You are using an older browser version. Please use a supported version for the best MSN experience.

Headhunters seek to add to their tribe, banking on the Modi effect

LiveMint logoLiveMint 27-05-2014 Arundhati Ramanathan

Mumbai: India’s executive search firms are doing what they do best, searching, with one difference—their primary aim is to add to their own ranks.

Firms expect a boom in senior-level hiring, with a new and stable government in place. Search firms such as Egon Zehnder, Korn/Ferry International, Executive Access Ltd, RGF Executive Search and EMA Managing Partners are looking to increase their own staff strength by at least 15%.

That may not seem like a lot, but it is in the executive search business, where a small number of well-networked recruiters leverage long-standing relationships to find and place top executives.

The hiring is in sharp contrast to what happened last year when the business shrunk by around a third for many firms as the economy slowed, business confidence dipped, and more large projects got stuck for reasons ranging from issues related to land acquisition, funding, fuel, or environmental clearances.

Ronesh Puri, managing director of Executive Access, said that the size of the search business declined by 30-40% for most firms.

The election of the Narendra Modi-led Bharatiya Janata Party has enthused investors and companies, who see the party as being more business-friendly. The stock markets had run up ahead of the results in anticipation of a victory for the party.

As a result, search firms expect infrastructure, manufacturing, power and healthcare companies to go on a hiring spree. “C-Suite hiring is going to keep increasing as Indian companies are investing in growth and building a global footprint” said Govind Iyer, consultant with Egon Zehnder in Mumbai, New Delhi and Bangalore.

That means a good time for a business that had a horrible 2013.

“Pricing came down by 10 to 15% and sometimes we worked on fixed fees,” said R. Suresh, managing director of RGF Executive Search India, which hopes to hire 20 people to add to its existing staff of 35.

This year, some of the search firms are predicting that senior-level hiring across sectors will grow by 30%, and their own revenues will rise 40%.

Indeed, the Monster Employment Index for April showed that the online demand (number of job opportunities advertised on websites) for hiring senior management professionals was up 51% in April from a year ago, the third monthly rise, after charting successive declines between January 2013 and January 2014.

Some search firms are also working on ways to make the most of a good thing by reducing the time they usually take to fill positions for their clients. “Searches sometimes go on for more than six months; we are hoping to close everything in three months, as speed is becoming increasingly critical,” said Puri.

The boom will also mean good times for searchers themselves, said Suresh of RGF. “Overall, during boom time, salaries will increase by 50%”.

More From LiveMint

image beaconimage beaconimage beacon