India economic update

Milind S. Kothari

Managing Partner
BDO India
milindkothari@bdo.in

The state of Indian economy is always in question and it is said that it disappoints both the optimist and the pessimist. Providing interpretation of this state, in a speech before global business leaders, the Prime Minister, Mr. Narendra Modi claimed that his Government had transformed India’s economic paradigm in less than 4 years from being member of the fragile five to a country that was poised to more than double in size to US $ 5 trillion economy.

On the economic front, the encouraging news was that India’s GDP grew 7.2% in the third quarter of the fiscal year, surpassing expectation and ostensibly, wresting back the tag of the fastest growing economy from China on the back of rebounding industrial activity, especially manufacturing and construction and expansion in agriculture. The Indian economy received twin boost suggesting overall economic growth with industrial production growth rising to 7.5% in January on the back of strong manufacturing. On the other hand, the Consumer Price Index (CPI) showed a decline in retail inflation to 4.4% in February from 5.1% in the previous month showing early signs of industrial revival. This good news is after a long hiatus, post demonetization and implementation of Goods and Service Tax (GST). The growth in gross fixed capital formation as a sign of that investment which has been a laggard, may be resurgent, although the slowing of private consumption remains a concern. The core sector output grew 5.3% year on year in February on the back of steep rise in cement and fertilizer production.

The state of Corporate Governance in India has always been a matter of constant debate. The Security and Exchange Board of India (‘SEBI’) approved sweeping changes proposed by the Uday Kotak Panel on improving governance standards such as splitting the post of Chairman and Managing Director, tightening rules for Independent Directors, enhancing disclosure of related party transactions and mandatory secretarial audits for listed entities and material subsidiaries.

On the trade front, the US President Donald Trump’s threatened to impose a reciprocal tax with direct reference to Indian import duties on Harley Davidson motorcycles. Reacting to this threat, the Government maintained that the decision by US to raise import duty on steel and aluminum was discriminatory and would impact Indian exporters. The US move is also considered to be discriminatory because of selective application which is against the most favored nation concept.

The resolution of Insolvency cases under the newly introduced Insolvency and Bankruptcy Code (IBC) remains in limelight as the law continues to evolve alongside the progress of initial 12 large mandates released in June 2017. With a spate of high profile banking scams surfacing, each with an exposure in excess of US$ 1bn, the important debate ensuing is if the Government should continue holding stakes in banks. The private sector banks claim of higher corporate governance standards is being questioned in light of their high rates of debt default and bankruptcy cases.

The RBI scrapped a number of loan restructuring programs that banks were using to recast debt with the IBC, becoming the main tool to deal with defaulters. Almost all restructuring schemes of existing long-term project loans have been abolished. While the bankruptcy process appears to be stabilizing, the Regulator has found it apt to scrap the schemes that were mostly regarded as having been misused or not sophisticated enough to deal with the bad loan burden. The result of the RBI move would mean that nearly US $ 21 bn of stress loan may be headed to Bankruptcy code. These loans are mostly in the infrastructure sectors such as power, telecom, roads and ports.

One of the dire needs for India’s sustainable growth is creation of job for the million who come into the market every month. India is seeing an upsurge in hiring on the back of robust economic growth. The credit for the turn of events could be attributed to Government’s Make in India initiative that has sharpened focus on public infrastructure projects, more overseas companies recruiting to build their teams in India, enhanced activity in renewable energy sector and increasing role of technology. This news should come as a welcome relief to the Government as it readies for state elections in the key states and the narrative of this result would have a deep impact on the outcome of national elections, slated in the summer of 2019.

