iTalent presents “VISION 2013…… A GAME CHANGER” 13th October 2012- Saturday This year’s seminar will focus on the increasing regulatory, economic, and environmental pressures currently faced by the industry, as well as looking at the next decade and how it will be the game changer. — Will the road ahead in 2013 be a challenge? Game changer for the future of the Insurance Industry? From 1st October you can check for Seminar Updates on http://www.talentdiscoveri.com/ Seminar By Invitation Only
Despite continued high unemployment numbers, companies are hiring. Surprisingly, they are finding it difficult to find just the right people for positions that they need to fill. Recruiters, often called “headhunters,” who took a huge hit when the economy tanked in 2008, are reporting that they are now busier than they have been in several years.
Working with a recruiter can be a great benefit in your job hunt, but only if you understand their role in the hiring process. Unfortunately, too many people have misconceptions about what they do, and how to motivate them to be your advocate. It’s time to clear the air and bust some of the myths.
1. MYTH: The Recruiter’s Job is to Help a Job Hunter Find Employment
FACT: Recruiters work for employers, not job hunters. Their job is to find the best talent for the position the employer is seeking to fill, bearing in mind all of the employer’s “must haves,” “should haves,” and “shouldn’t haves.” They aren’t paid to help people to transition to new fields, but rather to find talented individuals who have done the job already in a different context, or people ready to move up to the next level in their same career path. To be sure, they help individuals whom they are able to place, but their primary responsibility is not to be a career counselor or coach for job seekers.
2. MYTH: All Recruiters Are Paid the Same Way
FACT: There are essentially two types of recruiters for full-time permanent jobs:
Contingency recruiting companies aren’t paid unless their client company hires a candidate they submit. Competition among firms is intense. For individual contributor-type positions, employers will frequently offer multiple recruiters the opportunity to work on the same job posting, and only pay a fee to the recruiter who actually finds the right talent.
That said, many contingency recruiters form networks or alliances to cooperate with each other and do “splits” where they share job listings with one side, taking 50 percent of the commission for getting the listing and another side taking 50 percent for finding the successful candidate. This is much akin to realtors sharing commissions for the sale of a home. If a recruiter advertises a search for “my client,” but doesn’t include the name of the client, it is likely a contingency search.
Retained search firms are paid by a company to take on an exclusive role in a given search, with the understanding that they will receive a higher level of service and more complete candidate vetting than is typically the case with contingency firms. These firms are most often utilized for executive level searches. Fees earned for retained searches are generally much higher than for contingency searches, and are paid out at specific points in the search process.
3. MYTH: Recruiters Are Rude and Unresponsive
FACT: Recruiters, like anyone else with very limited time, prioritize who that time is worth speaking with, and for how long. They are likely to be very responsive to clients or potential clients who have job orders for them to fill, and people who they see as strong (potential) candidates for those job orders. They are likely to be much less responsive to individuals who approach them out of a sense of desperation, with a career change in mind, or who are not perceived as “A” class workers.
Most recruiters simply don’t have the time to respond to the hundreds of unsolicited resumes or phone calls that they receive virtually every week. And it simply is not their role to coach people who aren’t a close fit for the kinds of positions with which they work. It is common for a recruiter to make 50 to 100 phone calls each day, and with that kind of volume they simply don’t have the time to deal with extraneous conversations.
4. MYTH: Recruiters Aren’t Out to Get Job Hunters the Best Possible Compensation
FACT: In almost every situation, recruiting fees are pegged as a percentage of the new hire’s first year base salary. The more you earn, the more they earn. Often they have inside information about what the company is willing to pay, and are able to obtain a higher salary than what a job hunter initially thought they could get. Companies do not take the recruiter’s commission out of the new hire’s compensation. Much more often they understand that they must pay a premium for candidates sourced through recruiters.
5. MYTH: Recruiters Don’t Care About Creating Long-Term Relationships
FACT: Recruiters are essentially in a relationship-building business. The successful ones know that their long-term success is based on building their network of relationships. They remember who helps them on one search, and will be likely to want to aid that person later on. They appreciate when a job hunter isn’t a good fit for a current job, but goes out of their way to introduce them to someone who will be. They love the repeat business that comes from gaining multiple job orders from the same company. One surefire way to get a recruiter’s attention and build a long-term relationship with them is to offer to provide the names of people who are strong connectors to others, thought leaders, and high performers in their specialized field.
Not every job hunter will find success working with a headhunter, but if you are accomplished in your field and committed to staying in it, building relationships with recruiters who specialize in your skill set and industry will be a great asset in your job hunt.
