factors drive a significant part of the distinctions in Russian and Eastern European N-Gen norms, relative to North America.

Pay Pay is important to young workers, but less so than in other developing nations.104 Russian employees generally care more about using technology in the workplace because it connotes a challenging job and a healthy, thriving business environment (see “Entertainment”)—something still more the exception than the norm.

When pay does matter, it can often be because N-Geners in Russia and Eastern Europe are supporting their parents. “In Hungary, a significant portion, maybe 20–40 percent, help their parents with their earnings. Many of them also continue living at home while they work.”105

Entertainment More Russians resonated with the statement: “Working and having fun can and should be the same thing,” than with any other employment norm—over 90 percent of our sample agreed or strongly agreed. This seems to be a reflection of the strong break from communism, when work was a kind of drudgery. As in China, Russian N-Geners see entertainment as the work itself, rather than something outside of work. It is almost unheard-of for a workplace to include any kind of entertainment facilities (e.g., pool tables)—even at the best high tech employers. As Vitaly Gritsenko, CEO of a software company, puts it, the main thing is that his staff “get to use their brains. They are used [from university] to work at full capacity; if they can’t get that, they’ll leave.”106 This attitude corresponds closely with the global N-Gen passion to use technology. Gritsenko points out, “A work environment without the latest technology is not worth working at—it would mean something backwards, from the Communist era.”107

Customization The second-most popular N-Gen norm among Russians is customization. Though it is highly-valued, the opportunity to shape one’s job description is very rare today in Russia. Rather, the true power of customization for Russian N-Gen knowledge workers comes in the form of self-employment.

More than a third of Russians and Eastern Europeans prefer to be self-employed, a similar proportion to North Americans, and a higher number than any other rising economy in our sample except China. Accordingly, only 25 percent of Russians want to work for large organizations—a much lower number than any other rising economy, and much closer to North Americans’ responses.108 This poses a challenge for large multinational employers, and suggests that they will do best when they can emphasize small local teams with entrepreneurial mandates.

One model for coping with this trend is to hire—or at least manage—Russian engineers on a more project-oriented basis than is normal in North America. Until recently, it was quite usual for a company hiring a Russian IT engineer to set a simple coding task as a test: the job candidate was expected to take the task away for 24-48 hours and return with finished code. If the code was accepted as good, the candidate would be hired and paid retroactively for the task; if the code was sub-standard, the candidate would be turned down and left uncompensated. This approach has recently become less common, as the job market is getting too hot for employers to rely on it.109



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Another approach is to simply manage IT staff as freelancers through services such as Elance (www.elance.com). Eastern Europeans make up a significant proportion of the highest software and technology earners on Elance, including the very top spot as of this writing, though Indians truly dominate the field.

Integrity Here again there is a major break with the older generation. In a survey of 18-24 year-olds, 62 percent indicated that they are ready to discard old principles of morality in order to achieve success.110 Not surprisingly, N-Geners do not expect company values to be in accordance with their own. They know that the reality of doing business in Russia often necessitates unethical behavior.111 Corrupt corporate officials interpret policies or promises in ways that benefit them, and youth have little trust or faith in the system since employers often renege on agreements. Although Russia does have a civil code that encompasses workers’ rights, in practice employers have ultimate flexibility in hiring and firing. Young workers also have to beware of their employer running out of money to pay them or getting caught in an extortion racket.112

Successful N-Ployment strategies In this pessimistic environment, Russian N-Gen job satisfaction is very low—second lowest only to China in our rising-economy sample.113 There is widespread pessimism about the current economic and political structure, and work environments. N-Geners perceive clearly that companies are run in a rigid and hierarchical manner, there is oppressive bureaucracy and corruption, and unions are powerful.

The opportunity for multinationals entering the Russian and Eastern European markets is to distinguish themselves from this legacy. Recommendations for such companies include:

1. Use the size and clout of your company to limit unethical business practices. Large international firms are less likely to be the targets of corrupt officials. Oversee young employees to ensure they are following your firm’s ethical guidelines.

2. Seek out top candidates from secondary cities.114 In Russia in particular, it can be easy to think that Moscow is the only place that matters—the city accounts for 20 percent of Russian GDP, and its residents can earn 4 to 6 times the pay of anyone else in the country.115 But the Russian workforce is dispersed and there is little mobility.116 Education in Russian universities is surprisingly broad and deep: there are many strong technical resources available in regional centers such as St. Petersburg, Omsk, or Novosibirsk.117

3. Sponsor and support cash-strapped universities. Following the collapse of communism, many universities lost their funding. In Russia, education funding is a fraction of what it was under communism. The private sector has now moved in to provide up to 45 percent of all research funding. Intel’s approach illustrates an effective strategy. The company first moves in by donating equipment and gradually gets more involved in shaping the curriculum. The company will also contract work to university researchers. “We’re partly doing this because we want a good pipeline [of students] in the future,” explains Steve Chase, the president of Intel Russia.118 Companies such as Cisco, KPMG, Microsoft, and Nestlé also have university programs that support academia in order to attract the top graduates.119

4. Give young talent the responsibility and autonomy to carry out projects, appealing to their entrepreneurial spirits. Also, allow each employee some time and resources to pursue their own projects and interests.



24

This point marries well with the freedom norm valued highly by Russian N-Geners. Especially among engineers, it is widely expected that employees can complete their work at the time of day they choose, and from their location of choice, so long as the code is high-quality and deadlines are met.120 This also favors the freelance mindset discussed under customization.

It also marries well with pay for performance schemes. With universal employment during communist times, the link between compensation/promotion and individual employee performance was very weak. Pay for performance is especially appealing to entrepreneurial and self-reliant young workers.

