CXO recruitment is picking up after a slowdown last year. Executive search firms and experts say there has been a 25-40% increase in hiring mandates for CXO roles since early January on the back of improved economic sentiment, liquidity returning to the system, Indian companies expanding overseas and more clarity on the business front.
All this has led to a flurry of activity after a slump in 2016 due to a combination of factors such as Brexit, the US elections and excessive presdisure on global business apart from domestic concerns such as demonetisation, corporate debt and an uncertain business environment.
“CXO mandate has increased significantly since January,” said R Suresh, managing director, RGF Executive Search. “CXO mandates had dropped to 10 or less per month in 2016. This January we got back to about 15 mandates and till now, in February, we have already got about 10 mandates.”
Sentiment appears to have improved with companies embarking on global collaborations, the private equity environment becoming active and pro-growth signals from the government. Also, a number of smaller companies from China and the Far East are investing in India.
“As far as business sentiment is concerned, positives outweigh negatives,” said Harsh Mariwala, chairman, Marico. “The negatives are global economy, demonetisation, short-term impact of GST (goods and services tax), elections, while the positives include low inflation, attraction of foreign resources and India standing out as a growth economy. I would say it’s a mixed bag and I am cautiously optimistic.”
Mandates are coming in across the board, with automobile, retail, financial services (digital, fintech), nonbank financial services, medical devices, technology-enabled services and infrastructure leading the pack. “We are seeing an upward movement in CXO hiring with about 25% increase in January over a year ago,” said Navnit Singh, managing director of India for Korn/Ferry International.
“Overall, economy is expected to look better with GST coming in. A lot of activity is happening on consulting side, automobile industry has picked up. FMCG (fast-moving consumer goods) has started picking up again after a plateau of about three months. Healthcare is seeing slow and steady growth.”
While C-suite hiring decisions would be delayed previously, search experts now see an urgency to close positions at this level.
“The start of 2017 saw new direction from companies wanting to be prepared to capture the potential growth. Therefore the CXO level positions should be in place to drive such efforts,” said Nicolas Dumoulin, managing director, Michael Page India.
“The recent uncertainty that stemmed from various factors has blown off and it’s back to business,” agreed K Sudarshan, managing partner for India, EMA Partners International, who’s seen a 30-40% pickup in CXO mandates. Kris Lakshmikanth, chairman and managing director at The Head Hunters India, said that after a practically blank slate for CXO mandates in November and December, it is now getting about three mandates every week. “In the last 10 days, we have about six CXO mandates, signaling that the companies have started looking for top-level talent once again,” he said. Some search experts said the February 1budget had given the trend further momentum.
“People were reeling under the demonetisation effect and a lot of consumer-led businesses were affected. The focus of companies shifted from hiring,” said Shailja Dutt, founder and chairperson, Stellar Search. “Now that the budget is over and cash flow situation eased up, the focus is back on CXO hiring.”