Hiring in India-Perspective of a HR leader in Asia

Dave Mendoza almost always conjures up a very innovative post! Here is an interesting interview -in 2 instalments-where he has engaged Mr Sanjay Singh, the Head HR for Whirlpool- Asia Region – which includes - India, China, Hong Kong, Taiwan, Australia and SEA ( Singapore, Malaysia, Taiwan, Korea, Thailand) .

In a very elaborate discussion -spanning from his thrill of the first hire -as a recruiter ('achievement and satisfaction of getting some one a job'), his preferred choices of media tools, websites, et al- it gives a very good insight into the uniqueness of hiring in India!!

Let me present you a few teasers..so that you can see the benefit of his wealth of experience!

-People, irrespective of the region they belong to, look for factors like job security and job satisfaction depending on the career stage they are in.

-Asia is different from USA in recruitment tactics. For eg, the job market in India is in a boost phase and job creation is happening in large numbers. What needs to be pointed out here though is that a large number of new jobs being created are executionary in nature and not managerial.

-As a consequence of the phased emergence of industry, candidates with relevant experience are often not available . In such a scenario experience and capability needs to be developed rapidly.

-Employment laws are beginning to become factors! The private sector as such does not fall under the purview of the employment laws laid down by the government. But recently some legislations have been passed which require the private sector to maintain a certain proportion of people from certain sections of the society. .

-While in the US there is a high degree of reliance on the company recruiters; head hunting firms are preferred, particularly for senior positions.In US it is easier to source candidates digitally, but Asians are still not very comfortable with the idea of their profiles being online for others to view.

-Indians are shy and value privacy. Calling a candidate either at her/his workplace or on the mobile phone is more often than not bound to invoke a suspicious reaction. The first thing that the prospective candidate will invariably say is ‘where did u get my number?’ People are not very comfortable with the idea that someone sourced their phone number for this purpose and is calling them with a very direct offer. I guess it has something to do with the circumventive fashion in which most Indians start a conversation, introduce themselves and then get to business. It is changing for sure but will take some time before people start accepting purely business motivated communication.

Well-he also lists his favourite third party recruitment consultancies in India!! Happy reading!

SME Sector in India -and random thoughts!

This blog is entirely inspired by my blogging guru Gautam Ghosh's posting trying to list out Small and Medium Management Consulting Firms in India -disregarding that some of them are potential competition to him-catering to the SME (small & medium enterprises) if they aren't already :-)!

Most people do not realise the SMEs account for almost 90% of industrial units in India and 40% of value addition in the manufacturing sector. They contribute 35% to India’s merchandise exports. I recall remember reading that this sector-also employs a huge amount of workforce & rarely gets the visibility of being the most among integral players in India’s economic growth story.

There are more than 350 clusters in India- eg electric fans in Calcutta, sewing machines in Ludhiana, stationery diesel engines in Rajkot ( these come first to my mind, as I was a Shriram group employee before my recruiter avataar!!), Jalandhar sports goods, Coimbatore agricultural pumps, Gurgaon auto courtesy Maruti, Tiruppur for textiles....etc!

Most of these firms-are run by technocrats-and operate from tight financial budgets-that they really do not have the luxury to afford full time HR professionals- and it is here the consulting fraternity can certainly add value.

Indian SME are amongst the most dominant recruiters the BRIC countries- considering the increasing IT spend!

Incidentally, a few months ago, I attended a meeting hosted by ICICI and IBM -to launch a project of IFC (World Bank group) SME Toolkit .The SME Toolkit India offers a wide range of how-to articles, business forms, free business software, online training, self-assessment exercises, quizzes, and resources to help entrepreneurs, business owners, and managers in India to start, finance, formalize, and grow their businesses.

