The long hunt for top talent at India Inc
A recent CEO search for a passenger car maker took a year to be finalised.
A recent CEO search for a passenger car maker took a year to be finalised. The company, with a turnover of half a billion dollars, was looking at a candidate with expertise in R&D, design and styling along with a strong operations background. It interviewed eight candidates before closing the search.
“Normally, companies would interview about five candidates but now firms are scanning a larger pool of around 10 or even more candidates,” said R Suresh, founder of Insist, a boutique CXO search firm. “This is due to uncertainty every business is facing nowadays resulting from technology disruption, complexities in product mix and overall slowdown.”
CEO and CXO searches are getting inordinately delayed with uncertainty shrouding most businesses and digital disruption hitting business models across sectors. Risk appetite is also low among most companies, forcing them to go slow on searches while widening their scope.
“Companies are making sure that the (departing) CEOs serve the notice period until they find a fit candidate,” said Uday Chawla, managing partner, Transearch India. “In the current market conditions, everyone is sceptical, cynical and cautious… So the firms are taking more time for due diligence. They are risk-averse.”
Cos More Picky
Another CEO search for a Rs 2,000-crore industrial chemicals company has already taken 10 months and is still not over. The company is looking for an Indian with global business development experience.
Companies in sectors such as auto, auto-related, industrial, engineering, pharmaceuticals and telecom are taking the longest. Things haven’t changed as much in some other sectors, such as newage companies, ecommerce and consumer-focused startups that are deciding on top talent quickly. Everyone else is taking their time.
“Companies are getting more picky and choosy in the selection of senior talent,” said Navnit Singh, chairman and country head, Korn Ferry India. “They do not mind waiting now for additional couple of months or even more to close the hunt for top talent… The idea is to grab the best in the market.”
At the same time, the number of recruitment mandates has not declined at any of the search firms such as Korn Ferry, Heidrick & Struggles, Quess, Transearch, Insist and EMA Partners.
Choosing top talent is taking as long as nine months now compared with four about a year ago at Quess, a company that specialises in recruitment and executive searches. It recently led a search for a leading financial services company to hire a head of finance in a non-metro city. Candidates with prior financial services experience were preferred.
“Market scanning from the direct talent pool didn’t result in a closure due to factors such as culture misfit, compensation misfit etc., hence the search was expanded to other sectors,” said Lohit Bhatia, president, Quess Corp. The search is incomplete after five months.
From three months, it’s now taking six months to close a CXO/ CEO search, according to A Ramachandran, senior partner at EMA Partners India. EMA currently has seven CEO search mandates compared with a total of 13 in FY19.
Arun Das Mahapatra, partner-incharge-India at Heidrick & Struggles, agreed with this.
“Firms need better people to turn around especially in sectors that are facing slowdown like auto and auto ancillaries,” said Mahapatra.