CXO hiring in India ...picking up!!*

Earlier this week, a financial daily journalist had reached out to me, among others, regarding a feature she was doing on the CXO hiring assignments in the recent quarter.

While I am yet to notice the same in the media as yet, I thought I shall share some of my experiences!!

-As compared to the previous 3 quarters, there has been a significant interest in the hiring of senior professionals in the past couple of quarters.

If the immediate knee jerk reaction to the economic downturn in 2008 was companies resorting to cutting costs –and holding back expansion plans in early 2009, most companies have realized that they cannot ‘get ahead of the pack’ by being afloat!! Strategic hiring has helped some break away from the herd- and implement some game changing ideas to prepare for the boom time-even as they tightened up systems and processes.

-Interestingly, different industries have been hiring different talent for CXO level.

IT service companies have looked at beefing their sales penetration, while the product companies have i improved their marketing- especially online marketing presence.

Infrastructure companies have been on the prowl for CFOs to raise money, and help restructure the debt –in a bid to rationalize costs. Quite a few power companies are in the race-considering the huge demand-supply gap!

Companies catering to the rapidly growing telecom market have been looking for CEO/COO to help enter Indian market-and have been looking for talent –with excellent contacts with the major stakeholders-i.e. Government, Operators and Equipment manufacturers.

-There has not been a difference in the salaries- as most the talent sought have been niche. And moreover, since these are very critical people,on whom the company’s success is hinging on, there has not been any discounting of salaries compared to 2008. There has been an increase of variable component-in the CTC figure though-with a substantial ‘productivity linked component’!

-There has been a sense of urgency to buy out notice periods-after almost a year of lull.

Typically Indian companies have 2-3 months notice period –while most foreign companies are used to people joining in a month’s time once the hire has been finalized. Considering the opportunity time to ‘go to market; the hiring companies are keen to absorb the increase in costs.

Interestingly, as the incumbents are already senior professionals-and privy to a lot of sensitive information and strategic inputs, most employers are willing to let go of people-without too much of fuss-by quickly moving in colleagues laterally to take over the responsibilities immediately. There is however, an increasing emphasis of a proven track record in the Indian subcontinent-even if the person has been abroad of late.

Well, the above trends are more reflective of the action we at Options have been involved in, I shall be glad to have updates regarding the experiences you have been abreast with.

RSVP [email protected]

* I guess the devil lies in the detail!! One must appreciate that the two quarters, after the Sept 15th 2008 fall of Lehman Brothers, was pretty poor. In contrast, even a moderate increase -and on a low base- can be flatteringly deceptive as the headline!

Dr Vivek Wadhwa on "The Reverse Brain Drain To India And China"

Here is a brief extract from "Beware The Reverse Brain Drain To India And China" a post written by Vivek Wadhwa-an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Executive in Residence at Duke University.

Survey of Returned Indians:

My team of researchers at Duke, Harvard and Berkeley polled 1203 returnees to India and China during the second half of 2008 to find answers to exactly this question. What we found should concern even the most boisterous Silicon Valley boosters.

1. We learnt that most returned in their prime: the average age of the Indian returnees was 30 . They were really well educated: 66% held a masters and 12% had PhDs. These degrees were mostly in management, technology, and science. Clearly these returnees are in the U.S. population’s educational top tier—precisely the kind of people who can make the greatest contribution to an economy’s innovation and growth. And it isn’t just new immigrants who are returning home, we learned.

2.Some 27% had permanent resident status or were U.S. citizens. That’s right-its not about green cards!

What propelled them to return home? 69% of the Indians cited professional opportunities. And while they make less money in absolute terms at home, most said their salaries brought a “better quality of life” than what they had in the U.S. (There was also some reverse culture shock—complaints about congestion in India.) When it came to social factors, 80% of the Indians cited better “family values” at home. Ability to care for aging parents was also cited, and this may be a hidden visa factor: it’s much harder to bring parents and other family members over to the U.S. than in the past. For the vast majority of returnees, a longing for family and friends was also a crucial element.

A return ticket home also put their career on steroids. About 10% of the Indians polled had held senior management jobs in the U.S. That number rose to 44% after they returned home.

When we asked what was better about the U.S. than home, 54% of Indian said that total financial compensation for their previous U.S. positions was better than at home. As regards Health-care benefits Indian respondents were split more evenly on this.

Possible returnees:

We surveyed 1,224 foreign students from dozens of nations who are currently studying at U.S. universities or who graduated in 2008.The majority told us that they didn’t think that the U.S. was the best place for their professional careers and they planned to return home. Only 6 percent of Indian students planned to settle in the U.S.

