Foreword

India’s biggest advantage in the coming years is going to be its people. Today, India stands out as one of the youngest nations in the world, and is likely to emerge as one of the leading economies of the world in the next decade. However, this change will not be automatic. A lot depends on how much and how well the country’s human capital is put to use. Mere numbers cannot give us an advantage, but when these numbers are converted into talent that is relevant and productive, it can change the economy fundamentally. The very people who could be an asset could also become a liability if they are not equipped with skills.

For several years, the Indian corporate sector has been using the concept of ‘cost to company’ (CTC) by computing the total expenditure incurred by the company directly (salaries, incentives, dearness allowance, house rent allowance, city compensatory allowance, transportation allowance, etc.) or indirectly (subsidies on food, transportation, housing, education, health, etc.). This concept has been used in this book very effectively as a measure of talent. The intention seems to be to enhance the effectiveness of employees and the return on investment for corporations. Employees often change jobs for higher CTCs, but are they delivering what they are supposed to deliver? Are they providing services commensurate with the level at which they are being paid or the level at which their talent has been valued? How much time is required for an employee to start providing returns on the investments made by the company? This book aims to help employees and corporations by raising some such important issues.

Professor Rao’s book, Hurconomics for Talent Management, presents several useful thoughts on the economics of human resources. Professor Rao costs the time and talent of employees by calculating the CTC per minute. It is very interesting and, at the same time, amusing, to note that when an employee is paid a CTC as low as 1.20 lakh, the employee costs one rupee per minute to the company. Further, when a manager is paid a CTC of 12 lakh, he or she costs 600 per hour to the company, and the opportunity cost may vary from four to ten times that amount.

Professor Rao has also emphasized the need for measuring intangibles through the concept of intellectual capital. As indicated in the second chapter of this book, the market value of most companies is due to their intellectual capital, and human capital is a significant constituent of this. This is very true as companies witness great changes in their share values when some of their valued managers leave.

Professor Rao has broken new ground by costing time and talent. I hope this will lay the foundation for future work in this area. The concepts developed have a wide applicability and include such areas as education, health and government service. This book will be a great help to managers, and particularly HRD managers and CEOs who need to manage time and talent better. Managing time and talent effectively is crucial for competitive advantage and nation building.

Dr C. Rangarajan
Chairman
Economic Advisory Council to the Prime Minister
and
Former Governor
Reserve Bank of India