Public sector general insurer New India Assurance is likely to post 18-20 per cent gross premium growth in the current financial year, after reaching Rs 10,000 crore mark last fiscal, a top company official said today.
“We will maintain our leadership position. We hope to see 18-20 per cent growth in premium in the current financial year, in line with the industry growth projections,” company’s Chairman and Managing Director (officiating) A R Sekar told reporters here.
“We have not seen losses from foreign operations…it should be a profitable growth,” Sekar said.
The largest general insurer had reported a loss of Rs 412 crore for the first time since its inception in 2010-11 on account of around Rs 300 crore losses from foreign operations.
However, the company swiftly swung back the very next fiscal (2011-12) with Rs 179.4 crore profit.
On growth in various segments, Sekar said, “Both corporate and retail segments are witnessing sound growth rates. But, growth in retail is higher than other segments”.
Any general insurance player who would like to see rise in profit has to concentrate on retail segment, he said.
About hike in premium in health, fire and motor insurance, Sekar said any rise is consumer-specific, which depends on the risk attached.
“I can’t give a number across the board. It depends on the individual policy and risk attached to it,” Sekar said.
New India reached a gross premium collection of Rs 10,074 crore in FY2011-12. While Rs 8,543 crore was from domestic operations, Rs 1,531 crore came from overseas operations.
It had posted a profit of Rs 179.4 crore during the last fiscal.
“The meeting discussed how to increase insurance penetration, how insurance companies can do more business, how better products can be introduced at lower premium, and how more investment can flow to infrastructure sector,” said financial services secretary DK Mittal.
Mittal said there will be another round of meeting to discuss investment and taxation issues. The government is looking to popularise insurance and mutual funds to wean investors away from gold and raise long-term funds for investors.
A government official familiar with the deliberations told ET that insurance regulator has agreed to develop a mechanism for faster approval of insurance policies.
“But the ‘use and file’ process will only be applicable for standard products and the insurers will also have to explain the product mechanism before hand,” he said.
At present, insurers can introduce products only after obtaining the sector regulator’s approval.
Ways to relax investment norms to channelise more funds into the infrastructure sector, bancassurance and process of approval for opening offices in Tier-II and below towns were among the issues discussed.
Exemption of service tax on insurance policies, especially annuities, will be among the key issues that will be discussed on Thursday, another official said. The policies currently attract a service tax of 3 per cent.
Finance ministry will also discuss with IRDA a proposal to allow insurance companies to invest up to 50 per cent of their debt investments in AA-rated paper, as opposed to the current stipulation that they invest 75 per cent of their debt corpus in AAA-rated bonds. At present, 50 per cent of the total investible funds of insurance companies have to be parked in government funds. It has now been proposed that this allocation be lowered to 40 per cent.
Finance ministry officials and IRDA are also expected to deliberate dilution in the 18 per cent minimum alternate tax, or MAT, applicable to non-life insurers.
According to estimates, the investment corpus with life insurance companies is about Rs 13 lakh crore. Of this, only 20 per cent currently goes towards the infrastructure sector. India needs about a trillion-dollar investment in the infra space during the 12th Five-Year Plan (2012-17).
Some of the common factors in these cases include inability to align aspirations with proficiency, failure to do a course correction, over aggression, lack of team skills, poor work-life balance, arrogance and inappropriate mentorship.
“As individuals progress through their careers, they should strive for sustainable growth; growth and development in every sense — physical, emotional, professional and spiritual, says Leena Nair, executive director — HR, HUL.
In order to do this, one needs to set personal goals just the way one sets professional ones and hold oneself equally accountable for both, she adds.
Many a time, a young leader is seen faltering because of unrealistic goals and a hurried approach.
In 2006, a British multinational banking and financial services firm hired a talented young leader to head its commercial banking operations in India. The leader, in his early 40s with extensive experience in banking, was put at the helm to enable the bank attract top talent. Three years down the line, the young leader abruptly put in his papers, amid much speculation about his exit.
“He was an outstanding leader, but just could not manage the monster that he created. He was being aggressive and crazy and was not able to get things in the right perspective,” says a person close to this once highly-spoken-about leader in Mumbai’s banking circles.
A former head of a Kolkata-based residential property, also in his early 30s, tried hard to give shape to a conversion project — manufacturing to real estate — on the outskirts of the city but the project failed due to his aggressive pace, apart from issues on the family side of the business. “He was capable of doing much more but could not manage the commitment on the project,” says a person close to the leader.