Many students wanted to stay for a few years after graduation if given a choice—58% of Indians, 54% of Chinese, and 40% of Europeans. But they see the future being brighter back home. Only 7% of Chinese students, 9% of European students, and 25% of Indian students believe that the best days of the U.S. economy lie ahead. Conversely, 74% of Chinese students and 86% of Indian students believe that the best days for their home country’s economy lie ahead. National Science Foundation studies have shown that the “5 year stay rates” for Chinese and Indians science and engineering PhD’s have historically been around 92 % and 85% respectively (NSF tracks these 5 years at a time, and the vast majority stay permanently).

While the above post has triggered off a lot of comments ( at last count, as I file in this post, there have been a little over than 300 comments!!). And an lot more on the twitter circuit..by the minute!!

I am personally convinced about some of these trends-as my research for a presentation I made at NPA Manila in November 2008 did point me to roots back to 1994! (pl refer slide 8 of 12)

1.In the 15yrs since 1994- US had slid from being the topmost destination of R&D to being the 17th in 2007.

2. There has been a steady decline in the US citizens choosing careers in the STEM (Science, Technology, Engineering and Maths)-as they were filled up more by immigrant students.

My own theory now is that perhaps the outsourcing of manufacturing in the seventies/eighties to lesser developed countries -were the precursor, for American students following careers in management & law-as manufacturing and R&D jobs had begun to dwindle...

Isn't this globalisation all about?? Well, if America's loss is the world's gain, Mr Wadhwa has another interesting post on protectionism vs innovation Nation, where in he dwells on the possible mantras for future economic development.

Jobs are back in India- Cherry picking though!

It is hard not to notice. As I picked up the latest business magazines for the weekend reading -the headlines are very much the same- "the jobs are back"!

Business World's cover story harps on 'Companies are adding new jobs, campus recruitment have picked up, and salaries are headed north once again'. Business Today Teamlease report highlights that the 'finance jobs are back'.

Business Outlook has a shorter report echoing the same. Dailies say "mid tier IT cos on prowl -to hire upto 30k"

I quite suspect the Mercer survey predicting a 8% hike in the coming quarters is the 'tipping point for the above sentiment, even as the Dataquest IDC (Q IDC)salary survey 2009 -just last fortnight, revealed the ugly face of recession.

One must appreciate the limitations of the surveys too-for eg- only 31 of the 200 IT companies contacted by DQ-IDC while Mercer did cover 93 companies across at least 7 industries!! So, one can actually be looking for some trends-more than optimistic predictions.

I am quite tempted to go into some of the finer prints.

Business World's report relies on Naukr'is monthly Job speak - an index based on the number of job listings each month. Please note, Sept09 index of 729 -the reason for the bonhomie, is better compared to the base of July08 being 1000!! I might sound as a broken record as I repeat the opinion that listings ( Naukri has annual subscription packages for corporates and recruitment consultants) aren't the best of indicators- unlike perhaps as much as paid advertisements in the print media. Most of the experts interviewed too talk about numbers that "they expect to hire "-save Unitech Wireless who have been hiring about 70 per week for the past quarter. One has to take the numbers of the campus hires with a pinch of salt-there are thousands still clutching on to offers made in 2008/09 -awaiting their date of joining...

The DQ-IDC report-though restricted to the IT industry has a few revelations, even as many of the big names refused to participate in the survey:

-that close to 29% of the respondent confirmed that either their salaries were reduced by 10% or had zero increments last year.

-Substantial drop in salaries of employees with 10-15 years of experience.

-The non-engineer component increased to 63% of the total workforce as the percentage of engineers hired -a reduction of 2% last year 37%.

As a recruiter-I feel that most in the industry-the corporates and the commentators, feel that the worst is over, and seem to think that there is indeed some light likely to be soon. We have examples of fellow recruiter firms -downsizing to the bare minimum, only retaining those who can continue to add value. Corporates too, after a period of denial, have now started reviewing their sources of hiring, and are embarking on various plans to put new systems in place. We at Options, have seen sudden interest in clients to review their panel of partners-in the last month or so. There are enquiries trickling in -more than the earlier quarter, but the bandwidth is being tested-hence the need to explore hiring ...so that one is ready when the boom happens!!

Moreover, we are not sure if there are any triggers for adding large numbers of people. Unlike in the West, there were no large scale layoffs in India. If one were to look back at the downturns in 2001 or 2003-04, key sectors like telecom, BPO, insurance and retain banking absorbed loads of jobs. Most of our MNC clients looking to enter India as a market-do make investments but in 'start-up' kind of modes. Retail and infrastructure continue to be in correction mode-and unless there is a government regulations-eg 3G launch, change in land acquistion norms enabling large scale investments in road & power-companies would stick to strategic hiring!!