India economic update

M & A tracker

Rajesh Thakkar

Partner /Transaction Tax
Tax & Regulatory Services
rajeshthakkar@bdo.in

M&A in India

Between January 2018 to March 2018, around 130 M&A deals were announced / completed aggregating to approx. USD 3228.18 mn; dominated by domestic deals (81) followed by cross border deals (49)

In terms of sectors, Materials saw the maximum deal value with deals worth around USD 1115 mn, followed by Information Technology with USD 816.38 mn

Deal announcements

(Deals mentioned in the M&A Tracker do not include those with undisclosed deal values as well as those which have been announced but not closed)

Target Company: Bharti Telecom Limited
Acquiring Company: Singapore Telecommunications Limited
Deal Value (in mn USD): 411.38

  • In February 2018, Singapore Telecommunications Limited acquired a minority stake in Bharti Telecom Limited for a total consideration of $411.38 mn through preferential allotment.
  • Post-transaction, Singapore Telecommunications Limited stake in Bharti Telecom has increased to 48.90% stake and Bharti Enterprise would hold more than 50% stake.

Target Company: Edina Power Systems Limited
Acquiring Company: EnergyPro Assets Limited
Deal Value (in mn USD): 75.65

  • In March 2018, EnergyPro Assets Limited (EPAL) acquired UK based Edina Power Systems Limited (Edina), for a total consideration of $75.65 mn. EPAL is a joint venture between State-run Energy Efficiency Services Limited (EESL) and UK-based EnergyPro Limited.
  • Through this acquisition, EPAL intends to bring combined heat & power (CHP) technology into India, providing an integrated service offering to industries that would enable them to receive equipment maintenance and, electricity. It would also help EESL tap into UK’s £6 billion market for energy efficiency products.
  • Post transaction, Edina operates as a subsidiary of EPAL.

Target Company: The Clearing Corporation of India Limited
Acquiring Company: ICICI Bank Limited
Deal Value (in mn USD): 22.46

  • In January, 2018 ICICI Bank Limited acquired 4.40% stake in The Clearing Corporation of India Limited (CCL) for a total consideration of $22.46 mn (INR 1.43 billion) from State Bank of India.
  • CCL provides clearing and settlement service for transactions in money, government securities, and foreign exchange. It offers services like securities settlement, collateralised borrowing and lending obligation (CBLO), Forex (FX) settlement, continuous linked settlement (CLS), FX-trading, derivatives, collateral and funds, risk management, research.
  • Post-transaction, State Bank of India holds 16.80% stake and ICICI Bank Limited holds 9.9% stake in CCL.

Target Company: Viacom 18 Media Private Limited
Acquiring Company: TV18 Broadcast Limited
Deal Value (in mn USD): 20

  • In January 2018, TV18 Broadcast Limited (TV18) has acquired another 1% stake in Viacom 18 Media Private Limited (Viacom 18) from Viacom Inc. for a total consideration of $20 mn.
  • Viacom 18 offers multi-platform, multi-generational and multicultural brand across television, film, digital media and live events. It owns and operates fifteen channels in seven languages focusing on youth and children entertainment.
  • The acquisition would enable Viacom18 to leverage Reliance Jio Infocomm Limited’s better reach by offering content to mobile users.
  • The transaction further enables TV18's vision for Viacom18 to accentuate the focus on excellence and integration in the broadcast and digital space.
  • Post transaction, TV18 holds 51% stake and Viacom Inc. holds remaining 49% stake.
M & A tracker

Feature story

Shravan Prabhu

Cyber Security and IT Governance Partner
Business Advisory Services
BDO India shravanprabhu@bdo.in

European Union – General Data Protection Regulation

In today’s digital savvy world with many innovations and technology advances happening, there is a huge amount of data created, exchanged and processed on a daily basis. Organizations always relied on some form of data to make strategic business decisions. Data helps businesses differentiate themselves and present a competitive edge for unique market positioning. At the same time due to increasing cases of online outrages like Facebook-Cambridge Analytica data scandal, Yahoo data breach, it has become important to have a lawful basis for protecting that data. Concerns have been growing on the way companies use data, as current regulations offer limited control over its usage. The European Union has taken the lead in amending its existing data protection laws through the introduction of General Data Protection Regulation (GDPR). GDPR is a new law in the European Union (EU) that provides uniform data protection regulation throughout the EU & UK. It will represent one of the highest standards of data protection in the world, creating a consistent, global, and unified legal basis for data protection and enforcement across the Member-States.