“When a young leader does not have a realistic expectation of oneself, he or she could burn out fast. You cannot win every battle,” says Santrupt Mishra, carbon black business CEO and group HR director, Aditya Birla Group. “Being a realist while trying to achieve the best is important,” he adds.
“When people are in a hurry and try to take short-cuts without getting sufficient experience they reach a level where they cannot meet expectations leading to non-performance and failure,” says Dinesh Jain, CEO of Hovers Automotive.
FAILURE TO IDENTIFY STRENGTHS
The failure to identify one’s core competence can lead to an early crash-out. “Be aware of one’s strengths and weaknesses and focus on using the strengths,” says Rajeev Dubey, president group HR, corporate services and after-market, Mahindra & Mahindra.
Jain cites the case a hugely successful global manager and CEO of a multinational consulting company, who decided to take on the role of the CEO of a operations company in the business of manufacturing and marketing. “He was brilliant in strategising but when it came to giving directions in operations to a larger workforce he failed,” says Jain.
INABILITY TO CHANGE
Young leaders sometimes tend to get chained to previous experiences that are not relevant to the current environment. The inability to adapt and learn to work in a change environment can lead to failure of a young leader. “Failure to do course correction and inability to prioritise and focus on key success factors could lead to early burn-out,” says Dubey.
However, there are many who do the course correction successfully, like this young leader who made transition from a consultancy to an operations firm but made his way back promptly as he realised he was not hardwired to take decisions in an environment that demanded quick and multiple decision making in the absence of full information, where he failed.
Citing his own example of having to learn to work in a change environment, Jain of Hovers Automotive, says, “When I moved as a young manager from a large MNC to a start-up it was a big challenge and I had to go through a complete new learning curve that took time”.
Former State Bank of India chairman OP Bhatt has been appointed on a panel that will assist in the search for the next chief of Insurance Regulatory and Development Authority, a move that signals Bhatt’s return to the establishment.
Bhatt was at odds with the Reserve Bank of India on several issues when he headed the country’s largest lender from 2006 to 2011, but with the change of guard at North Block, he seems to be back in favour.
Although Irda chairman J Hari Narayan is due to retire in February, the government is keen to start the succession process early.
Besides Bhatt, former Sebi chairman GN Bajpai,financial services secretary DK Mittal, department of economic affairs secretary Arvind Mayaram and secretary in the department of personnel and training PK Mishra have been named on the panel.
“We have to shortlist one director from an Indian Institute of Management,” the official said. “Once that is done, we will send all the names to the appointments committee of the cabinet for approval.”
Former chairman of Life Insurance Corporation TS Vijayan is said to be the front runner for the post of Irda chief. Vijayan, who was battling corruption allegations, was recently given a clean chit by the Central Bureau of Investigation and the finance ministry.
During his stint at SBI, Bhatt had locked horns with RBI on teaser loans, a home loan scheme that offered lower interest rates in the first few years, and later on provisioning norms, resulting in his gradual alienation from the finance ministry then headed by Pranab Mukherjee.
Soon after Bhatt left, SBI reported a 99% fall in profit in the quarter to March 2011, which was blamed on higher provisioning. The bank had then set aside 500 crore on outstanding teaser home loans on the directions of RBI.
SBI had to eventually discontinue the teaser loan scheme. “Bhatt was in SBI and not SBI himself,” Pratip Chaudhuri, the current chairman of the bank had said justifying the decision.
Some finance ministry officials say Bhatt’s vast experience could have been utilized better by the government after his retirement from SBI.
“There are so many issues such as bank capitalisation, new licences, financial inclusion. In fact, he could have provided more teeth to the spate of circulars that the ministry issued,” one of these officials said.
