Tuesday, April 7, 2009

Sacked staff of top cos joining SMEs at lower salaries

NEW DELHI: If slowdown has been bad news for large companies, it has meant an opportunity for small and medium enterprises (SMEs) in their
Hiring


talent hunt. Little wonder then, SK Sharma, group director (HR) of Premier Shield, a medium-sized security solutions company, is a happy man.


In the past three months, this New Delhi-based firm has hired 12 executives at middle and senior managers from the likes of Unitech, Vishal Retail, Nucleus Software, The Park Hotels and Trident Hotels, all big names in real estate, retail, IT and hospitality sectors. Interestingly, these executives have joined Premier at salaries 30-50% lower than what they drew in their previous companies that had laid them off.

Mr Sharma is among a growing tribe of recruiters from medium-sized enterprises, operating in sectors that are rather insulated from the slowdown and are having the last laugh by hiring senior executives from slowdown-affected big firms. “It’s a good situation for us as these executives come with experience and well networked in big companies to help us grow our business,” said Mr Sharma.

Girish Bhandari (name changed on request), is one such employee. A 38-year-old former DGM (customer relations) at a Unitech project, he moved to Premier Shield at the same position with a 50% pay-cut after being asked to leave. His Rs 12-lakh annual package at Unitech has been halved, but he can’t complain. “It’s a matter of survival for people like us,” said Bhandari, father of a 10-year-old son, also the sole earning member of the family.

Largescale lay-offs and a surge of talent in the market has led to it being employer-driven. The extent of salary cuts that people are willing to take varies from case to case. Another area where companies, particularly start-ups, are benefiting is internships.

Vinculum Capital Partners, a year old investment bank, has got an intern from IIM-K to work for them without any major cost. “This is the best time for start-ups for picking up talent.” said founder Samresh Kumar who has graduated from IIT and IIM.

With heavyweights across sectors laying off people, small and medium sector enterprises have got access to this talent pool. Some of the beneficiaries of this phenomenon include Amada, a Japanese equipment manufacturing company, IMS, a leading coaching institute and the Federation of Indian Micro, Small and Medium Enterprises.

Amada has hired 4-5 such professionals in the last two weeks with four years of experience from companies that are over Rs 10,000 crore in size. These people have come at a 60% lower salary.

While Amada has 50 employees in India, it employs 9,000 people globally. The company is growing at 50% for the last 2 years. Similarly, IMS haspicked up 10-15 people from sectors like BFSI and retail and it gets hundreds of job requests from IIM-graduates.

Analysts and executive search firms say there’s a clear trend of people across levels and sectors eyeing the SMEs. They are shunning bigger brands as they see signs of a bleak future, either because of shelved projects or cost cutting measures. Consequently, they are searching for firms that are still growing.

“Smaller companies lacked quality talent, but not ambition,” says Ronesh Puri, MD, Executive Access, which has got 1,000 CVs in the last three months from people seeking opportunities. “Hence it’s turning out to be a win-win situation for both professionals and firms as they get options that are majorly linked to their performance.”

All this is attributed to the market scenario that has changed in the last one year. Companies in IT, retail and real estate sectors had been recruiting extensively in times of growth and accumulated flab across levels that became unmanageable in times of cost-cutting.

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