5. Pay attention to women. Women in Russia, though better educated and generally facing less discrimination than elsewhere, are still a relatively under-appreciated and untapped resource. In particular, they may be uniquely suited to multinationals: they are generally (though not always) less likely to aspire to own their own business, and are more likely to be loyal to an employer who treats them well.121

6. As everywhere in the rising economies, invest heavily in training:

» Augment the solid theoretical grounding of the educational system with intern programs and practical on-the-job training. “The two main things that new graduates are looking for are salary and practical skills. Young people do not work while they study so they are very dependant on their parents. Their education is also fairly theoretical so real-world skills are lacking.”122 Real skills that are lacking include teamwork, leadership, communication, time management, and cross-cultural interaction.123

» Seek out top candidates from non-technical fields and give them practical training. There is a mismatch between the large supply of graduates from non-technical fields and the demand for technical workers such as engineers and scientists. But non-technical educations are often strong as well, and graduates can often learn technical skills with relatively little assistance.124

7. Create elite development programs that will fast track select employees through their careers. The idea of merit-based promotion and competition for the top spots is very appealing to youth in these locations. Russian aluminum producer, Rusal, created a “Golden Reserve” program to help in its restructuring efforts. Victoria Petrova, Rusal’s HR director, explains that, “around these people, we knew we could form the nucleus of the organization and build a new Rusal.”125

Latin America An old joke has it that Brazil is the country of the future and always will be.126 Sadly, the same could be said of many Latin American countries—from Argentina to Mexico, and everywhere in between. Despite a period of economic promise following the Second World War, Latin America remains mired in corruption, bureaucracy, and bloat. Between 1960 and 1980, Latin American economies gained an 80 percent increase in income per person. Over the following 20 years the per capita income grew only 11 percent with most of the growth taking place in the 1990s.127 Because of the difficult business environment, much of economic activity has shifted to the informal sector, out of reach of government taxation and bureaucracy (Figure 8).

Latin American countries often seem to have government programs that mirror North American and European ideas from the 1970s, long since abandoned as overtaxing and cumbersome. For instance, Brazil’s pension system is generous even by industrialized nation standards. Many workers retire in their mid-fifties after 35 years of service (30 years for women). Labor laws are restrictive and taxes add 60 percent to a business’s payroll costs.128 Average severance pay in Latin America is 2.7 months’ salary



25

compared to none in the U.S., 1.1 in Europe and 1.5 in Asia.129 The system drives companies to hire as few people as possible.

Figure 8: Informal Economy

16

26

29

38

0 10 20 30 40

Under the table – informal economy in 2003,(i) as a percentage of GDP

China

India

South Korea

Latin America(ii)

47

21

29

33

37

42

43

61

0 10 20 30 40 50 60 70

Venezuela

Brazil

Colombia

Peru

Other(iii)

Chile

Argentina

Mexico

(i) Latest available data.(ii) Weighted average by GDP.(iii) Includes Bolivia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama,

Paraguay, Puerto Rico, and Uruguay.

% of GDP

% of GDP

Source: McKinsey & Company

The result is predictable: stagnant economies, high unemployment, and an entrenched class system. Latin America has the most uneven income distribution of all regions in the world.130 The education system is poor, and prepares only a select few for work in multinational companies (Figure 9). Latin America’s students rank very low in math and reading tests administered by the OECD.131 Roughly half of 10 year-olds are functionally illiterate. Expensive private secondary education is necessary to attend quality universities; the only well-prepared N-Gen candidates are often children of the rich. As one N-Gener puts it, “In order to get into a very good school and to have the chance to go abroad to study or to work, you need to study in very good high schools and junior high schools. They are very expensive, so low- and middle-class students can’t afford it.”132

For these reasons, we believe Latin America has the lowest short-term potential for significant global hiring among our four regions. Although the demographics are favorable—more than 200 million up-and-coming N-Geners—the structural politics and economics of the region are likely to keep N-Geners underproductive for the foreseeable future.



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Figure 9: Education Standards

3.5

3.7

4.7

3.7

5.8

0 1 2 3 4 5 6

Education enrollment and performance

Chile

Brazil

OECD(iii)

Mexico

(i) Latest available data: Argentina, Chile, Peru from 2000; Brazil, Mexico, Uruguay, other countries from 2003.(ii) Average of math, reading, and science scores.(iii) Organization for Economic Co-operation and Development.

Total public spending on education as a percentage of GDP, 2003

Argentina

50

60

70

80

90

100

300 350 400 450 500 550 600

Mexico

BrazilPeru

Indonesia

ArgentinaUruguay

ThailandChile

Greece

United KingdomSpain

United States France

South Korea

HighLow Performance(ii)

Net

en

rollm

ent

at a

ge 1

5, %

Latin American countries(i) Other countries(i)

% of GDP

Source: McKinsey & Company

Latin America’s N-Gen norms Many of Latin America’s N-Gen norms are quite similar to those in North America, with more subtle differences than found in India or China.

Pay Of course, in stagnant economies where people feel poorer than the previous generation, pay matters. What is interesting to note is that even among wealthy elites the primary motivation for high pay is to write down debilitating student loans. As one N-Gener puts it, “Our generation is becoming poorer and we cannot afford as much as our parents when they were starting out. That’s why people stay longer at their parents’ home, often into their 30s.”133

The opportunity: many students start working before they finish school to earn money and get practical experience. Companies that employ students buy themselves some loyalty as the cohort graduates.

Customization This is the highest-ranked norm for the N-Gen in Brazil and Mexico.134 Just like their North American counterparts, Latin Americans want a say in their job responsibilities. The slight difference is in their perhaps more reasonable sense of entitlement. The North American N-Gen is infamous for its overconfidence: many employees believe they should be listened to from the first days on the job.135 By contrast, Latin Americans share the sense with other rising-economy N-Geners that they need to earn this right through good work and demonstrated ability.136 Being able to give input into one’s job description is an accomplishment, a statement of the regard in which an employee is held.



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Innovation Innovation is the second-highest ranked norm for both Mexico and Brazil.137 As in India, the ability to innovate is associated with working for a large and prestigious firm. Generally Latin America scores poorly on investment in R&D (Figure 10).138

Figure 10: R&D Spending

Country Expenditure on R&D

as % of GDP (2002-2003)

Brazil 1.0%

Argentina 0.4%

Mexico 0.4%

Chile 0.6%

OECD Average 2.3%

Source: UNESCO Institute for Statistics

Most of the R&D spending in Latin America is by universities and other public institutions.139 By contrast, spending in the OECD is above 2 percent of GDP, and is mostly done by industry.

As a result, almost 50 percent of both Brazilians and Mexicans want to work for a large or very large organization, compared to just over 15 percent of North Americans.140 From our interviews, the bias is towards companies with international scope—which generally means multinationals headquartered elsewhere (Brazil’s recent successes notwithstanding).