US-based LeapFrog’s 15% stake buy in Mahindra Insurance Brokers delivers several-fold return
US-based LeapFrog’s purchase of 15% in a key Mahindra & Mahindra Group subsidiary has given the auto-to-tourism group several-fold returns on its original investment and the third such highreturn investment for its investors in less than a decade. LeapFrog, the world’s largest insurance investor for low-income customers, on Thursday said it would buy a 15% stake in Mahindra Insurance Brokers for . 80.41 crore. This firm, which is a subsidiary of the much bigger and better known Mahindra & Mahindra Financial Services, was started in 2004 for a measly . 50 lakh. The LeapFrog purchase values the firm at . 520 crore. LeapFrog specialises in investing in companies that cater to rural markets. “We feel very proud that we invested . 50 lakh and today it is valued at . 520 crore,” said M&M Chairman & MD Anand Mahindra, in an interaction with ET. “This is a very clear adjacency if you look at the businesses of our group,” he said, adding that LeapFrog is funded by the likes of JPMorgan and the investment vehicle of George Soros. The investment marks the third such multi-bagger or high-return investment for the group in the past eight years after M&M Financial and Tech Mahindra, the group’s listed technology arm. Since its listing in March 2006, M&M Financial has delivered a return of 295.7%, with market cap rising to . 8,232 crore from . 2,004 crore. Tech Mahindra, which bought Satyam Computer Services in 2009 and merged it with itself this year, has generated a return of 146.86% since its listing in 2006 at . 365 per share. Its share price today is . 901.05 per share with a market cap of . 11,498 crore. “M&M has done possibly all the right things. It has diversified in essence into areas that are large in size and segments that are still open spaces in India,” says Nikhil Vora, managing director of IDFC Securities. LeapFrog will help Mahindra Insurance design low-cost health insurance products, another adjacency that the group expects to pry open in the coming years. The US-based company helps companies with deep distribution network to design products that will reach into low-income and excluded markets. When Mahindra Finance was launched, it was a “plain-vanilla NBFC”, said Mahindra. The listed NBFC has now grown to be “arguably the largest rural NBFC in the country”, he added. Over the years, M&M has been treading slowly testing out adjacent businesses across sectors. M&M Has Been Testing New Waters
Over the years, M&M has been treading slowly testing out adjacent businesses across sectors. From making tractors and utility vehicles, it now makes components, generator sets, trucks, twowheelers, boats and aeroplanes. Some eight years ago, Mahindra explained the group discovered that it had created a network or a pipeline into rural areas of the country.
“We started looking at how we can enrich our own offerings and provide more services and value offerings to our rural customers and launched a slew of offerings,” Mahindra said.
The new alliance and other businesses will see a full suite of offerings from Mahindra Finance, including a rural housing finance company and distributor of mutual fund products in rural markets.
“At the group level, they have looked at adjacencies. Tapping adjacencies is a wellestablished strategy for growth. It helps companies to leverage their capabilities and also optimise their access to customers and thus provide value to their customers,” said Rakesh Batra, national leader-automotive sector, Ernst & Young.
The group has also been careful about not extending itself into unrelated areas and has instead focused on tapping its strengths in existing areas and expanding its reach.
Bharat Doshi, member on the board of M&M who controls the purse strings of the group, said the group didn’t need funding for the insurance firm. What it did need was expertise to design products for the rural markets. LeapFrog has its band of actuarial, insurance and financial sector experts who are able to bring in the expertise to help the company take the next leap, he added.
For LeapFrog, it is their second investment in India. The first was in 2011, when it invested in south-based Shriram Capital. “We focus on companies that serve low-income customers,” said Andrew Kuper, president and founder of LeapFrog. “We operate in Asia and Africa and focus on companies that specialise in serving low-income or excluded customers,” he said.
Kuper said his firm’s investment strategy was to help build the business for five to seven years and then exit at the time of an initial public offering or sell it back to the promoters.
“If you look at this company… the exciting thing is that only last year it added 7 lakh policies… if you look at a household of five people it covers 3.5 million people… and on an average they are earning . 1-3 lakh a year,” he said.
The decision to allow FDI in retail has spurred action in the search and placement market. These are early days yet, but recruitment firms have gone into a huddle to ensure they bag the mandates from retail companies about to enter India.
Names have been sent to parent companies on domestic retail and supply chain heads, who can be poached. Staffing and executive search firms such as Kelly Services, Randstad, Ikya Human Capital,TeamLease and Maxima Global, have all had urgent calls with their global heads and discussed strategies to outdo their competitors.
Staffing firm Kelly Services is banking on its parent company, whose ties with retail chains will help it gain an edge over others. “We were anticipating this for the past three to six months and are ready,” says Kamal Karnath, MD. “Most retail firms prefer to work with agencies they know. This gives them better pricing and greater accountability. It is easier to add another country to the list than hunt for a new partner,” he adds.
Kelly India has had calls with its offices in France, Italy and the UK where most of its global retail clients are headquartered, and sent them names of senior managers in the fast moving consumer goods and retail sector in India. For the supply chain, Karnath said, his team would look at expatriates from Australia where goods are transported over long distances, similar to India. Heads in China are also on the radar, as some clients may prefer to hire the top brass with experience in the retail sector in another emerging economy.
