Daybreak - How to build companies that last when their employees don’t

Episode Date: May 6, 2025

Thanks to AI, economic disruptions, mass layoffs, and a bunch of other fun things, the 40-year career is no longer something you can take for granted. And that fundamentally changes the nature of our careers. No one embodies that change more than the Gen Z workforce. Young employees are now seeking a job, not a career. They don't join organisations to retire from them. Instead they see them merely as a step along the way. Which is why, the most rigid companies, known for being forts of loyalists, are loosening up to accommodate the needs of younger generations.Tune in. Daybreak is looking for a talented audio journalist with at least two years of experience. Check out the role here. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. It's hard to imagine that not so long ago, a job in a career were two sides of the same coin. Let me put it this way. If LinkedIn was around back then, most people's career timelines would look just about the same. You'd start out at one company, and if all goes well,

steadily rise the ranks until you're handed that classic gold HMT watch at your retirement party 30 or 40 years later. But now, I think you'll agree that things could not be more different. Thanks to AI, economic disruptions, mass layoffs and a bunch of other fun things, the 40-year career is no longer something you can take for granted. And that fundamentally changes the nature of our careers. Now, here's the thing. No one embodies that change more than the Gen Z work. Right now, people are not looking at a company as a place to make a career, but just a place to get a job.

To get a paycheck, to get something you can add to your CV and then jump to the next best opportunity, right? That's my colleague De Banjali Biswas. She covers careers and workplaces for the ken and is a Genzi employee herself. She spoke to HR professionals, recruiters and employees to understand the shift better. What caused it? And more importantly, how are our. are companies dealing with it? So what this means for companies is that aside from caring about your typical metrics, like your revenue and your profit, they also need to care about something that earlier was taken for granted.

They took for granted the fact that if you are in a company, you will have people to work for the company. But now that's not a constant anymore. So companies have to care a lot more, very actively care about employee engagement, employee retention, making sure that they find value in what they're doing, right? Now, that's a massive switchup for organisations in India, particularly legacy companies like the Tata Consultancy Services or the Hindustan Uni-Leavers of the world,

where up until not so long ago, it was the company that dictated the terms. You didn't negotiate with the institution. You simply retired from it. But today, the tables have turned. De Banjali spoke to our management trainee at Larson and Tobro who was ready to quit after just nine months in the job because the 10-lac CTC just didn't work for him anymore. He claimed that of the nearly 50 trainees who joined with him,

one-fifth had already quit and several more are planning to. Now, whether or not that was entirely accurate information, this isn't just an LNT issue. Murli Sankhanam, the chief human resources officer at Ascent HR Technologies, put it quite nicely. He said, young employees are now seeking a... job, not a career. When you are a young professional in this space and you are at one job, one role, doing one kind of work for years on end, you are bound to feel stuck, you know,

and no one wants to feel that. They want to move around. So as a result, people want to grow, but not necessarily within a company from point A to point B, slow and steady, but they want to grow in skills and competencies. They want to grow personally. They want to grow personally. internally so that they can get better opportunities faster. Now, companies like Godridge, HUL and L&T are trying to arrest that trend. And the best way to do that is to get the memo and align with the sentiments of younger employees. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahal Philippos and I don't chase the news cycle.

Instead, every day of the week, my colleagues Nikda Sharma and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 6th of May. Hi, I'm Snigda, the co-host of this podcast. And before we jump back in, I just wanted to share some exciting news with you. Daybreak is growing and we are looking to grow our team too. And if you're a journalist who listens to daybreak and thinks, I wish they'd cover this or I know exactly what would make daybreak even better,

we would love to hear from you. We're looking for somebody who's curious, who's driven, and passionate about business and tech news. If that sounds like you or somebody you know, please check out the details in the show notes. Applications are open now. And back to the episode. There was once a time when getting accepted to a management trainee program

was the ultimate way to kickstart your career. Yet, today, only about 30 to 40% of those future leaders actually continue in the program beyond the first couple years. The thing is, two years, into these programs and young employees feel like they are ready to take on the world. At the base of all of this is ambition. People are just a lot more ambitious right now. The desire to grow, but not just grow, but grow quickly, is a lot more important.

Now, employees in some ways are calling the shots. They are setting expectations for their employers to meet. For instance, HUL hires 15 to 20 management trainees, every year to mold them into future leaders. But in the last few years, the company started seeing an increase in what they called infant attrition. So infant attrition is basically you join a company and you don't even make it a year, right? Like you quit within the first year.

You leave before you've even had time to make a place for yourself in the company, get to know anyone in the company. An HR professional from HUL explained that the end goal for these management trainees mostly is to become a brand manager. But the part to getting there is not so easy. It's a grueling six to eight year process. The first two to four years is spent in sales or sales adjacent things. So the first two years during your training, you have to go to rural areas, you have to live in tier two to three towns. you need to work with vendor partners on the ground.