Collaboration This is the third-most important norm in Brazil and Mexico, ranking 50 and 65 percentage points higher than in North America respectively.141 In the Latin American context, collaboration revolves around cooperation and a social atmosphere in the workplace. N-Geners in Latin America value this highly: “For many people it’s really important to be in an environment where they feel comfortable. If you don’t agree with the company’s culture, you would eventually probably leave.”142

Social interaction and collaboration are closely linked. Eighty percent of Brazilian and 92 percent of Mexican N-Geners report having a good friend at work, compared to 50 percent in North America.143

Entertainment Entertainment at work is one of the weakest norms in Latin America.144 Prevailing attitudes dictate that work is done in a professional manner although in a social and collaborative atmosphere. Latin Americans make a clear distinction between work and entertainment.

Freedom

For Latin American N-Geners, as for those in North America, work/life balance is important. “For many people it is important to balance their work and personal life. If they are established in a certain city with family and friends they are reluctant to move.”145 OECD estimates that Latin Americans work similar or



28

fewer hours than North Americans.146 As a result, Brazil was the only country in our sample to voice interest in flexible hours or telecommuting.

Successful N-Ployment strategies Given the high unemployment rate among even well-qualified N-Geners, talent management is not as challenging in Latin America as in India or China. A lot of successful North American employment strategies work well in Latin America, with a couple of adjustments or additions:

1. Play up international credentials. Position your firm as a large, global player that is on the cutting edge of innovation. One N-Gener notes, “Companies who are considered ‘boring’ and not innovative have a tough time recruiting good candidates.”147 Another concurs, “Working for large multinational companies will give you status and recognition, and will look good on your resume. Those are very important factors.”148

2. Offer full- and part-time work terms and internships to students that give them on-the-job training. Give young workers responsibility early on and let them work on innovative projects.

3. Sidestep the weak secondary education system by providing scholarships or sponsoring schools. In addition to being socially responsible this will increase the supply of available talent. An example of this is Embraer’s Juarez Wanderley school. The aircraft manufacturer established a high school to give impoverished but bright children a chance to get a good education. The three-year program admits 200 students who compete for spots through demanding exams. The school is ranked among the top 15 in Brazil (including public and private). The school focuses on technical subjects for the 40 percent of students who are interested in studying engineering in college, possibly training the next cadre of Embraer’s engineers.149

4. Unlike in India and China, there is very little to be gained by going to second- or third-tier cities; almost none of the talent is available there. However, it can be valuable to use innovative tactics to help employees deal with congestion and travel time in large cities or to locate outside of overcrowded areas. As one N-Gener points out, “Very few people from outside Mexico City would be willing to go and live there. It’s very unsafe, expensive, and dirty. Most people prefer to work in other cities.”150

Popular strategies include telecommuting and flexible work hours. Use work-extending technologies, such as laptops and wireless email. This has become the norm for N-Geners: “More and more companies allow you to choose your hours and if you need to take a day off work you can make it up or work around your vacation. It’s becoming more important.”151

5. Use temporary contracts and seasonal or part-time workers to avoid hiring full-time staff. This helps avoid many of the expenses and legislation associated with full-time employment in Latin America. It also caters to the N-Gen norms of freedom, customization, and speed as it allows young people to change jobs quickly and learn new skills with a variety of employers.

Beyond Best Practice: Global Talent Relationship Management As we have profiled each of the rising-economy regions in this paper, we have highlighted local best practices and explained how they cater to the regional expressions of the global N-Gen norms. These best practices are informative, but we recommend that companies innovate beyond them, because they are unlikely to suffice in the changing circumstances of the rising economies. In China and India, conditions are changing so rapidly that today’s best practices are simply a baseline standard tomorrow. And in Latin America and Eastern Europe, the N-Gen talent pool is woefully underdeveloped; companies that move



29

beyond today’s best practices gain the opportunity to realize significantly greater returns from their investments in training tomorrow’s talent.

With the opportunity to set a new bar for the world’s best employers in mind, we propose the following revolutionary practices in N-Gen talent relationship management. We divide our proposals following the “Initiate, Engage, Evolve” framework introduced in Don Tapscott and Robert Barnard’s paper “Talent 2.0: The Net Generation and the World of Work.”152

Perhaps the most important message is to engage the N-Gen in designing and following-through on your talent management proposition, offering, and process. We have stressed throughout this paper that although the N-Gen norms are found globally, each country’s expression of those norms can differ—and simply imposing North American expectations on rising economies can be counter-productive. The same is true even within a single economy: each company will have its own unique ideal “market segment” among N-Gen employees (defined by skills, culture, and location); your company’s market segment will have its own flavor of N-Gen norms. The single strongest way to ensure that your local talent management strategy matches the interests of your best employees is to involve those employees directly in the strategy and its execution.

Initiate In the “initiate” stage, employers seek to identify, attract, and hire the best talent, using a relational model that treats the hiring process as a 2-way matching exercise. Key recommendations for this stage include:

1. Use technology, especially mobile phones. Although Internet penetration rates in rising economies are generally lower than in North America, the most attractive N-Gen candidates are already technologically savvy. Do not hesitate to use the Internet extensively to present your company, seek strong candidates, and conduct the hiring process. Doing so effectively will serve not only to increase speed and reduce cost, it will also dramatically increase the perceived innovation and strength of your company relative to other employers.

Given the huge scale of most companies’ recruiting efforts in India and China (due both to growth and to turnover), this point deserves special attention: technology that can harness the power of N-Gen relationships can dramatically simplify the recruiting process, and simultaneously improve the quality of recruits.

Remember that N-Geners in rising economies are much more likely to access the Web through their cell phones than through PCs or laptops. Design your recruiting technology face with that in mind. Beyond the usual “send this page to a friend” link on your recruiting Web site, offer a chance to talk live with an existing employee. And give candidates the chance to forward information by SMS or text message, not just email. All of these suggestions help N-Geners work with your company in their technology medium of choice.

2. Engage the N-Gen network. The N-Gen is arguably the most relationship-driven generation in history. Successful employers will take advantage of those relationships at every stage of the employee lifecycle. Here are some specific suggestions:

» Present an N-Gen face. Have N-Gen employees in your company design your recruitment Web site and related functions. Include authentic N-Gen blogs by employees, without censoring challenging or “unorthodox” material, to engage candidates’ interest. Consider designing a Hiring FAQ page in the form of a wiki, edited freely by your own staff and with room for comments by outsiders. Engage staff in answering candidates’ questions live, and pair them up with accepted candidates, so they can probe and encourage those candidates. These ideas will



30

be even more radical in rising economies than in North America, but they bring a strong opportunity to leapfrog traditional concepts at the same time.

