New Delhi: The Indian infrastructure industry, which was traditionally seen as a slow-moving sector when it came to employee movements, is now seeing a lot of churn at the top level.
In the past three-six months, some half a dozen senior-level executives from top companies in the power, construction, energy and engineering industries have changed jobs.
Resource crunch: A file photo of a flyover under construction on Hosur Road, outside Bangalore. The acceleration in the infrastructure sector has led to a “war for leadershp talent”. (Photo: Hemant Mishra / Mint)
Until now, it has been fast-growing sectors such as information technology (IT), banking and financial services, telecommunications and retail that have witnessed huge churn in their top deck. Joining the ranks now is the booming infrastructure, construction and engineering industry, say headhunters.
“A churn at the top level is the last thing you associate with an industry that had executives staying with a company until retirement,” says Neeraj Sagar, head of industrial practice at headhunting firm Egon Zehnder International.
In July, power and automation technology company ABB India Ltd’s president and head of the power systems business unit Pankaj Sachdeva moved to Kalpataru Power Transmission Ltd as deputy managing director, and Venkat Seshan, vice-president, corporate planning and strategy, Philips Electronics India Ltd, joined leading transformer manufacturer Emco Ltd as its president. Three months ago, P. Balakrishnan, executive president of Birla Copper, a unit of Hindalco Industries Ltd, joined the Indian operations of mining company Anglo-American Plc. as its managing director.
Similarly, engineering and construction company Larsen and Toubro Ltd, or L&T, lost two key executives—Hazira Works’ deputy general manager Y.S. Trivedi who joined construction company JMC Projects, and chief executive officer (CEO), developmental projects, Rohit Modi, who joined wind power company Suzlon Energy Ltd as the president—in the past three months.
In yet another top-level move, Raaj Kumar, joint managing director and CEO, JSW Energy, the energy arm of the Sajjan Jindal-headed JSW group, joined GMR Energy Ltd, an arm of infrastructure conglomerate GMR group, as its CEO.
“Though attrition at the leadership level is less than 0.5% in this space, loss of even a few heads is telling when there is virtually a war for experienced talent,” says G.N. Udiaver, general manager, Manpower Services India Pvt. Ltd, a staffing company.
Infrastructure practice heads at executive search firms say they are busier than ever. “Traditionally, this industry has been quite dull, but all that has changed in the past few months,” says Egon’s Sagar. “The fast expansion in the sector, launch of new projects and the entry of new players, both domestic as well as multinationals, have led to a war for the leadership talent in the sector.”
Some headhunters point out that increased activity in the energy and construction industries has seen second- and third-rung companies seeking more experienced people to handle their projects, and this has also led to a churn in the industry.
“There is a lot of demand from Rs50 crore to Rs400 crore firms that are looking at senior managers to take their businesses to the next level of growth,” says Manpower Service’s Udiaver.
According to S.C. Mehta, secretary general, the Construction Federation of India, an affiliate of the Confederation of Indian Industry, the sector comprising infrastructure, engineering and construction industries is growing around 10% every year. The Planning Commission projects total investments of more than Rs20.27 trillion to be made in various infrastructure projects in the 11th Plan (2007-2012). This is around 2.3 times the investment made in the 10th Plan.
In anticipation of the fact that over the next two-three years the war for top-level talent will intensify, some leading companies have started taking affirmative action. L&T, for instance, recently hired consultancy firm McKinsey and Co. to devise a strategy for developing leadership pipeline for the near future.
“It is very challenging to get quality senior people from outside in the infrastructure sector,” says M.S. Krishnamoorthy, senior vice-president, human resources, L&T. “As a company which is adding new businesses, it is important for us to create our own leadership talent pool.”
In a bid to make itself more attractive to employees, L&T created 67 strategic business units in July and appointed its key talent as CEOs of these units. Valued between $500 million (Rs2,135 crore) and $1 billion, these units are run like an independent company, says Krishnamoorthy. “Such assignments give employees a sense of empowerment and help in retaining the key talent.”