GDPR was adopted on 27 April 2016 and will become enforceable from 25 May 2018, after a 2 year transition period replacing the data protection directive that was adopted in 1995. Non-compliance to articles of the regulation will lead to increased administrative fines of up to € 20 million, or 4% annual global turnover-whichever is higher in the event.

GDPR applies to –

  • Companies that collect data of citizens in EU countries
  • Individuals/organizations that are either data controllers (an individual or a body who controls and is responsible for the collection, storage and use of personal information in computer systems or in manual files) or data processors (an individual or a body who controls and is responsible for the collection, holding or processing personal data on behalf of a data controller, but do not exercise responsibility or control over how the personal data is processed) irrespective of whether you are located in or outside the EU/UK region.

The GDPR in general obliges companies to regulate the processing of the personal data. The idea of processing is very broad and covers each and every processing operation that can be done on personal data, irrespective of whether it is undertaken by automated or non-automated means or whether done actively or passively. The initial collection of personal data till the final deletion or destruction is considered processing, including creating personal data, storing, using, copying, aggregating, adapting, amending, sharing, transmitting, archiving, selling, losing and erasing the data.

The GDPR requires that controllers and processors of personal data shall act lawfully, fairly and transparently in their use of personal data and how they deal with the people to whom the data relate.

KEY CONSIDERATIONS WHEN IMPLEMENTING GDPR

  • What is the volume and criticality of personal data of each EU individual?
  • Where and in which format is the personal data stored for each EU individual?
  • How strong is the current security framework to safeguard breach of critical data and how ready are you to provide evidence of compliance to EU privacy regulators?
  • Is there a strategy to mitigate the prevailing risks subject to current security postures and have you considered the requirements of the EU GDPR for your implementation or product/service?

APPROACH TO GET STARTED
There are two distinct ways to adhere to the regulation:

  • Compliance-based approach that focuses only on the legislative requirements within the GDPR, without any weightage for risk, or the organization’s key business objectives.
  • Security-based approach that is risk-based and recognizes the operational realities of the organization’s processing or business activities and the way the law is enforced in practice. The risk based approach recognizes that businesses, litigators and regulators have to make hard choices when it comes to priorities. It will hence tackle major risk areas first, taking account of the entity’s key business objectives, and will seek to maximize return on investment. The risk based approach requires a more holistic view of the issues than the compliance-based approach.

BENEFITS WITH GDPR
Once an organization becomes compliant to GDPR, it will bring the following benefits –

  • Robust security framework
  • Improved storage, processing and access to personal information
  • Enhanced brand image and increased customer confidence
  • Lawful processing of personal data across borders
  • Reinforced incident management operations

GDPR, while challenging to absorb and implement in the short term, would have long range positive effects. Let your customers know that you highly value their privacy and your own accountability, that will make you a responsible corporate.

Feature story

Guest column

ARJUN PRATAP

Founder and CEO
EdGE Networks Pvt. Ltd.
arjun@edgenetworks.in

AI-fying HR

Today, we can safely say that we live in the age of Artificial Intelligence (AI) and bots. The implementation of cognitive and deep technologies are no longer a fancy experiment that large organisations undertake but a business imperative to yield better ROI and faster translation of processes.

A recent TCS Global Trend study, says that 68% of organisations use AI for IT functions, but 70% believe AI’s greatest impact by 2020 will be in functions beyond IT, such as Marketing, Customer Service, Finance, and HR.

In yet another study, a large consultancy firm ran the numbers that said, by 2030 global GDP could increase by 14% or $15.7 trillion because of AI.

HR cannot be neglected if an organisation wants to climb the success curve and implementation of AI would make the success journey faster and smoother. While many debate the role of AI and automation in making job roles obsolete for humans, the fact is, AI will only do away with tedious and repetitive tasks, thus allowing employees to focus on strategic issues.

With AI and cognitive technologies implemented in the HR systems, organisations can now identify and hire the best fitted talent faster, implement better workforce transformation measures, gauge and check employee attrition, design retention modules, forecast emerging skill & project demands and employee career progression plans and more.