As a recruiter, I am convinced some of the SMEs can tap into innovative ways of hiring
-retired professionals who want to have a more relaxed number of hours. Imagine the wealth of experience-even at say 20hrs a week ?
-temporary or small term projects to design and implement special initiatives-utilising some flexitime employees
-working closely with MBA/Engineering colleges and get interns to handle short-term projects.

In a podcast I recently heard, there are a lot of SMEs in US -who have tapped the opportunity of engaging 'interim' managers ('rightsized' from ironically large corporates-even as they were looking for new employment opportunities -which aren't easy to come by-considering the slow down!)-and it has been a win-win for all concerned.

With increasing attention from banks, MNC rating organisations, and SEBI approved SME exchange SEBI approved stock exchnage, we could be seeing a lot more SME's going global??

Are we consultants..guilty for looking at the low lying fruit-and blissfully unaware of the burgeoning potential of the perhaps the largest SME market in the world ( considering companies in China are largely driven by government??)

GG, cheer up- what we are looking at -is only the tip of the iceberg. The market is simply much bigger than what all of us can probably do justice to!!

By the way, here is another link of SME consultants..though extending beyond HR and placements HR and placements, lol.

What's up??

"What's up?? Don't see you in person these days?", asked Ravi-when he met me an hour back. Ravi and I live in the same neighbourhood-and played tennis every morning -not too long ago! We usually compare notes, on each others progress occasionally-and I keep pinging him (rather used to, as I reflect now, ..) for some good candidate he could refer for my mandates.( I could see we haven't exchanged any correspondence almost for a year now!)" Are you doing any other business?"

I laughed at it, and since I could see Ravi being summoned for his haircut, crisply summarised my progress report;

1. "Have been trying to change my business model as a recruiter. Some of my time is now paid for -by some clients-as a retainer-and so I have to upgrade my offerings. More research. More networking.

2. Have recently become an affiliate of a worldwide recruiting network...and so trying to figure out what 'international partners want'!! And yes, have made three trips abroad in the last 3 months..Nashville, Sydney and London...cutting into my regular work.

3. ie continue slogging on the usual 'contingent search assignments'-for that has been my bread and butter for the last 15years.

Guess, I shall need to clone myself into three different guys in order to do all these equally successfully"

Hmm, for an instant -I felt good I could highlight some of the work that has kept me busy. I have always been accused of being too verbose. Coming to think of it, there are a couple of other things that have been taking up my time:

1.Implement the 'application tracking system" -and now, after 8 months, realise the data migration has created another issue..most of the resumes may not be relevant -if Options truly changed its business model *!&&!

2. Searching for technological solutions- that could help collaboration among recruitment firms-that could enable us to leverage technology and the combined reach of all the members in the 'closed user group". It is reassuring that both the associations NPA and ERA, that I am part of, are thinking of building online platforms..and perhaps provide solutions to aid sharing of mandates, some hot candidates-and maybe -even a job portal.

However, once my haircut got underway, a scary thought just flashed...What am I trying to do? Change a business model? Based on the emerging trends??

Btw..what are the trends??In the last few months, I shudder to see all the predictions of pundits going wrong about different economic indicators:

1. Barrel prices of oil shooting up -and seeming to go higher every week!!

2. dollar vs rupee-did I hear some one say it would be 35? Its going the other way...

3. Inflation in India touching 11% from something around 7% -and even this doesn't include the impact of rising oil??

Would not each have an impact on the way companies manage their business? Certainly it should effect their hiring ??

Am I being foolish to invest in a future -which even economists are failing to comprehend? Do I instead decide to keep plucking the low lying fruit..till it lasts? Am I missing the wood for the trees....

I look forward to comments from my usual offline pals...

More Options for Returning Nationals in future ??

According to a survey conducted by the Association of Executive Search Consultants , the demand for expat senior executives is likely to come down in the coming ten years!!

The prediction is that within 10 years, high-cost international expatriates will largely be superseded by locals, returning nationals and regional expatriates in filling senior executive roles.

