Essar gets scouting cell to hunt for better talent and cut costs

Essar gets scouting cell to hunt for better talent and cut costs

Mumbai: Essar Group, the Mumbai-based conglomerate with interests in steel, oil, power and shipping , has set up an in-house “global talent acquisition cell", borrowing the concept from multinationals such as General Electric Co. and The Coca-Cola Co.

The group, controlled by the Ruia family, has already recruited 28 executives for the cell and plans to raise the count to 50 this year. The cell will be tasked with scouting around for and hiring employees for the group across business lines.

“Engaging a search firm for talent acquisition is a costlier alternative as you will end up paying huge fees," said Adil Malia, group president (human resources), Essar Group. “The existing average retention fee paid to search firms is around 25% to 30% of the monthly salary of the candidate recruited," added Malia, who joined the group from Coca-Cola.

Essar, which has bought steel and oil assets in the US and Kenya and employs 16% of its 41,500 employees abroad, plans to rapidly ramp up its operations including doubling its steel-making and trebling its oil refining capacity.

In the last few years, Essar has expanded its overseas presence to the US, Canada, Africa, West Asia, the Caribbean and Southeast Asia and added new lines of business including outsourcing and telecommunications. Malia said his group’s employee turnover rate is nearly 9%, much below the industry’s 13-15%.

Setting up such an in-house cell hints at a group’s large need for talent, says K. Sudarshan, country head at EMA Partners International Ltd, a talent search agency that hunts people for the Aditya Birla Group and Future Group, among others. “But the challenge will be to maintain, motivate and gainfully employ these talent search employees," he said. Information technology companies are known to have their own talent acquisition teams to address a shortage of skilled employees, while manufacturers primarily rely on search firms.

Billionaire Mukesh Ambani’s Reliance Industries Ltd, the country’s largest private sector company by sales, follows a practice established by his father and group founder, the late Dhirubhai Ambani, who acquired a talent search firm owned by V.V. Bhatt.

Bhatt manages Reliance Industries’ human resources even today. Mukesh’s estranged younger brother Anil Ambani began his career by closely working with Bhatt, learning the importance of spotting and recruiting talent. The Tata group sources a part of its crew from the Tata Administrative Service, started in the 1950s to create a talent pool. “It is worth having a separate team for talent acquisition since their hunt for talent will be deeper compared to a selective scan restricted to metros by search firms," Essar’s Malia said. “Our search will be to find global talent."

Senior human resources executives at many business groups are bogged down by senior-level recruitment that takes 3-6 months, and internal search firms can cut down time and costs and can create a proprietary data base of talent, said an HR consultant with a US firm who did not want to be identified.