The retail sector is expected to grow at 10% to 12% per year, and according to Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The $450-billion industry is the second largest employer in the country after agriculture. Around 6% of the 450 million Indian workforce is part of this sector and this strength is expected to increase by another 12 million in the next 10 years, according to the Indian Staffing Federation (ISF).
Staffing firm Randstad’s global client solutions team is expected to present sourcing capabilities of its Indian arm to its customers, and internal meetings have explored various hiring models for global firms, says Aditya Narayan Mishra, GM Staffing for Randstad India.
The staffing firm, unlike its competitor TeamLease, does not have any joint venture with a skill development firm, and such alliances could be on the anvil. “Hiring firms will now have to penetrate deeper and attract candidates at minimum cost without compromising on quality. And partnerships with training and vocational development firms will be a platform they will need,” says Rituparna Chakraborty, VP at ISF.
Those without a global parent, like in the case of TeamLease, are planning to negotiate with their existing Indian clients like Tatas, Reliance, Bharti, hoping that retail joint ventures done by them will bring in more hiring mandates. “We have started talking to our clients and said we can offer services besides temporary staffing and our pan-India network should work for us,” says Sangeeta Lala, VP TeamLease.
Some are scanning a niche crop of executives, hoping they would be the right fit for prospective clients. Executive search firm Maxima Global is betting on ‘returning Indians’ rather than expatriates who will be roped in to manage posts of country heads once global chains mark their entry. Those with experience in supply chain, project management, agro business, mergers and acquisition and retail consulting will be part of a company’s initial team in India, expects the search firm.
“Returning Indians would be easier to hire and will prefer working for firms they are aware of rather than an Indian companies. Also, for a client, this lot will fit the profile since they come with the experience of both worlds and are aware of ‘eco-friendly’ models, which can be a priority for many global chains, says Srinivas Nanduri, partner, board and leadership hiring for the Indian arm.
However, there is another school of thought, which believes that highlighting domain strengths is the best bet, rather than chalking up new plans. Recruitment company Ikya Human Capital Solutions is hoping that their three-pronged capability, which includes hiring for temporary staff, permanent workforce and captives of retail companies will make them more attractive than their peers. “Domain strength over years will be of use and anyone who says they have a new strategy so early in the day is taking a shot in the dark,” says Ajith Issac, MD and CEO.
FDI in retail is estimated to create approximately 4 million direct jobs and 5 million to 6 million indirect jobs, including contractual employment, within 10 years, making it the largest sector in organised employment. New jobs will be added in the sector and cross-industry pollination will be a natural corollary, says Venkataramana B, president- group HR, Landmark Group India, which runs the Lifestyle department stores and Max Hypermarket in India.
“We are already seeing people coming from hospitality industry in retail industry and that will intensify further,” says Govind Shrikhande, MD at Shoppers Stop. Attrition will hit the front-end as well as back-end, he says, adding prospective hires will now look at more than pay hikes and short-term benefits.
Hirers often complain that their young workers jump ship quickly.
A study published this summer in the Harvard Business Review confirmed that young top performers – the workers that organizations would most like to stick around – are leaving in droves.
Researchers found that high achievers, 30 years old on average with great school and work credentials, are leaving their employers after an average of 28 months.
Furthermore, three-quarters of them admit to sending out resumes, contacting search firms and interviewing for jobs at least once a year during their first employment. And 95 percent said they regularly watch for potential employers.
Multiple studies find that today’s younger workers have absolutely no intention of sticking around if they don’t feel like they’re learning, growing and being valued in a job.
Beth N. Carver, a consultant who has spent 12 years researching exit interviews, finds that a loss of training opportunities and a lack of mentors in the workplace are two of the biggest reasons why young workers leave.
“Companies need to recognize that these young workers are very mobile,” Carver said. “They have to understand that they want a personal and clearly articulated career path.”
With their social media skills and easy access to job postings on the Web, they don’t have to work hard at all to find new opportunities, Carver said.
“Sometimes changing jobs is about money,” her exit interview research reveals. “Sometimes it’s because the job isn’t what they thought it was going to be. More often, they weren’t getting the personal attention, the mentoring, the coaching, the training they wanted.”
This is different from earlier generations, Carver said.
“Companies need to recognize that young high performers want someone to hand-hold them a little bit, to work through what’s the best place for them in the company,” she said. “Understand that they expect collaboration, and they want mentors who will help move along their careers a little more quickly.