Let’s delve deeper into some of these areas.

AI in recruitment
What do you think is the efficiency of the world’s best recruiter to scan the entire database of resumes and come up with matches with a high degree of fitment? Machine learning tools on the other hand can search millions of resumes in a fraction of minutes and give us results with high probability of a match. The future of recruitment closures hence may not be measured in days but in terms of hours! Hiring from campus and recruitment events, the turnaround time can be drastically reduced with these machine-based tools.

The use of bots for screening candidates and scheduling interviews is also showing an upward trend. Algorithms are available for asking hygiene check questions directly to candidates which help in further qualification for the role, while interviews are getting scheduled based on availability of the candidate and the interview panel.

AI to enable the workforce on the go
In today’s 24/7 hyper connected environment, employees are expected to be responsive and accessible round the clock. Say your colleague who’s on an important client call, requests you to join the call for a crucial project update that you had been overseeing, while you are enjoying your vacation with family. Wouldn’t you take this call?

Your answer most likely would be ‘Yes’. In such scenarios, tracing previous emails, or information related to the client at the eleventh hour may lead to stress. But AI could be your solution to this problem!

Imagine how easy it would be if technology allowed you to perform a real-time search in the context of your situation by just using a voice search on your mobile! You would come out a shining star in this situation – or any other.

AI will auto-suit basis workforce needs
A blunt yet often overlooked fact is that technology requires human training. We have been building technology such that it performs in the way we want it to and the same applies to AI. Therefore, it would be important for technology like AI to understand workforce capabilities, help them comprehend best practices, and help employees perform higher-skilled jobs with higher quality, higher productivity and greater competence. Only then, will AI see a larger adoption by the workforce.

As AI becomes a more mainstream technology, many progressive companies are beginning to make major investments in AI. As vendors take AI into existing employee communications and teamwork solutions, they must also watch out for areas where it can improve and increase productivity.

Guest column

India economic update

Milind S. Kothari

Managing Partner
BDO India
milindkothari@bdo.in
India economic update

M & A tracker

Rajesh Thakkar

Partner /Transaction Tax
Tax & Regulatory Services
rajeshthakkar@bdo.in
M & A tracker

Feature story

Shravan Prabhu

Cyber Security and IT Governance Partner
Business Advisory Services
BDO India shravanprabhu@bdo.in
Feature story

Guest column

ARJUN PRATAP

Founder and CEO
EdGE Networks Pvt. Ltd.
arjun@edgenetworks.in
Guest column
X

The state of Indian economy is always in question and it is said that it disappoints both the optimist and the pessimist. Providing interpretation of this state, in a speech before global business leaders, the Prime Minister, Mr. Narendra Modi claimed that his Government had transformed India’s economic paradigm in less than 4 years from being member of the fragile five to a country that was poised to more than double in size to US $ 5 trillion economy.

On the economic front, the encouraging news was that India’s GDP grew 7.2% in the third quarter of the fiscal year, surpassing expectation and ostensibly, wresting back the tag of the fastest growing economy from China on the back of rebounding industrial activity, especially manufacturing and construction and expansion in agriculture. The Indian economy received twin boost suggesting overall economic growth with industrial production growth rising to 7.5% in January on the back of strong manufacturing. On the other hand, the Consumer Price Index (CPI) showed a decline in retail inflation to 4.4% in February from 5.1% in the previous month showing early signs of industrial revival. This good news is after a long hiatus, post demonetization and implementation of Goods and Service Tax (GST). The growth in gross fixed capital formation as a sign of that investment which has been a laggard, may be resurgent, although the slowing of private consumption remains a concern. The core sector output grew 5.3% year on year in February on the back of steep rise in cement and fertilizer production.

The state of Corporate Governance in India has always been a matter of constant debate. The Security and Exchange Board of India (‘SEBI’) approved sweeping changes proposed by the Uday Kotak Panel on improving governance standards such as splitting the post of Chairman and Managing Director, tightening rules for Independent Directors, enhancing disclosure of related party transactions and mandatory secretarial audits for listed entities and material subsidiaries.