Personally, I will like to believe that this will happen faster -perhaps in the next 5yrs itself ;-)!

1. Traditionally, the market for expats grew as the major emerging economies developed, and MNCs entered new market-in a bid to lauch their products /services. And most companies found it easier to second senior management staff to make the foray into the new territory-and set expectations related to the culture -performance issues etc.

2. Most of these expat assignments were typically short term-about 18 months, by which time, internal resources could be identified and could then take over from the expats.

3. It takes a different personality type- perhaps with a lot of local flavour, to ramp up operations in short period- handle ambiguity, work thru chaos and churn that a lot of business operations would need to experience as growing. It is imperative that as a company scales up, a local /regional person with a readymade network hits the ground running!

4. There is an increasing trend in customising Compensation and Benefits packages-more focussed towards the local terms and conditions-and there may not be a compelling reason for expats to move, when compared to those of say, Indian origin -who are working abroad having family roots here in India!

5. I cannot resist bringing in the aspect of demographics! The period 2008 to 2015 will see the baby boomer generation retiring in the Western countries, thereby -creating a vacuum of middle and senior management talent in the parent companies of MNCs. Will the war for talent see new trends coming up- is anybody's guess.

I shall be glad to know about what you think!!

Outsourcing & increasing jobs in the US!!

During the last week, it was interesting to read the comments on the effect of leading statesmen on the role of outsourcing and its effect on jobs in the US.

• India's Minister of Commerce and Industry Kamal Nath asserted that Indian investments in the United States in the last two years had created more jobs in the US that American investment in India has, by pointing out:
  -American exports to India went up by over 70 per cent last year indicating healthy economies in developing countries mean greater markets.

-Indian growth is domestic market driven by increased consumption.

• Outlining his vision for a strong US economy, the Democratic presidential candidate Barack Obama said that US must invest in the research and innovation to create jobs and industries, for eg,

-in a renewable energy policy that ends addiction on foreign oil, provides real, long- term relief from high gas prices and high fuel costs, and builds a green economy.

- by rebuilding schools, roads, bridges, and other critical infrastructure that needs repair.

The latter statement was a surprise- especially since a few months ago, Mr Obama was touted to be anti-outsourcing-and expected to promote protectionism by building walls!!

Personally, I think there has to be a radical change in the view regarding the cap of immigrants. which, the Rand report issued by an American Association of Advancement of Science highlights,“rather than protecting jobs, could lead to reduced investment and employment at US'!! The recent reduction in skilled immigrant visas (H1-B) has the potential to reduce the inflow of foreign science and engineering workers; and curtailing the supply of these scientists and engineers can lead US firms to outsource more research and development works to foreign countries and locate new facilities overseas.

One thing globalisation will enable- thanks perhaps to technology- is 'free trade'-and it is imperative for all of us-be it countries, corporates -or individuals, change the way we have thought in the past!!

The global economic slowdown-impact on Indian IT industry?

A business journalist reached out to me over the weekend to get my perspective for a story she is doing on the 'hiring trends' as a result of the 'impending global slowdown'. Since I am travelling, the exchange was by mail-via a questionnaire-and so I am not too sure if I have addressed queries/issues she may have liked ;-)! I am positive-had it been a phone call-we could have had a more interactive session and we would have been able to brainstorm a little better.

However, here is the transcript -and so I shall be glad to hear from you-as before -both offline and online- about your views on the subject..

What are your IT clients – Tier I and Tier II – telling you in terms of their hiring plans for the year? Is there even a hint of lower hiring numbers as a result of the economic slowdown and tightening IT budgets in the US?

The IT industry has been slow pedaling since the last couple of quarters though they would not want to admit that they are hiring lower numbers. As of now, they are going thru the process of interviewing-essentially with an eye for great talent. Naturally the number of offers have dropped- and quite a few are on hold-as companies aren’t ‘hoarding’ as earlier!