» Stimulate N-Gen network connections. Ask applicants to name at least 2 current or former employees of your company as references. Then, automate the process so that these employees get asked for input about the applicant via email or a Web page. If that input is in the form of a wiki, you give your own employees the chance to calibrate their references transparently before you see them. If an employee does not provide feedback on a candidate within 72 hours, you can pretty much assume that she has nothing positive to say. In contrast, if an employee takes the time to comment on an outside candidate (for better or worse), offer a meaningful reward—but don’t make it dependent on a successful hire. This form of automation in the hiring process is especially valuable in countries such as India or China, where multinationals need to hire astounding numbers just to keep up with rates of attrition, let alone with growth. It also takes advantage of the value attributed to personal networks in many rising economies.

» Involve N-Geners across the company. Don’t restrict recruiting activities to HR employees! At all successful companies, talent management comprises a little bit of everybody’s job.

3. Make the process quick. Given the huge hiring needs of most companies, especially in China or India, it can be better to design a process that provides fast thumbs-up/thumbs-down decisions, rather than trying to optimize between all the candidates you get or may hope to get in a recruiting round. Occasionally, you will find yourself wondering whether to accept a late candidate whose credentials are fantastic, despite having already filled your quotas; but more often, you will be struggling to find enough good candidates, just as you are today.

Remember also that the recruitment process is not over until an employee has shown up for her first day of work, and arguably the first week. The faster the cycle, the less likely you are tolose the employee before you have even issued a paycheque.

Engage and evolve In the “engage” and “evolve” stages, employers seek to develop their relationship with employees for increasing mutual benefit.

1. Engage employees in corporate strategy and policies. Follow Infosys’ Voice of Youth council example. The benefits are legion: energy and dynamism contributed to executive committee meetings; growth and mentorship for your highest young performers; and a forum of inspiration (and a sounding board) for all your other N-Gen employees too. Given the young average age of most successful rising-economy companies, a Voice of Youth can really be a very strong representation of most of the company.

2. Train employees aggressively. In almost every country in the world, and certainly in the main rising economies, it pays to recruit from second- and third-tier cities and schools, and then to train employees intensively throughout their careers. Initial training programs of 3 to 9 months are not unheard of, but it is important to develop the right content with a focus on soft skills such as communication and teamwork. In addition, the very best employers will put significant attention on ongoing training, especially management training. For all companies with large N-Gen staff complements, this is likely to be a weak area.

3. Pave the way for women. In most rising economies, women are an undervalued, yet highly productive, part of the N-Gen workforce. Although family norms may ask them to come home, get married, and raise children, women do not “check their brains” in the delivery room. In most rising



31

economies, N-Gen women have been raised and educated to perform as well or better than their male peers. Investing in satellite offices, telecommuting and daycare, though seemingly unnecessary today, will provide a growing, capable and loyal workforce. What’s more, with home broadband increasingly available at low cost, the technical infrastructure is very much becoming a non-issue.

4. Continue to mine your alumni for referrals. N-Gen alumni expect to remain connected to their earlier employers—this common practice from the consulting industry is increasingly well-known and appreciated. Offer the same process and rewards for alumni as you do for employees, and you will be rewarded with recommendations and referrals for years after an employee has left your direct care. Again, this is especially valuable in environments such as India and China where people expect to change jobs often, and where personal networks are considered valuable assets to be nurtured.

Many of the recommendations in this paper, especially those beyond best practice, require employers to fully embrace the N-Gen world—including its speed, transparency, and relationship-focus. This can be a scary proposition, but one well worth the rewards.

The rising economies offer an unprecedented bounty of talent that will not only work for tomorrow’s global corporations, but will increasingly shape and direct the most successful corporations, wherever their nominal headquarters. Engaging the N-Gen’s most positive norms will help your company adapt itself for the future, faster and more productively than most of your peers.



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Appendix 1: Country Demographics N.B. The following figures are sourced from the U.S. Census Bureau, International Database.

United States population statistics, 2005

0 2 4 6 8 10 12

85+80-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-12 -10 -8 -6 -4 -2 0

Population (in millions)

Male Female

India population statistics, 2005

0 10 20 30 40 50 60 70

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-70 -60 -50 -40 -30 -20 -10 0


Male Female



33

China population statistics, 2005

0 10 20 30 40 50 60 70

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-70 -60 -50 -40 -30 -20 -10 0


Male Female

Brazil population statistics, 2005

0 2 4 6 8 10

80+75-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-10 -8 -6 -4 -2 0


Male Female

Argentina population statistics, 2005

0.0 0.5 1.0 1.5 2.0

80+75-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-2.0 -1.5 -1.0 -0.5 0.0


Male Female



34

Mexico population statistics, 2005

0 1 2 3 4 5 6

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-6 -5 -4 -3 -2 -1 0


Male Female

Chile population statistics, 2005

0.0 0.2 0.4 0.6 0.8 1.0

80+75-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-1.0 -0.8 -0.6 -0.4 -0.2 0.0


Male Female

Russia population statistics, 2005

0 1 2 3 4 5 6 7

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-7 -6 -5 -4 -3 -2 -1 0


Male Female



35

Poland population statistics, 2005

0.0 0.5 1.0 1.5 2.0

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-2.0 -1.5 -1.0 -0.5 0.0


Male Female

Hungary population statistics, 2005

0 100 200 300 400 500

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

-500 -400 -300 -200 -100 0

Population (in thousands)

Male Female



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Appendix 2: Select Results from New Paradigm’s Global Survey Norms India China Mexico Brazil Russia N.Am W.Eu Rising WorldInnovation 82% 80% 92% 79% 74% 72% 67% 81% 79%Customization 77% 77% 94% 79% 81% 50% 57% 78% 74%Entertainment 68% 80% 84% 56% 91% 68% 71% 74% 73%Freedom 75% 73% 83% 69% 67% 70% 63% 74% 72%Scrutiny 75% 70% 84% 75% 74% 54% 53% 73% 70%Collaboration 71% 63% 91% 77% 31% 26% 40% 67% 62%Integrity 65% 65% 93% 77% 46% 51% 41% 66% 63%Speed 62% 25% 42% 53% 38% 33% 37% 44% 42%