On the trade front, the US President Donald Trump’s threatened to impose a reciprocal tax with direct reference to Indian import duties on Harley Davidson motorcycles. Reacting to this threat, the Government maintained that the decision by US to raise import duty on steel and aluminum was discriminatory and would impact Indian exporters. The US move is also considered to be discriminatory because of selective application which is against the most favored nation concept.

The resolution of Insolvency cases under the newly introduced Insolvency and Bankruptcy Code (IBC) remains in limelight as the law continues to evolve alongside the progress of initial 12 large mandates released in June 2017. With a spate of high profile banking scams surfacing, each with an exposure in excess of US$ 1bn, the important debate ensuing is if the Government should continue holding stakes in banks. The private sector banks claim of higher corporate governance standards is being questioned in light of their high rates of debt default and bankruptcy cases.

The RBI scrapped a number of loan restructuring programs that banks were using to recast debt with the IBC, becoming the main tool to deal with defaulters. Almost all restructuring schemes of existing long-term project loans have been abolished. While the bankruptcy process appears to be stabilizing, the Regulator has found it apt to scrap the schemes that were mostly regarded as having been misused or not sophisticated enough to deal with the bad loan burden. The result of the RBI move would mean that nearly US $ 21 bn of stress loan may be headed to Bankruptcy code. These loans are mostly in the infrastructure sectors such as power, telecom, roads and ports.

One of the dire needs for India’s sustainable growth is creation of job for the million who come into the market every month. India is seeing an upsurge in hiring on the back of robust economic growth. The credit for the turn of events could be attributed to Government’s Make in India initiative that has sharpened focus on public infrastructure projects, more overseas companies recruiting to build their teams in India, enhanced activity in renewable energy sector and increasing role of technology. This news should come as a welcome relief to the Government as it readies for state elections in the key states and the narrative of this result would have a deep impact on the outcome of national elections, slated in the summer of 2019.

M&A in India

Between January 2018 to March 2018, around 130 M&A deals were announced / completed aggregating to approx. USD 3228.18 mn; dominated by domestic deals (81) followed by cross border deals (49)

In terms of sectors, Materials saw the maximum deal value with deals worth around USD 1115 mn, followed by Information Technology with USD 816.38 mn

Deal announcements

(Deals mentioned in the M&A Tracker do not include those with undisclosed deal values as well as those which have been announced but not closed)

Target Company: Bharti Telecom Limited
Acquiring Company: Singapore Telecommunications Limited
Deal Value (in mn USD): 411.38

  • In February 2018, Singapore Telecommunications Limited acquired a minority stake in Bharti Telecom Limited for a total consideration of $411.38 mn through preferential allotment.
  • Post-transaction, Singapore Telecommunications Limited stake in Bharti Telecom has increased to 48.90% stake and Bharti Enterprise would hold more than 50% stake.

Target Company: Edina Power Systems Limited
Acquiring Company: EnergyPro Assets Limited
Deal Value (in mn USD): 75.65

  • In March 2018, EnergyPro Assets Limited (EPAL) acquired UK based Edina Power Systems Limited (Edina), for a total consideration of $75.65 mn. EPAL is a joint venture between State-run Energy Efficiency Services Limited (EESL) and UK-based EnergyPro Limited.
  • Through this acquisition, EPAL intends to bring combined heat & power (CHP) technology into India, providing an integrated service offering to industries that would enable them to receive equipment maintenance and, electricity. It would also help EESL tap into UK’s £6 billion market for energy efficiency products.
  • Post transaction, Edina operates as a subsidiary of EPAL.

