Laid off CXOs are much in demand as companies look to hire execs with proven track record
Mar 2, 2024
Synopsis
Often roles become redundant as an outcome of consolidation, mergers, restructuring of businesses, regulatory hurdles or funding delays, and top executives who lost jobs due to industry dynamics and uncertainties form a critical talent pool for other companies across sectors, said the officials.
With an all-time high churn at top management levels and CXO searches getting unusually long, many Indian conglomerates and large companies are looking to hire senior executives who may have been laid off for reasons beyond their control, top HR heads and leadership search firms said.
Often roles become redundant as an outcome of consolidation, mergers, restructuring of businesses, regulatory hurdles or funding delays, and top executives who lost jobs due to industry dynamics and uncertainties form a critical talent pool for other companies across sectors, said the officials.
Such candidates have a proven track record and may not have a long notice period to serve. Besides, with compensation levels skyrocketing and C-suite professionals becoming increasingly and “unrealistically demanding”, this talent cohort is easier to manage in terms of their salary expectations.
“Sometimes you buy distressed assets at attractive valuations. This is also something similar…it is top quality, critical talent for companies especially at a time when the leadership search market is vibrant and CXO talent is in short supply,” said the HR head of a leading company in the services sector, who did not want to be named.
“With startups having lost their sheen (and amid) the very real funding winter, many high-calibre C-suites leaders have lost their jobs. With India Inc on a hiring spree, these professionals are not just being picked up, but companies are looking at proactively hiring from this niche talent pool,” said Jyoti Bowen Nath, managing partner, Claricent Partners.
“When we know there are very competent professionals looking out, we do not judge them just because they do not have a job due to reasons that are not in their hands,” said Niren Srivastava, group chief HR officer at Motilal Oswal Financial Services. “Many of these people are with good pedigree and great track record. In the current market there are a good number of such experienced and skilled professionals available and that’s definitely a valuable talent pool,” he added.
“In fact, when we hire someone, especially in the senior management level, there is a much more stringent reference check that goes into the hiring decision. In some of these cases (of laid off CXOs), their competence and value is already known in the market as they are from marquee companies where they were playing a very critical role,” said Srivastava.
“Senior talent from companies like Amazon, Google, Meta, Paytm, Flipkart and many of the Indian tech bellwethers and tech startups are much in demand,” said a search industry executive.
“Often mandates are discussed where the brief is to look at talent from companies in distress and this cuts across sectors,” said Nath of Claricent Partners.
Experts, however, pointed out to the need of a greater due diligence to differentiate a candidate who was a victim of organisational issue from one who has performance or other ethical issues.
“I don’t think there is any taboo attached,” said S Venkatesh, group president-HR at RPG Enterprises. “Employers do not go by one stint in a difficult company which is controversial or whose founders are controversial and such professionals are always given a benefit of doubt. Of course, companies will do their own due diligence whether there was an issue with an individual or the person is out of job due to external reasons,” he added.
“When very good companies let go of people, they are in demand. However, where it gets tricky is to know whether it was genuine restructuring or performance related,” said Shiv Agarwal, managing director of executive search and talent advisory firm ABC Consultants. “While it could be a good pool to target due diligence is important.”
[The Economic Times]
