Most firms avoid recruitment for special projects or building bench strength.
Blame it on the economic slowdown, which is casting its shadow on C-suite recruitments. Growth-related appointment at companies, say head hunters, have come off between 30 and 50 per cent, even at the senior positions.
So companies, which were hiring aggressively for their special projects or to build a bench strength, have decided to give such appointments a miss.
“C-suite appointments have come down by around 30 per cent,” says R Suresh, managing director, Stanton Chase (India), a global executive search firm. “The main reason is the slowdown. Companies that wanted a business development head, strategy head, finance head and heads for their special purpose vehicles have all gone missing from the market.”
| CORNER CABIN BLUES Companies are hardening performance criteria, and pay-outs, of top-rung managers |
| * C-suite appointments have come down by 30-50% |
| * ll growth-oriented and futuristic planning put off |
| * Companies re-designing pay packages |
| * Bonuses no longer an annual phenomenon |
| * Real bonus to be paid only after three to five years |
| * Performance measurement being looked at a longer time frame and not annual |
| * Multiple criterion to qualify for bonus |
| * Increments for C-suite executives in 2012 only in single digits |
Also, in the past five years, at any given point in time, these companies used to have around five positions to fill, he notes. “They would have hired around 150 C-level executives every quarter. But that requirement has now gone down by half.”
Head hunters say the most hit are infrastructure companies. Further, the financial sector is not hiring in verticals, including investment banking, broking, wealth management, commercial and consumer banking.
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In many cases, companies are asking senior executives to take on more responsibilities and handle more geographies or regions than one.
“C-level hiring in the financial services is down by over 50 per cent,” estimates Sangeeta
Lala, Co-Founder and Senior Vice-President, TeamLease Services. “Only a handful of banks and insurance guys are continuing to hire. The majority of them have completely slashed their numbers. Also, the telecom infrastructure sector has ceased hiring completely.”
The economic slowdown has also led to a rework on pay packages. In many cases, bonus offerings have been reduced; some companies have even deferred disbursing these. “Pay packages for head honchos are also getting re-designed,” notes a Delhi-based recruiter. “Annual bonus may no longer exist. The real bonus will be offered only once in three to five years.”
An HR head of a Mumbai-based company says his office has revised their criterion for offering bonus. The trend now, he explains, “is that if earlier companies looked at an executive’s annual performance to decide on the bonus component, they are now looking at how he has performed in a longer term.”
Lala agrees the companies are putting many riders on bonus. “They are looking at both performance and longevity of employees,” he notes. “They are trying to see that talent which is there stays on.”
Increments for senior executives would also be possible only in single digits. The industry average would not cross 10-12 per cent, say recruiters.
Re-hiring however, will begin after the economic signals turn around and become positive. “Some areas would see signs of massive future growth,” says Suresh. “Some areas are plateauing after a big growth phase. Non-banking financial companies and logistics sector are hiring in good numbers. There are over a dozen NBFCs coming up. So, they are looking for senior talents.”