Target Company: The Clearing Corporation of India Limited
Acquiring Company: ICICI Bank Limited
Deal Value (in mn USD): 22.46

  • In January, 2018 ICICI Bank Limited acquired 4.40% stake in The Clearing Corporation of India Limited (CCL) for a total consideration of $22.46 mn (INR 1.43 billion) from State Bank of India.
  • CCL provides clearing and settlement service for transactions in money, government securities, and foreign exchange. It offers services like securities settlement, collateralised borrowing and lending obligation (CBLO), Forex (FX) settlement, continuous linked settlement (CLS), FX-trading, derivatives, collateral and funds, risk management, research.
  • Post-transaction, State Bank of India holds 16.80% stake and ICICI Bank Limited holds 9.9% stake in CCL.

Target Company: Viacom 18 Media Private Limited
Acquiring Company: TV18 Broadcast Limited
Deal Value (in mn USD): 20

  • In January 2018, TV18 Broadcast Limited (TV18) has acquired another 1% stake in Viacom 18 Media Private Limited (Viacom 18) from Viacom Inc. for a total consideration of $20 mn.
  • Viacom 18 offers multi-platform, multi-generational and multicultural brand across television, film, digital media and live events. It owns and operates fifteen channels in seven languages focusing on youth and children entertainment.
  • The acquisition would enable Viacom18 to leverage Reliance Jio Infocomm Limited’s better reach by offering content to mobile users.
  • The transaction further enables TV18's vision for Viacom18 to accentuate the focus on excellence and integration in the broadcast and digital space.
  • Post transaction, TV18 holds 51% stake and Viacom Inc. holds remaining 49% stake.

European Union – General Data Protection Regulation

In today’s digital savvy world with many innovations and technology advances happening, there is a huge amount of data created, exchanged and processed on a daily basis. Organizations always relied on some form of data to make strategic business decisions. Data helps businesses differentiate themselves and present a competitive edge for unique market positioning. At the same time due to increasing cases of online outrages like Facebook-Cambridge Analytica data scandal, Yahoo data breach, it has become important to have a lawful basis for protecting that data. Concerns have been growing on the way companies use data, as current regulations offer limited control over its usage. The European Union has taken the lead in amending its existing data protection laws through the introduction of General Data Protection Regulation (GDPR). GDPR is a new law in the European Union (EU) that provides uniform data protection regulation throughout the EU & UK. It will represent one of the highest standards of data protection in the world, creating a consistent, global, and unified legal basis for data protection and enforcement across the Member-States.

GDPR was adopted on 27 April 2016 and will become enforceable from 25 May 2018, after a 2 year transition period replacing the data protection directive that was adopted in 1995. Non-compliance to articles of the regulation will lead to increased administrative fines of up to € 20 million, or 4% annual global turnover-whichever is higher in the event.

GDPR applies to –

  • Companies that collect data of citizens in EU countries
  • Individuals/organizations that are either data controllers (an individual or a body who controls and is responsible for the collection, storage and use of personal information in computer systems or in manual files) or data processors (an individual or a body who controls and is responsible for the collection, holding or processing personal data on behalf of a data controller, but do not exercise responsibility or control over how the personal data is processed) irrespective of whether you are located in or outside the EU/UK region.

The GDPR in general obliges companies to regulate the processing of the personal data. The idea of processing is very broad and covers each and every processing operation that can be done on personal data, irrespective of whether it is undertaken by automated or non-automated means or whether done actively or passively. The initial collection of personal data till the final deletion or destruction is considered processing, including creating personal data, storing, using, copying, aggregating, adapting, amending, sharing, transmitting, archiving, selling, losing and erasing the data.

The GDPR requires that controllers and processors of personal data shall act lawfully, fairly and transparently in their use of personal data and how they deal with the people to whom the data relate.

KEY CONSIDERATIONS WHEN IMPLEMENTING GDPR

  • What is the volume and criticality of personal data of each EU individual?
  • Where and in which format is the personal data stored for each EU individual?
  • How strong is the current security framework to safeguard breach of critical data and how ready are you to provide evidence of compliance to EU privacy regulators?
  • Is there a strategy to mitigate the prevailing risks subject to current security postures and have you considered the requirements of the EU GDPR for your implementation or product/service?

