CXO Demand Remains Unaffected in Sluggish Economy
Already reeling under its worst-ever job creation statistics in 45 years, the economic slowdown has further dampened spirits as enterprises are cutting down on jobs to manage their margins. Mid-tier IT jobs were under greatest risk as were low paid jobs in the manufacturing sector, with both tech and auto giants laying off by the hundreds, if not thousands. However, amidst all this bloodbath, one segment of the industry seems blissfully unaffected by the goings on. The C-suite corner-office jobs!
In fact, a report published in the Economic Times quotes executive search firms to suggest that there is actually a spike in demand for such jobs, with pay packets ranging from Rs.100 Lakhs to Rs.150 Lakhs still being bandied about behind closed doors at mid-size enterprises and family-owned businesses and start-ups that are mushrooming with not a care in the world about the obvious signs of a slowing economy. In fact, the report quotes Korn Ferry, EMA Partners and Transearch and Head Hunters to suggest that salaries have gone up by 20% over the past 12 months.
The trend was visible from January this year when the Hindu Businessline reported that CXO demand that included replacements as well as fresh hires, was being fueled by the business need of fixing responsibility to drive sustainable growth on these key officers as the “perform or perish” culture from the United States began percolating industry sectors including banking, FMCG, consulting, e-commerce start-ups, fintech start-ups, IT services and global in-house centers of large multinationals.
Why the Surge?
The immediate answer is simple. India Inc. is slowly getting more Americanized and less European as the hire-and-fire culture sweeps through sectors where stakeholders care for nothing but growth on a yearly basis. This requires getting rid of sub-optimal talent rather mercilessly as was evident by the fact that a larger ratio of CXO hiring in 2019 came as replacements in FMCG and BFSI sectors.
The Economic Times report notes that the current demand came from mid-sized companies and promoter-led enterprises due to the felt need of professional talent that could guide these enterprises to the next level. CXOs having exposure to digital technology fared better in this race as the demand for digital transformation to curtail operating costs is becoming all-pervading across industry.
The Businessline report had quoted Romesh Puri of Executive Access to suggest that roles that saw frenetic hiring included heads of human resource, chief financial officers, heads of sales and marketing and heads of corporate affairs and government affairs. The report had also quoted Xpheno to suggest that growing early stage funding of start-ups had brought about up to 150 open CXO positions early this year.
The Flip Side
The unbridled rush for profitability and growth at any cost is bringing about its own challenges as evident from the series of whistleblower-led issue that the large enterprises have faced in recent times. The question of ethics and empathy seems to have been pushed firmly to the backburner which means the newly hired CXOs would be expected to grow the company at any cost with stakeholders remaining on a very short fuse when it comes to failures.
Another fact that cannot be ignored is that mid-sized companies have found themselves the most insulated from the crisis of confidence in India’s economy. And yet, one finds that the non-CXO levels are finding it tough to retain their jobs or find a decent replacement when the pink slip arrives. Could it be the lack of breadth in our education system, something that the Americans are now talking about?
The challenges that enterprises have faced due to CXO shenanigans too have been aplenty this year. The PMC meltdown and the Infosys whistleblower crisis are two that occurred closer home while globally too one witnessed such shockers, none more than the Thomas Cook demise, which was possibly a lesson for the CXOs, as we had reported earlier.
Given that hiring and firing could be the new normal at the CXO levels in the future, would it be more prudent to impart ethical and emotional leadership qualities to the C-Suite instead of replacing one with the other and biding time before seeking a fresh hire the third time? There is no doubt that the CXOs are the ones that enterprises look up to guide their fortunes, but that doesn’t often translate into better quality levels at the C-suite.
Maybe, this is where the role of Coaching and Mentoring comes into prominence instead of merely hiring and replacing the C-suite when things don’t go as planned. Also, it could be a worthwhile effort for the stakeholders to set organizational goals, but that’s something for another post.
At present, one needs to look into the fact that the C-suite too would become as expendable as was the case with the mid-tier resources in IT companies and the grunt workers in the manufacturing industry. So, in some ways, the trend witnessed in 2019 could just be the calm before the storm that Indian industry could be setting itself up for.