Which do you want to do? India China Mexico Brazil Russia N.Am W.Eu Rising WorldWork for one or two companies 55% 62% 62% 65% 75% 72% 65% 60% 61%Work for a variety of companies 45% 38% 38% 35% 25% 28% 35% 40% 39%

I agree/strongly agree with the following: India China Mexico Brazil Russia N.Am W.Eu Rising WorldAt work, I can get the info I need to do my job quickly 77% 76% 91% 80% 72% 60% 56% 77% 74%I need to do a variety of things at work/not too much routine 75% 77% 90% 78% 75% 46% 63% 76% 72%I have a really good friend at work 78% 72% 93% 79% 50% 51% 50% 75% 71%I have enough flexibility in my work schedule... 74% 75% 91% 75% 47% 55% 53% 74% 71%I receive enough recognition for doing good work 75% 70% 90% 76% 56% 45% 41% 73% 68%I receive explicit feedback when things don't go well 71% 65% 87% 61% 66% 45% 49% 68% 64%I will take the lead to discuss professional development... 78% 59% 90% 54% 61% 51% 50% 68% 64%I have good opportunities for career advancement 76% 55% 91% 77% 62% 41% 43% 67% 63%I am satisfied with my current work experience 72% 53% 90% 75% 57% 50% 48% 64% 62%

Who is your ideal employer? India China Mexico Brazil Russia N.Am W.Eu Rising WorldFor-profit company 62% 65% 82% 71% 69% 55% 46% 65% 64%Government 24% 25% 14% 23% 16% 20% 33% 23% 23%Non-profit organization 14% 10% 4% 6% 15% 25% 21% 12% 13%

If you could work anywhere, where would you work India China Mexico Brazil Russia N.Am W.Eu Rising WorldFor yourself 24% 33% 12% 21% 35% 36% 36% 28% 29%At a medium-sized organization... 28% 22% 25% 13% 14% 18% 13% 23% 22%At a large organization... 22% 18% 43% 30% 12% 9% 8% 21% 20%At one of the largest organizations... 14% 17% 5% 18% 13% 7% 12% 15% 14%At a small organization... 12% 11% 16% 18% 26% 30% 31% 13% 15%

I agree/strongly agree that the following is important in an employer: India China Mexico Brazil Russia N.Am W.Eu Rising WorldHow much I am paid 89% 84% 89% 83% 82% 82% 79% 86% 85%The prestige of the company 83% 88% 89% 81% 72% 51% 56% 85% 80%Having technologies in the workplace... 87% 82% 88% 83% 88% 72% 69% 85% 82%The ability to work on international projects 84% 70% 86% 80% 71% 30% 48% 77% 71%Having a mentor that looks out for me 72% 79% 86% 77% 54% 59% 45% 75% 72%International travel 81% 60% 88% 80% 60% 32% 42% 71% 66%Being able to work in a variety of jobs for same employer 79% 61% 88% 77% 38% 57% 61% 70% 68%

N-Gen Population India China Mexico Brazil Russia N.Am W.Eu Rising World419 424 41 68 41 93 58 992 1,171

Note: Regional percentages are weighted averages based on countries' N-Gen populations Source: U.S. Census Bureau, International Database; New Paradigm



DEEPAK RAMACHANDRAN has been an independent consultant since 1999, with a focus on strategy and cross-border mergers and acquisitions. In recent years he has served as director of strategy for Celestica Power Systems, a $100 million division that was recently sold to C&D Technologies, Inc. Deepak contributed extensively to Digital 4Sight’s Hypernet research program. His experience also includes a number of cross-border mergers and alliances as a consultant with McKinsey and Company. He has degrees from the University of Toronto and the University of Oxford.

PAUL ARTIUCH is a senior research analyst and associate director of member services at New Paradigm. Paul’s most recent experience includes research into external innovation, idea markets, collaboration tools as well as global talent markets. He has authored and co-authored a number of New Paradigm white papers and case studies dealing with the impact of technology and demographics on business models. Paul has written and published cases for the Richard Ivey School of Business in the area of marketing, strategy and entrepreneurship. He also has consulting experience in the retail, consumer packaged goods, manufacturing and non-profit sectors. Paul holds a degree from the Richard Ivey School of Business.

Endnotes

1 Janet Hardy and Bill Gillies, “Attracting and Engaging the N-Gen Employee” New Paradigm White Paper, Net Generation, June 2007. 2 RHR International quoted in “The Battle for Brainpower,” The Economist, October 5, 2006, www.economist.com/surveys/displayStory.cfm?story_id=7961894. 3 For instance, Ogilvy’s Brian Fetherstonhaugh, CEO of OgilvyOne, remembers every day that he needs to hire 5,296 people in the next three years to maintain his growth goals. Quote from the Net Generation Strategic Investigation Member Meeting, New Paradigm, March 20, 2007. 4 “The Battle for Brainpower,” The Economist, October 5, 2006, www.economist.com/surveys/displayStory.cfm?story_id=7961894. 5 Ibid. 6 Ibid. 7 “Evolution of Student Interest in Science and Technology Studies Policy Report,” Organization for Economic Co-operation and Development Global Science Forum, May 4, 2006, www.oecd.org/dataoecd/16/30/36645825.pdf. 8 http://www.kauffman.org/pdf/thursby_final_1206.pdf. 9 “The Emerging Global Labor Market: Part I—The Demand for Offshore Talent in Services,” McKinsey Global Institute, June 2005, www.mckinsey.com/mgi/reports/pdfs/emerginggloballabormarket/Part1/MGI_demand_executivesummary.pdf. 10 Ibid. 11 “The world is your oyster,” The Economist, October 5, 2006, www.economist.com/surveys/displaystory.cfm?story_id=7961950. 12 Interview with Anita Tang (25), HR consultant in Hong Kong, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 13 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 14 Wikipedia search on “English Language,” http://en.wikipedia.org/wiki/English_language.