APPROACH TO GET STARTED
There are two distinct ways to adhere to the regulation:

  • Compliance-based approach that focuses only on the legislative requirements within the GDPR, without any weightage for risk, or the organization’s key business objectives.
  • Security-based approach that is risk-based and recognizes the operational realities of the organization’s processing or business activities and the way the law is enforced in practice. The risk based approach recognizes that businesses, litigators and regulators have to make hard choices when it comes to priorities. It will hence tackle major risk areas first, taking account of the entity’s key business objectives, and will seek to maximize return on investment. The risk based approach requires a more holistic view of the issues than the compliance-based approach.

BENEFITS WITH GDPR
Once an organization becomes compliant to GDPR, it will bring the following benefits –

  • Robust security framework
  • Improved storage, processing and access to personal information
  • Enhanced brand image and increased customer confidence
  • Lawful processing of personal data across borders
  • Reinforced incident management operations

GDPR, while challenging to absorb and implement in the short term, would have long range positive effects. Let your customers know that you highly value their privacy and your own accountability, that will make you a responsible corporate.

AI-fying HR

Today, we can safely say that we live in the age of Artificial Intelligence (AI) and bots. The implementation of cognitive and deep technologies are no longer a fancy experiment that large organisations undertake but a business imperative to yield better ROI and faster translation of processes.

A recent TCS Global Trend study, says that 68% of organisations use AI for IT functions, but 70% believe AI’s greatest impact by 2020 will be in functions beyond IT, such as Marketing, Customer Service, Finance, and HR.

In yet another study, a large consultancy firm ran the numbers that said, by 2030 global GDP could increase by 14% or $15.7 trillion because of AI.

HR cannot be neglected if an organisation wants to climb the success curve and implementation of AI would make the success journey faster and smoother. While many debate the role of AI and automation in making job roles obsolete for humans, the fact is, AI will only do away with tedious and repetitive tasks, thus allowing employees to focus on strategic issues.

With AI and cognitive technologies implemented in the HR systems, organisations can now identify and hire the best fitted talent faster, implement better workforce transformation measures, gauge and check employee attrition, design retention modules, forecast emerging skill & project demands and employee career progression plans and more.

Let’s delve deeper into some of these areas.

AI in recruitment
What do you think is the efficiency of the world’s best recruiter to scan the entire database of resumes and come up with matches with a high degree of fitment? Machine learning tools on the other hand can search millions of resumes in a fraction of minutes and give us results with high probability of a match. The future of recruitment closures hence may not be measured in days but in terms of hours! Hiring from campus and recruitment events, the turnaround time can be drastically reduced with these machine-based tools.

The use of bots for screening candidates and scheduling interviews is also showing an upward trend. Algorithms are available for asking hygiene check questions directly to candidates which help in further qualification for the role, while interviews are getting scheduled based on availability of the candidate and the interview panel.

AI to enable the workforce on the go
In today’s 24/7 hyper connected environment, employees are expected to be responsive and accessible round the clock. Say your colleague who’s on an important client call, requests you to join the call for a crucial project update that you had been overseeing, while you are enjoying your vacation with family. Wouldn’t you take this call?

Your answer most likely would be ‘Yes’. In such scenarios, tracing previous emails, or information related to the client at the eleventh hour may lead to stress. But AI could be your solution to this problem!

Imagine how easy it would be if technology allowed you to perform a real-time search in the context of your situation by just using a voice search on your mobile! You would come out a shining star in this situation – or any other.

AI will auto-suit basis workforce needs
A blunt yet often overlooked fact is that technology requires human training. We have been building technology such that it performs in the way we want it to and the same applies to AI. Therefore, it would be important for technology like AI to understand workforce capabilities, help them comprehend best practices, and help employees perform higher-skilled jobs with higher quality, higher productivity and greater competence. Only then, will AI see a larger adoption by the workforce.

As AI becomes a more mainstream technology, many progressive companies are beginning to make major investments in AI. As vendors take AI into existing employee communications and teamwork solutions, they must also watch out for areas where it can improve and increase productivity.