Outlook Business captures the situation very succinctly.

Most companies wear a lean, toned look, having gone through a crash diet of cutting costs and shedding excess manpower flab on the way. Companies are beginning to hire again, but their hiring patterns would be different from what was witnessed during the boom years.

• Over 50% of hiring is for replacements left vacant during the slowdown.
• More stringent screening processes-as companies have lesser tolerance and so performance matters more than ever.
• Expect modest salary hikes with change in jobs.
• Focus is on hiring people who value the job and stay on, rather than those who jump jobs frequently.
• Communication and managerial skills are given more weightage as skill sets and work experiences are a given.

I have a feeling that the Oct-Nov-Dec would be the quarter which will show us -who all are 'walking the talk'. It would be interesting to note

-which companies are the first off the block to reinstate the deferred salaries/increments. And how they go about it! Would they be giving selective increments and bonuses to key talent? Would they dole out next year's increment in advance? Would some plan mid-term hikes to prevent poaching?

-the speed of finalising the hire. In the heydays of 2007 and 08, companies used to roll out 'offers by the end of the day'! Now, the hiring processes extend to over 3-4 months -even as the number of screening levels remain the same-as caution had taken over!

-Companies have been depending a lot on employee referrals and social networking sites - as 'quality' had taken preference over the 'quantity' or 'just in time' hiring modes ( walk ins, ads, third party recruitment firms, campus) in the last 12 months. With an increasing interest in hiring all around, how would companies optimise the hiring mix?

-At senior management levels, the compensation packages are getting linked to the company performance-and as a result the variable component would be increasingly important. With the improved stock market, do we see ESOP plans being re-introduced-to tie down professionals for a longer stint ?

At Options how are we gearing? We have used this time to put our back office in place. The automated resume management system is well oiled now. Our collaborative network with fellow recruiters ( not just in India, but also abroad) is much more closely operated now. We have had the time to review our client mix-and invest in those who have value our time and efforts more.

Yes, we are hiring for ourselves. But people with a difference. Who can add value to middle and senior management. Professionals who can not just track great talent, but also reach out to them, listen and engage them. Get reconnected to the topnotch candidates who have been in touch in the past-and provide reasons for them to be sticky this time around. We are banking on some of the social media tools to help build and manage relationships better...

Round up of some "Options" jobs in India and around!

It is just a few hours away from the long Diwali weekend in India. And I am having a writers block!

So here are a few links of some of the positions we are presently working on-both directly and some through our international associates . Feel free to reach out, and I shall be glad to give you more information over the weekend!

Country Manager -India Sales -Silicone products

Director Customer Support-Asia Pac-for Nasdaq listed co. in Bangalore

R&D Engineers -Inorganic materials in Korea

Technical architect-IT services firm in Chennai

Product manager- Water treatment company in Hyderabad

Engineering/ design/ Estimation/ Manufacturing openings in Process industry

Software developer in Brisbane

Openings in printing company in Dubai

Here is wishing you all a very happy Diwali!! May it bring in all the change we have desired for ourselves....

"Vulgar CEO salaries" in India

Me thinks it was a very innocuous comment by the Corporate Affairs Minister-"no vulgar salaries, please!, made on a Sunday-keeping in times with the general theme of 'austerity" evangelised by the Central government in the last few weeks :-)!

However, it seemed to have stirred a hornets nest-for there have been a variety of responses & reactions in the media and blogosphere-depending on which end of the spectrum the commentator is perched on.

I must confess when I first read about it, I was embarrassed-for I was reminded of a 'faux paus' I had made about 27yrs back -in the early days @ the management college. We were just getting initiated to the jargon and the enormities of the business complexities, and here was this professor who indicated the maximum managerial remuneration -as per Company's Act being about Rs 50,000 per annum. The smartie that I was-(I still shudder) sticking up my hand to check whether it was per month-and immediately there was a lot of snicker!! Believe me, even way back then, with stars in my eyes, I thought it was a poor reward for such a lot of responsibility and accountability. Just to put things in context-those were still days when the best salaries on campus then were in the range of about Rs 12,000 to 15000 pa!! To me-it didn't really seem all that glorious to be a CEO :)!!

One must also be reminded that one had known of senior management professionals paying an income tax equivalent to 97% of their income!! Imagine all the effort-and getting to carry home a pittance?? Did that restrict the motivation of managerial talent of the seventies ? It certainly tested the ingenuity and innovativeness of the Indian brain -to find innumerable ways to find the loopholes in the system...and deprive the govt. coffers anyway!