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15 Mexico’s industrial “free trade” areas at the U.S. border, called maquilladoras, have been famous over more than 20 years for very high employee turnover, and therefore low product quality. 16 “The world is your oyster,” The Economist, October 5, 2006, www.economist.com/surveys/displaystory.cfm?story_id=7961950. 17 Interview with Smruti Devanahalli, Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 18 Anand Giridharadas, “In India’s higher education, few prizes for 2nd place,” International Herald Tribune, November 26, 2006, www.iht.com/articles/2006/11/26/news/india.php?page=1. 19 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 20 Eva Kolenko, “Parental Consent,” Fast Company, December 2006/January 2007, www.fastcompany.com/magazine/111/next-dispatch.html. 21 Anonymous interview with an HR manager in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 22 Eva Kolenko, “Parental Consent,” Fast Company, December 2006/January 2007, www.fastcompany.com/magazine/111/next-dispatch.html. 23 Raja Simhan, “Refer candidates and get rewarded at IT companies,” The Hindu Business Line, Sepember 24, 2003, www.blonnet.com/2003/09/24/stories/2003092402690100.htm, and Mary Weier, “Tata and Infosys set the Bar: 15 percent Raises this year in India,” InformationWeek, April 21, 2007, www.informationweek.com/news/showArticle.jhtml?articleID=199200211. 24 “The ‘Bird of Gold’: The Rise of India’s Consumer Market,” McKinsey Global Institute, May 2007. 25 Anonymous interview with an HR manager in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 26 Interview with senior executives at Infosys (anonymous), Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 27 Many of India’s prestigious programs reserve the majority of positions for lower castes in attempts to level the socio-economic playing field. However, this means that N-Geners from high castes need to score comparatively higher on exams than their lower caste peers in order to gain acceptance to such institutions. 28 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 29 Interview with senior executives at Infosys (anonymous), Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 30 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 31 Interview with Pallavi Bali (23), media professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 32 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 33 “The Infosys Campus,” rediff.com, http://specials.rediff.com/money/2004/aug/05sld1.htm. 34 Anand Giridharadas, “In India’s higher education, few prizes for 2nd place,” International Herald Tribune, November 26, 2006, www.iht.com/articles/2006/11/26/news/india.php?page=1. 35 Interview with Prathibha Sharan, communications and teamwork trainer, Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 36 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 37 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 38 Ibid. 39 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007.

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40 For more detail on NPTC, see “Human Resource Management Practices at the National Thermal Power Corporation (NTPC) in India,” ICFAI Center for Management Research, 2005. 41 www.ntpc.co.in/home/index.shtml. 42 www.pmintpc.com/. 43 “The world is your oyster,” The Economist, October 5, 2006, www.economist.com/surveys/displaystory.cfm?story_id=7961950. 44 Interview with senior executives at Infosys (anonymous), Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 45 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 46 Josey Puliyenthuruthel, “The Other MIT,” BusinessWeek, August 22, 2005, www.businessweek.com/magazine/content/05_34/b3948482.htm. 47 Andy Mukherjee, “Commentary: Even India needs to widen its software talent pool,” Bloomberg News, January 26, 2005, www.iht.com/articles/2005/01/25/bloomberg/sxmuk.php. 48 “Managing Attrition in the Indian Information Technology Industry,” ICFAI Center for Management Research, 2005. 49 www.pmintpc.com/. 50 Interview with senior executives at Infosys (anonymous), Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 51 “Top cos turn training schools,” The Times of India, December 18, 2006, http://timesofindia.indiatimes.com/NEWS/India_Business/Top_cos_turn_training_schools/articleshow/828373.cms. 52 Raghu Garud and Arun Kumaraswanny, “Infosys: Architecture of a Scalable Corporation,” NYU Stern School of Business, August 13, 2003, www.infosys.com/about/cases/RGInfosys-case-August2003 percent20final.pdf. 53 Priyanka Bhattacharya, “Meeting The Demand Supply Gap,” BPO Times, June 20, 2007, www.bpotimes.com/efytimes/fullnewsbpo.asp?edid=16499. 54 Janet Hardy and Bill Gillies, “Attracting and Engaging the N-Gen Employee,” New Paradigm White Paper, Net Generation, June 2007. 55 Interview with senior executives at Infosys (anonymous), Bangalore, conducted by Deepak Ramachandran, New Paradigm, June 2, 2007. 56 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 57 Tuhina Pandey, “IT firms preferring women employees,” NDTV Profit, April 9, 2007, www.ndtvprofit.com/homepage/storybusinessnew.asp?id=37471&template=. 58 Tejaswi Rathore and Rahul Sachitanand, “Winning Them Over, Engine for Growth, Help, Tarun!” Business Today, June 4, 2007, www.tmcnet.com/usubmit/2007/06/04/2686407.htm. 59 Interview with Aditi Bakht (23), HR professional in Delhi, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 23, 2007. 60 Diana Farrell, and Andrew Grant, “Addressing China’s Looming Talent Shortage,” McKinsey Global Institute, October 2005, www.mckinsey.com/mgi/reports/pdfs/China_talent/ChinaPerspective.pdf. 61 Ibid. 62 Ibid. 63 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 64 Interview with Anita Tang (25), HR consultant in Hong Kong, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 65 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 66 “The Hudson Report: Employment and HR Trends in China,” Hudson, January-March 2007.

