Over last 12 months, recruitment across various sectors including mutual fund industry had come to a standstill, as global financial crisis hurt sales, dented order books, forcing companies to resort to cost cutting measures. Mutual fund industry was impacted as well and froze all their hiring's post the meltdown but around Q4 we observed markets picking up and showing some signs of life. Mutual Fund companies started hiring towards Q4 but much of the new hires were observed in sales and service functions and not so much at senior level.
2009 also witnessed some major changes in the functioning of Indian Mutual Fund industry with SEBI bringing about new regulations altering the manner in which fund houses and distributors sold Mutual Fund schemes.
Thanks to uncertainty in the market, employee turnover in almost all the companies reduced drastically over last 12 months. Employees were not changing jobs and trend was "stay where you are". Passive job seekers were just not interested in new opportunities. For active job seekers, the opportunities in the market were not too many and the offers were not lucrative in terms of compensation package.
Key Hiring Trends Pre and Post Meltdown
- As number of AMCs mushroomed (from 9 in 1993 to 39 in 2009) over the last 6 years, the mad rush to attract talent resulted in compensation ranges shooting through the roof. Most of the new entrants used significantly higher compensation as a tool to attract ready talent and the industry witnessed unprecedented salary inflation.
In the economic downturn of 2008/09, when margins got further squeezed in an already wafer-thin environment, sustainability of such high manpower cost, along with increasing spends on marketing and distribution put severe pressures on the very continuity of many AMCs.
- Along with the economic downturn came the realization of rationalizing costs. Manpower Costs, being a key contributor to the overall cost structure, witnessed a restructuring in many AMCs. Variable component, which was linked to growth, almost vanished in most of the companies. The most troubled lot was those who were standalone mutual funds, and who did not have linkages to a bigger financial entity like a bank.
- Many of the new entrants, who got their licenses in 2008 and 2009, took advantage of this downturn, by attracting available talent at a substantially lower cost. However, the period witnessed large scale resistance and apprehension from candidates to experience untested waters and move into new ships.
- The mutual fund industry in India today is at a threshold of some sorts. While the outlook continues to be extremely positive in terms of AUM growth; ability to maintain profitability, building investor trust, evolving innovative systems and products, devising smarter strategies to reach out to a wider customer base through continuous customer engagement, enhancing financial literacy and most importantly, building a respectable brand would distinguish the front-runners from the also-rans.
Going forward, with pressure on capital, growth is going to be lower. As a result, retaining key talent and motivating them would be a challenge the industry has to contend with. As the CEO of one of the leading AMCs puts it "Talent always comes as a result of the organisation being able to show both professional and financial growth to an employee. With expansion plans being put on hold, it may be a challenge for the AMCs to show growth on both fronts to the people in near term."
Talent Engagement Key Drivers
With economic activity coming back to it's normal state, businesses all over are feverishly competing for people. Not even companies with established global experience can depend on past success in meeting their staffing needs.
Therefore, companies should understand the factors that differentiate the successful from the rest in retaining the talent in a state of deep engagement.
Brand
Employees are more attuned to brand especially when brand is associated with leadership, the kind that challenges employees to develop themselves as leaders and to help build a great company that plays a global stage.
Opportunity
Opportunity implies accelerated career track to senior positions. High potential employees often make lateral moves as long as skills and experience, is in sync with market growth.
Purpose
Candidates / Employees prefer a company with a new business model, which can contribute towards new growth and economy
Culture
Employees must be rewarded for reasons of merit. The ability of an organisation to identify, develop, engage and grow the right talent is central to inculcating a high potential culture. This ensures healthy competition as people in the organisation become aware they are critical to the company's success.
Brand, opportunity and purpose can create competing promises but in such a competitive market the temptation is to over promise just to get people in the door. Failure to deliver will hurt current employees and have an adverse impact in attracting potential employee
Best Practices in Recruiting Talent
First few months after economic crisis hiring quickly becomes a front-burner issue. Most companies react to hiring situations as emergencies and end up doing it poorly. Organisations have to approach hiring from a rigorous, strategic and objective point of view by developing best practices. As we have observed, some of these are:
Anticipate the future need by evaluating the current talent pool and develop rigorous talent requirement forecasts for the future. Most firms search for senior manager only when there is an opening. Organisations should review their high level leadership requirements periodically and develop staffing plans for top level jobs. It is important to develop a talent pipeline through employee referral programs and external recruiting agencies.
Improving the quality of assessment of candidates can provide better returns than a low cost hire. A good assessment yields more than a good candidate - it can actually improve the company's bottom line and market value in a significant way. The objective of the assessment process is to a) evaluate the candidates, b) to sell the position in the organization and c) build organization consensus on the suitability of the new candidate.
Many executives think that financial compensation is the most critical point in scrutiny. Moreover, it is also about demonstrating to candidates that the organisation is committed to their success. In their desire to close the deal many managers present only the positive aspects of the job. A realistic presentation of both opportunities and the challenges of a prospective position results in higher offer acceptance rates, better post employment job satisfaction, and lower turnover.
The recruitment process does not end after the deal has been closed, although most companies think it does. Many companies hire experienced professionals, expecting them to be "Plug and Play". The most successful firms move quickly on several fronts to orient newcomers to their own departments and to other parts of the firm. Such companies begin integrating new hires during the interview stage before they come to work. The best firms assign a new mentor, a veteran of company's culture to assist until the newcomer becomes culturally literate.
source - http://www.indiaprwire.com/pressrelease/financial-services/2010020442817.htm
less
Post Comments
Add a new to the group
Get regular updates of your group
View other group members and contact
September 2010 