As I look back, ironically it was our present Prime Minister-who in his avataar of a Finance Minister ushered in the wave of liberalisation -and what we all of us see now- is a fruit of the events that followed. Market forces took over. Companies started paying premium for talent and performance. Not content with the time taken to farm talent within, they started shopping (hunting) outside. Stock options. Globalisation. Flash forward to today-we are in a different world. Especially -keeping an eye on global benchmarking in salaries, coupled with variable compensation and long-term incentives, a crore-mark is really not highly inaccessible for today’s topnotch professional.

I still feel one must be rewarded for initiative, innovation, performance, accountability and responsibility. While our Corporate Affairs minister -indicated a statistical inference of some " CEOs being more than 12,500 times the per capita income in the country"- the same was an aberration-for the Reliance honcho's salary was less than 0.3% of the group turnover!!

Elsewhere -it is reported that there are 'as many as 640 directors of listed companies took home with Rs 1 crore plus in total remuneration for the year-ended March 2009, compared to 570 in the previous year-despite a recessionary year!' One could add a few more thousands , ie senior executives who are not part of the board of directors, and directors of privately-held firms whose compensation details are not in public domain , who took home more than Rs 1 crore last year.

Does it still raise a case for government to reign in the industry?? Is it really imperative for the government to control economic prosperity in the country -by trying to regulate the companies that need to pay such salaries to attract and demand talent. Are our politicians getting carried by the talk 'of capping CEO salaries in advanced western economies, especially in the financial sector' -considering that the governments there did bail out some marquee names?

I am sure we will see more action on the topic!! Though I shall be glad if there is more focus from the government side is given on the 'corporate governance' aspects and to create conditions to promote shareholder activists. And hopefully, top management salaries are best left to shareholders, the ultimate owners of a company, to decide!!

US Job market trends -Is Reverse Brain drain to India 'decoupled'??

Latest news reports indicate that the US unemployment rate climbed to a fresh 26yr high of 9.8% in Sept 09 -making it the 21st consecutive month that the US economy has shed jobs!

The heavy layoffs have stopped but there are simply no new jobs available:a WSJ September job card predicts the harder the jobs are to get the harder and longer this road to recovery is going to be.

A more disturbing thought is, as a Wall Street Journal blog indicates, the increase in the U-6 or the comprehensive measure of labor under utilization accounts for people who have stopped looking for work or who can’t find full-time jobs.

To clarify

The 9.8% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things.

The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.

It is interesting to note the comment by the Nobel Prize winner Paul Krugman's observation in the context

'unless the government does much more than is currently planned to help the economy recover, the job market — a market in which there are currently six times as many people seeking work as there are jobs on offer — will remain terrible for years to come'

Juxtapose this with some more indicators in the US:

1 Among the millions of jobs indexed by Simply Hired, a job search engine in the US, compiled from Feb2008 to date, there is an increase of 77% of jobs for US Citizens.

2 more than 18,000 H-1B visas are still to be filled up, even as the new financial year began on Thursday.

3. As a recruiter of NPA an international recruiter network, with over 200 associates in the US alone, I am privy to getting an insight into another increasing trend of permanent jobs with a caveat “ No relocation, no visa transfers or Sponsorships, no C2C”- totally different from early 2008 when companies were willing to look at people with H1B with at least 2 yrs of validity!

Is there a dwindling interest in hiring of ‘immigrants’ in the US market? Considering that almost 25% of the H1B visas are generally bagged by Indians – is there a likelihood that we might see a reverse brain drain from US back to India soon?

As a recruiter who has been in touch with returning Indians from the US for about 10 years now, I can certainly feel a distinct increase in the number of aspirants looking at the job market in India. As compared to US Citizens of Indian origin –largely exploring for personal reasons hitherto, ( most find it difficult to compromise on the ROI of their housing investments-and are holding back plans !) – there is increasing interest in those who are yet in the ‘green card pipeline’!!

(Some other day, one could research how many Indians have picked up H1Bs- since 2004. For even if their visas were extended to 6 yrs, 2010 could be a year of reckoning for them as they might not be able to continue staying in the country!)

Well, what is the scene in India like? India Inc created 40% fewer jobs in 2008-09. While software service companies are employing less numbers compared to the previous years, the current turnaround in the equity markets are conducive enough to create new jobs in the financial service sectors.

Will Indian employers find the ‘returning Indian’ experience as relevant in the next few years as they had in the past? Or would the skills in demand be different?