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67 Interview with Anita Tang (25), HR consultant in Hong Kong, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 68 “The Hudson Report: Employment and HR Trends in China,” Hudson, January-March 2007. 69 Interview with Anita Tang (25), HR consultant in Hong Kong, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 70 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 71 “The Hudson Report: Employment and HR Trends in China,” Hudson, January-March 2007. 72 Material for this sidebar was collected from the SZHR Web site, www.szhr.com.cn, translated from Chinese by New Paradigm staff, and interviews with users of the service. 73 David Ticoll and Darren Meister, “Hon Hai: Winning by Design,” New Paradigm, June 2005. 74 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 75 Ibid. 76 Diana Farrell and Andrew Grant, “Addressing China’s Looming Talent Shortage,” McKinsey Global Institute, October 2005, www.mckinsey.com/mgi/reports/pdfs/China_talent/ChinaPerspective.pdf. 77 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 78 David Ticoll and Phil Hood, “Process Networks: Self-Organization and Open Innovation in the Chinese Motorcycle Industry,” New Paradigm, March 2006. 79 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 80 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 81 Ibid. 82 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 83 Ibid. 84 David Lague, “Chinese paradox: A shallow pool of talent,” International Herald Tribune, April 25, 2006, www.iht.com/articles/2006/04/24/news/talent.php. 85 “Country Briefings: Philippines and Thailand,” The Economist, www.economist.com/countries/Philippines/profile.cfm?folder=Profile-FactSheet. 86 “The Emerging Global Labor Market: Part II—The Supply of Offshore Talent in Services,” McKinsey Global Institute, June 2005, www.mckinsey.com/mgi/reports/pdfs/emerginggloballabormarket/Part2/MGI_supply_executivesummary.pdf. 87 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 88 Kelly Proctor and Qiu Tina, “With boom, China faces work force shortages,” Bloomberg News, August 15, 2006, www.iht.com/articles/2006/08/15/bloomberg/sxoutsource.php. 89 Interview with Raymond Ling (25), manager at Fookwah in Shenzhen, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 14, 2007. 90 Ibid. 91 Interview with Anita Tang (25), HR consultant in Hong Kong, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 92 Ian Marriot, Gartner, quoted in “Bad Image Hurts Russian IT Outsourcing,” BusinessWeek, February 16, 2007, www.businessweek.com/globalbiz/content/feb2007/gb20070216_283171.htm?chan=search. 93 Steve Chase of Intel, quotes in “A Renaissance For Russian Science,” BusinessWeek. Aug 9, 2004. http://www.businessweek.com/magazine/content/04_32/b3895103_mz018.htm 94 “The Hi-Tech Game,” Kommersant, February 17, 2005, www.kommersant.com/p546996/The_Hi-Tech_Game. 95 “A Renaissance For Russian Science,” BusinessWeek, August 9, 2004, www.businessweek.com/magazine/content/04_32/b3895103_mz018.htm.

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96 Dmitry Polikanov, “Staying at Home,” Russia Profile.org, April 13, 2006, www.russiaprofile.org/page.php?pageid=Themes&cont=Youth+ percent28Issue+3 percent2C+April+2006 percent29&articleid=596. 97 Svetlana Kolchik, “The Dom Perignon Generation,” Russia Profile.org, May 5, 2006, www.russiaprofile.org/page.php?pageid=Themes&cont=Youth+ percent28Issue+3 percent2C+April+2006 percent29&articleid=2372. 98 Dmitry Polikanov, “Russia’s Youth: Myths and Reality,” Russia Profile.org. April 5, 2006, www.russiaprofile.org/page.php?pageid=Themes&cont=Youth+ percent28Issue+3 percent2C+April+2006 percent29&articleid=3807. 99 Interview with Edith Balazs (32), wire service analyst in Budapest, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 26, 2007. 100 Nataliia Zorkaia and Nadia Diuk, “The Values and Attitudes of Russia’s Young People,” Russian Education and Society, June 2005, http://eric.ed.gov/ERICWebPortal/custom/portlets/recordDetails/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=EJ695705&ERICExtSearch_SearchType_0=eric_accno&accno=EJ695705. 101 Peter Gumbel, “The New Land of Opportunity,” TIME, April 9, 2006, www.time.com/time/magazine/article/0,9171,901060417-1181588,00.html. 102 “A sickness of the soul,” The Economist, September 7, 2006, www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=549352&story_id=7891259. 103 Svetlana Kolchik, “The Dom Perignon Generation,” Russia Profile.org, May 5, 2006, www.russiaprofile.org/page.php?pageid=Themes&cont=Youth+ percent28Issue+3 percent2C+April+2006 percent29&articleid=2372. 104 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 105 Interview with Edith Balazs (32), wire service analyst in Budapest, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, Apr 26, 2007. 106 Interview with Vitaly Gritsenko, CEO of F-Key Solutions, Inc., with employees in Russia, conducted by Deepak Ramachandran, New Paradigm, June 13, 2007. 107 Ibid. 108 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 109 Interview with Vitaly Gritsenko, CEO of F-Key Solutions, Inc., with employees in Russia, conducted by Deepak Ramachandran, New Paradigm, June 13, 2007. 110 Dmitry Polikanov, “Russia’s Youth: Myths and Reality,” Russia Profile.org, April 5, 2006, www.russiaprofile.org/page.php?pageid=Themes&cont=Youth+ percent28Issue+3 percent2C+April+2006 percent29&articleid=3807. 111 “The reluctant briber,” The Economist, November 2, 2006, www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=549352&story_id=8108205. 112 Peter Gumbel, “The New Land of Opportunity,” TIME, April 9, 2006, www.time.com/time/magazine/article/0,9171,901060417-1181588,00.html. 113 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 114 William Kole, “As wage rise in Eastern Europe, businesses look elsewhere,” The Associated Press, April 4, 2007, www.iht.com/articles/2007/04/04/business/east.php. 115 “Russia’s Regions: Goals, Challenges, and Achievements,” United Nations Development Programme, May 15, 2007, www.undp.ru/index.phtml?iso=RU&lid=1&cmd=publications1&id=48. 116 “The Emerging Global Labor Market: Part II—The Supply of Offshore Talent in Services,” McKinsey Global Institute, June 2005, www.mckinsey.com/mgi/reports/pdfs/emerginggloballabormarket/Part2/MGI_supply_executivesummary.pdf. 117 Interview with Vitaly Gritsenko, CEO of F-Key Solutions, Inc., with employees in Russia, conducted by Deepak Ramachandran, New Paradigm, June 13, 2007.