Have your IT recruitments – in terms of numbers – started to see any downward trend in the last few months as compared to the previous year?

Personally, we at Options haven’t seen the numbers coming down-since we are really very marginal players-and at our base-we aren’t impacted with either the ‘boom or the bust’!

Our clients have been filling in critical positions-and we play a more ‘value added role’ this year-not just being content on ‘filling in the numbers’.

At what level is this downtrend expected to be felt the most – junior, mid or senior – and why?

I think it would be the middle management level that would be hit badly-as most entry level and junior level positions are cost effective. Especially in a market now –one can spend a decent time training new comers-and preparing them to ‘hit the ground running’ when the market picks up.

Senior management hiring would continue to be strategic-and companies would expect the candidates –who can ‘mine’ into clients and get as much business as possible, once they have a foot in the door’.

Do you feel there any specific skill sets where this downtrend is most likely to be visible?

Let me flip it around. Those with good technical skills AND functional knowledge with ability to manage clients-would be in high demand. In 2007 a pure java programmer may have been lapped up- but today he would need to have a decent exposure to the functional domain –and extremely good communication skills to make the grade.

At the moment, it only seems that the BFSI segment is affected-due to the US sub prime. The other verticals like manufacturing, utilities etc-all seem to announcing projects as per plan/expectations.

There is a lot of apprehension among graduating students in engineering colleges about their placements and salaries this year. How real are their fears?

Yes, I think the honeymoon is definitely going to be over. In any case most engineering students were ‘learning all the job skills’ after being recruited. Now that the companies have the luxury of time with them to prepare such talent, they may not pay the premium they have –in the last couple of years at campuses to attract talent.

Companies have the opportunity to bring down their costs of hiring-and training-and so one would surely see a more rationalized hiring in place. Surely the entry level salaries would not beat the inflation rate!


Do you believe that in a rush to grow their business in the last few years Indian IT services firms were somewhat lax in their quality of recruitments? And is this something that is coming back to haunt them now?

The IT industry now has the time to review their hiring process-and training. The pace of acquiring business was faster than building the talent pipeline and so the companies were forced to pay a premium for good talent-as they had the pressure of delivery.

This is a great time for companies to take stock of the quality of manpower-and so will use the opportunity to gear up for the immediate future. Its time comp

Are these IT companies now looking at tightening their recruitment processes? How will this affect all the stakeholders in the game – engineering students, executive search firms like yourself and the company itself

The tightening of recruitment processes will differentiate the men from the boys. Only a firm- or person-who can add value to all processes around-can sustain in future.

Its time that recruitment firms become an extended arm as partners to corporates-rather than vendors- and see one can go beyond just recruitment. Those with an eye on talent acquisition, talent management- and better on boarding processes, would succeed better in future.


What is your sense of the IT job market in 2008 – are things going to get worse or are you still optimistic?

2008 isn't likely to be great –though I can see a very robust 2009 ;-)!

The slow down in IT business is more on a cautious note at this stage. Yes, thanks to the sub prime, the financial services in US have been hit badly-and a lot of European companies are yet to take a call entirely truthfully.It is only the financial services companies that are being affected now-as most of them have gone back to the drawing board-and doing a lot of restructuring.Quite a few layoffs have been announced-and more to follow. The consequent uncertainty has put decision making on a hold for a while-and I think its only by Aug/Sept 08 -that things would be clear about the next years IT budget. As of now, it only seems to be postponed-not cancelled.In that perspective-IT companies depending on the BFSI segment are having to spend some uncertain times-while all other segments are not too affected.

But the bottom line..is that most companies in the West have had a top heavy organisation-and off shoring is the only way out for them-once they restructure-and so it is definitely going to be good news from Indian industry :-)!

I shall be glad to have your views, opinions and perspectives! What are companies telling you in terms of their hiring plans - at the junior, mid and senior level? Is temping going to be the biggest casualty here? Will this also impact the flow of techie NRIs back to India?