New Delhi: Quite a few eyebrows were raised among human resources, or HR, professionals when New York-based professional services firm Marsh and McLennan Cos Inc. chose Padma Ravichander to lead the India operations of its human resource consultancy Mercer Llc.
Before joining Mercer, she was president and managing director at technology services firm Perot Systems Corp., and had held leadership positions at Oracle Corp. and Hewlett-Packard Co. prior to that.
Ravichander is not the only “outsider” recruited by global firms providing human resource services.
Mercer’s rival Lincolnshire, Illinois-based Hewitt Associates Inc. hired Vishal Pandit to head its South Asia and Middle East operations. Like Ravichander, Pandit is new to HR consulting, looking after consumer finance at GE Money India, a subsidiary of US’ General Electric Co., before joining his new position.
Yet, he was hired because Hewitt wanted a professional who could boost and grow its India operations.
“India is a high growth market. At this stage, the firm needs people who have managed fast growing businesses,” Pandit says.
The hiring of generalists such as Ravichander and Pandit is a reflection of how some companies are coping with a talent crunch at leadership roles in a business that is rapidly expanding in the country with many companies also trying to find seasoned HR heads.
While industry numbers are not available for India, HR services firms are expected to grow 11.5% every year in the Asia-Pacific region, according to US-based Kennedy Information Inc., a provider of research in management and IT consulting, executive recruiting and investor relations.
HR consultancies in India, however, are facing increasing competition from IT companies and BPO firms, which are getting into this space.
In the financial year to March, the gross size of the recruitment industry in the country was estimated at more than Rs12,500 crore, a number based on service tax paid to the government, according to trade body Executive Recruiters Association, or ERA.
There were more than 24,000 registered recruitment firms in fiscal 2007-08, compared with around 3,000 in 2004-05, ERA says. The recruitment industry has grown an astounding 19 times in the past three financial years, according to ERA.
“It is expected to register 40% year-on-year growth during the next two years,” says B.R. Muralidharan, ERA’s executive director. “In the last two years, as per the report brought out by the ministry of finance, the fastest growing sector amongst 95 others, is the manpower recruiting agencies,” he says.
The HR services space is also getting increasingly competitive with global firms entering the fray. In such a scenario, HR and staffing firms are recruiting executives with sales and operations backgrounds who could beat challenges and tap new opportunities.
“Indian and Asia-Pacific markets are the growth engines of their parent’s businesses. These companies are, thus, scaling up their operations and bringing in people with a proven record of building enterprises,” says Charul Madan, a partner at Executive Access India Pvt. Ltd, an executive search firm.
Troy, Michigan-based staffing multinational Kelly Services Inc. recently hired Rajiv Mehrotra as country general manager for India. Mehrotra had spent around two decades in different sales and marketing, operations and strategic planning roles. Before joining Kelly Services, he headed business operations of Gurgaon-based wireless communications firm Shyam Telecom Ltd in India, Europe and Asia-Pacific.
Similarly, Milwaukee, Wisconsin-based employment services firm Manpower Inc. hired Naresh Malhan, who earlier worked at the consumer marketing unit of telecom company Tata Teleservices Ltd.
“Top positions don’t require functional competencies only. The person running an enterprise needs to have leadership skills,” says Janet Gasper Chowdhury, managing consultant, people and change practice, at audit firm PricewaterhouseCoopers. “He should have the vision and ability to take the firm on a sustainable growth path,” she points out.
“At the end of the day, even an HR company needs to be run like an enterprise,” Hewitt’s Pandit says.
Some experts point to a lack of leadership flair in the HR consulting business that may be prompting firms to look outside their boundaries for talent. “The trend is driven by a lack of quality people in this business,” says James Agrawal, head, BTI Consultants India Pvt. Ltd, executive search division of Kelly Services.
To attract talent, HR firms are offering candidates competitive packages. “In some cases, it is better than industry standards,” says Agrawal, alluding to the fact that HR is still not considered as high-profile as sectors such as telecom or financial services. “It’s (attractive compensation package) important to attract the right people.”
According to executives across firms, who declined being named given the sensitivity of the subject, larger multinationals are offering top officials between Rs3 crore and Rs4 crore a year, while offers by smaller firms range between Rs1.5 crore and Rs2.5 crore.