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118 “A Renaissance For Russian Science,” BusinessWeek, August 9, 2004, www.businessweek.com/magazine/content/04_32/b3895103_mz018.htm. 119 Sanjukta Mukherjee, “Comparing Russia and India: Education and the Development of the Technology Sector,” Russia Profile.org, May 22, 2007, www.russiaprofile.org/page.php?pageid=Business&articleid=a1179811894. 120 Interview with Vitaly Gritsenko, CEO of F-Key Solutions, Inc., with employees in Russia, conducted by Deepak Ramachandran, New Paradigm, June 13, 2007. 121 Ibid. 122 Interview with Pawel Lewandowski (25), finance professional in London, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, May 7, 2007. 123 Mikhail Grachev, Nikolai Rogovsky, and Mariya Bobina, “3M: Role Model for Emerging Markets,” Thunderbird International Business Review, November-December 2006. 124 Interview with Edith Balazs (32), wire service analyst in Budapest, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 26, 2007. 125 Victoria Petrova, of Rusal, quoted in “HR’s shining tsar,” Personnel Today, August 30, 2005. 126 “The blessings of stability,” The Economist, April 12, 2007, www.economist.com/surveys/displaystory.cfm?story_id=8952520. 127 Mark Weisbrot, “Latin America’s Stunted Growth,” BusinessWeek, June 15, 2004, www.businessweek.com/bwdaily/dnflash/jun2004/nf20040615_8558_db046.htm. 128 “Heavy going,” The Economist, April 12, 2007, www.economist.com/surveys/displaystory.cfm?story_id=8952533. 129 Diana Farrell and Jaana Remes, “Tapping Latin America’s potential in services,” The McKinsey Quarterly, June 19, 2007, www.mckinseyquarterly.com/article_page.aspx?ar=1968. 130 Roberto Fantoni, “Checking Latin America’s vital signs,” The McKinsey Quarterly, June 19, 2007, www.mckinseyquarterly.com/article_page.aspx?ar=1953. 131 “Low marks,” The Economist, April 12, 2007, www.economist.com/surveys/displaystory.cfm?story_id=8952561. 132 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 133 Ibid. 134 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 135 Nadira Hira, “Attracting the twentysomething worker,” Fortune, May 15, 2007, http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100033934/. 136 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 137 Global N-Gen survey conducted by New Paradigm and Crux Research, June 2007. 138 UNESCO Institute for Statistics. See: www.uis.unesco.org/ev_en.php?ID=2867_201&ID2=DO_TOPIC. 139 “The economy of heat,” The Economist, April 12, 2007, www.economist.com/surveys/displaystory.cfm?story_id=8952496. 140 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 141 Ibid. 142 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 143 New Paradigm Study of the N-Gen, n=1,750, 13-20 year olds in the U.S. and Canada, 2006 and 2007. 144 Ibid. 145 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 146 See OECD statistics: www.oecd.org/statsportal/0,3352,en_2825_293564_1_1_1_1_1,00.html.

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147 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 148 Interview with Monica Aguilar (25), manager in Chihuahua, conducted by Paul Artiuch, New Paradigm, May 23, 2007. 149 Geri Smith, “Embraer Helps to Educate Brazil,” BusinessWeek, July 31, 2006, www.businessweek.com/magazine/content/06_31/b3995013.htm?chan=search. 150 Interview with Monica Aguilar (25), manager in Chihuahua, conducted by Paul Artiuch, New Paradigm, May 23, 2007. 151 Interview with Samia Cury (25), project manager in Sao Paulo, conducted by Deepak Ramachandran and Paul Artiuch, New Paradigm, April 25, 2007. 152 Don Tapscott, Robert Barnard, and Samir Khan, “Talent 2.0: The Net Generation and the World of Work,” New Paradigm White Paper, Net Generation, October 2006.

© 2007 New Paradigm Learning Corporation. Reproduction by any means or disclosure to parties who are not employees of NetGeneration: Strategic Investigation member organizations or wholly-owned subsidiaries is prohibited.

This report is an analysis of a Big Idea, presented as part of New Paradigm's Net Generation: Strategic Investigation Program. The program, sponsored by leading companies such as yours, is investigating the impact of the Net Generation in the marketplaceand the workplace.

The Net Generation: Strategic Investigation research program membership includes unlimited free access to asecure web site where the research team project plans and research publications are posted for member reviewand feedback. Please visit www.newparadigm.com for information. For more information, please contact Joan Bigham at [email protected] or (860) 536-6693.

Don Tapscott: Chief ExecutiveJoan Bigham: Executive Vice President, Strategy and Business DevelopmentMike Dover: Vice President, Syndicated ResearchAnthony Williams: Vice President and Executive EditorJohn Geraci: Program Manager, Net Gen Global Investigation

To an N-Gener, choice is like oxygen. With the proliferation of media, sales channels, product types, and brands,N-Geners leverage technology to cut through the clutter and find the products that fit their needs. They expect tochoose where and when they work; to be able to use technology to escape traditional office space and hours; and tointegrate their home and social lives with their work lives.

N-Geners have grown up using media they can customize. With their own blogs and Web sites, personalized cellphones, TiVo, Slingbox, and podcasts, they get the media and information they want, when and where they want it,and alter it to fit their unique needs and desires. They want to be able to customize their workplace—doing thingslike helping improve work processes and having input into their own job descriptions.

They are the new scrutinizers. Older generations marvel at the consumer research available on the Internet: N-Geners expect it, and as they grow older, their online engagement increases. N-Geners know that their marketpower allows them to demand more of companies. As employees they demand trusting and transparent relationshipswith the companies they work for.

When deciding what to buy and where to work, they look for corporate integrity and openness. Whether they areexposing a flawed viral marketing campaign or researching a future employer, N-Geners make sure a company'svalues align with their own.

Unlike their TV generation parents, N-Geners interact with media and with others through media. They collaborateonline in chat groups, play multi-user video games, use email and share files for school, work, or just for fun. Theyinfluence each other through "N-Fluence Networks," where among other things, they discuss brands, companies,products and services. Marketers must recognize that there is more to the consumer relationship than brand recognition.Having grown up being authorities on something important, they have a different view of authority in the workplace.

N-Geners want their work, education, and social life to be fun and entertaining. They bring a playful attitude to work—they know that there's always more than one way to achieve a goal, just like in the latest video game. They seekentertaining experiences in products and services. Workplaces must be fun—as work, learning, collaboration andentertainment are for the first time inseparable.

N-Geners need speed—and not just in video games. In a world where information flows rapidly among vast networksof people, communication with friends, colleagues, and bosses takes place faster than ever. Marketers and employersshould realize that N-Geners expect the same quick communication in return—every instant message should drawan instant response. N-Geners are speeding up the metabolism of business—for the good.

For N-Geners, digital tools have encouraged and facilitated innovation in all aspects of their lives. Marketers reach them in increasingly creative ways, while N-Gen business leaders have literally changed entire industries. Their needto innovate challenges established norms, some of which will need to be adapted, and some to which N-Gen willneed to adapt.

The 8 Norms of the Net GenerationNew Paradigm has identified certain normative attitudes and behaviors endemic to the N-Gen, which differentiate them from previous generations. These norms have become part of the vernacular of marketing.Freedom

Customization

Scrutinizers

Integrity

Collaboration

Entertainment

Speed

Innovation


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