Exit of Top-Level Executives Ensues Changed Hiring Strategy
Emerging giants are now using stocks and equity stakes
The past few months have witnessed the stepping down of many top executives from some of the leading companies in India. This phenomenon has been witnessed across industries in the Indian market within a very short span of time.
The three competitors in telecom services, Vodafone, Reliance and Bharti Airtlel, all being leaders in the industry, were hit by high profile exits. Manoj Kohli of Bharti Airtel resigned as the Managing director, formally exiting from the telecom business. However, he still continues to head the non-telecom section of the business. Sunil Sood is to take office as the MD and CEO of Vodafone India from April 1 after Marten Pieters took a step down last month. Reliance Jio saw three high-profile exists within a span of just four months. The Chief of Human Resource, Steve Correa left Reliance Jio in November last year. 2015 witnessed the stepping down of Managing Director Sandeep Das who has now joined Reliance Retail and President Sumit Chowdhury at Reliance Jio. As per reports, Chowdhury is starting with his own telecom solutions entrepreneurial venture.
Even other industries are seeing a similar trend. Over a month ago SpiceJet witnessed the exit of its promoter Kalanithi Maran, Kavery Maran and MD, S. Nathrajhen. Infosys, last year, witnessed a spate of high executive step-downs after the return of Narayana Murthy to office as the Executive Chairman. Indian off-road and agricultural vehicle manufacturer, Force Motors also lost its Executive Director, Naresh Rattan few months back. Mary Chan, vice president, Global Connected Consumer of General Motors announced her resignation effective from March 31st this year.
Even growing startups like Zomato, Yebhi, Myntra, to name a few, have lost their senior executives in a very short period of time. The reason behind these exits has been outlined to a range of factors; senior professionals are either looking to take up entrepreneurial roles, other corporate jobs, or are even looking to take a break from work life.
In an already scarce environment in which it is getting difficult to find talent for leadership roles, these high-profile exits only make the growing Indian market more competitive. As a result, roles like that of CFOs, CMOs, Vice-President, etc. have out priced themselves. As per Mercer Executive Total Remuneration Survey 2014, the salaries of CHROs, CFOs and CMOs have increased by 45%, 48% and 52% respectively in the last 5 years.
While the success mantra for Indian Executives, as per a survey conducted by LinkedIn, has been outlined as high income, family and owning a house, these do not seem to work for senior talent anymore. Emerging giants, especially in the e-commerce sector, are now using stocks and equity stakes to lure top-level executives. Employee stock option plans (Esops) in the e-commerce industry seem to be working for these companies as most of their valuation is growing at an enormous rate.
The scarcity of top-level executives is also leading to an increase in the number of expatriates at the top management level in Indian companies. As per the HR service firm, Randstad India, there are about 30,000 to 35,000 expats currently working in India; this figure covers executive-level professionals, CEOs and even board members.