You are not going to get that cushy life of working out of a fancy MNC building in a Tier 1 city, have access to great food and theaters around you, right? And that is not the lifestyle they want. So that expectation breaks because in their mind they are thinking long term, I'm going to be a brand manager and I'm going to have a aim of 100 under me. But in the short term, they don't realize that they have to go through the, sales process, which is not something they care about. Now, for most of us, voluntarily escaping the comfort of a steady job so soon is probably

terrifying to even think about. So I was curious to understand what was making these Genzi employees so fearless. All of this comes from this feeling of I have a safety net because if you look at young professionals in urban India, a lot of them come from dual-income households. they come from a background where their parents have saved up over the years and they can now afford to move around, quit their jobs because they are not going to be out on the streets if they are without a job for a couple of months, right?

And along with all of this, of course, there is the presence of social media, social pressure. Every time you see a LinkedIn post with someone saying, I'm very glad to announce that I have moved to this new role. It adds to a sense of what am I doing if I haven't changed jobs in a couple of years. You know, am I stuck? Am I losing out? Am I not good enough to get these promotions and these job changes? Sure, not everyone has that safety net,

but some of the young trainees DeBanjali spoke to said they still had more of a cushion than their parents. It's that cushion, that safety net, that allows some of them to even accept a pay cut to prepare for a bigger forward leap. But the thing is, while they made it. these ambitious leaps and sidesteps. It's companies that very often end up paying. One of the HR executives I spoke to Murali, Santanam at Ascent HR, he gave me his personal formula of sorts, right? Which accounts for not just the recruitment, training, onboarding cost, but also the entire cost of an employee leaving and there being this vacuum in a team, right? So all of that combined, for younger level employees, the cost is about one-fourth of their

annual salary or the amount that is paid to them annually, that pay package, rather. For mid-level employees, it can be half as high as half of their entire pay package. And for senior-level executives, it is the highest because that is where the stakes are the most. These are the brains of the companies in a way. So there, if an executive leaves, the cost to company there becomes almost nine months to 12 months worth of their annual pay package, which is a huge amount, right? And it isn't just monetary.

Think about the impact this has on things like team dynamics, client relationships, timelines end up getting delayed. Then sometimes if there's a very influential management, handling a team and that manager decides to shift to a different company. They'll often bring their team with them because they have a synergy of working together. So then what happens to that project or the tasks that that team was doing, right? That project and task gets stalled. So there are those kinds of additional resource, time and monetary costs attached to it.

You can't build a legacy on shaky talent. So these companies have to find ways to either retain talent or make peace. with a rate of attrition. So for retention, you obviously have the very basic things, things that have been happening for a while. You have offering better pay, very basic tactic. You offer better working conditions, which means you allow people to relocate to different cities to be closer to families. That's what a lot of companies like Bajajaj talked about, something they prioritized to keep company culture up. It also might be. relocation across the world, right?

Because people aspire to go abroad, live abroad, get better pay. So a lot of MNCs, large companies that have presences globally allow that as well. Some companies are also offering their employees more flexibility to work remotely. A management trainee DeBanjali spoke to from Access Bank said working in the banking team is very stressful. But the fact that it offers a solid hybrid policy means she's able to manage her professional and personal commitments with relative ease. And then, of course, aside from these obvious things,

you also have the very structure of orgs flexing, you know. They can't be as rigid anymore. So they have to get rid of that. I mean, when you think of rigid organizations very set in its way, is very established, HUL comes to mind. They have a very, very structured program for management trainees entering. The career progress is laid out minutely. over the next six to eight years.

And there's a very clear way in which you go from point A to point B. But even within these very rigid structures, change is coming about in baby steps, of course. Because so the brand manager I spoke to, they said that they were one of the few people to ever skip the sales route, the part that causes infant nutrition because people don't want to deal with the unglamorous lifestyle of sales without, before going to marketing. Like Tebanjali mentioned, these companies have realised that rigid structures just don't work anymore. So if a manager sees potential in an employee, they are okay to let them skip a few rungs of the ladder now.

Earlier succession planning was very simply, okay, this person exists. They have potential to be a leader for us in the future. let's just keep an eye on them. But now it's not enough to just identify these people. You also have to make sure that they're engaged, that they are staying, and they're learning exactly what they need to do to become the successors, the leaders, which means that it's not about pinpointing the person, but also putting them in different roles actively mapping out an entire career trajectory for them.

You know, someone, you might want to put them in the head office to learn strategy. and then you might want to move them to a different team to learn finance. As a result, you see a lot of younger people entering CXO levels very early on. Board members are younger. CEOs and CFOs are younger. All because companies are trying to create more opportunities for growth. A decade ago, interns meeting the CEOs and talking to them over a cup of coffee was never heard of. Now, thanks to people-centric policies like LNT's Chaipe Chachar and Bajajan's Raja and Bajajan's

regular reviews with employees, they end up feeling seen. All things considered, however, while the industry is having long-term conversations about changing older systems and culture, the rate of change is still slow. Unless management can find a balance between urgency and importance, employees will drain themselves working, talent managers will continue hunting for eternity, and companies will become history in a few years. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform.

What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's produced by me, Snigda Sharma, and edited by Rajiv Sien.