CEO Attrition in Indian Firms at 84 Percent
Date: Tuesday , December 08, 2009
Whether it is an established MNC, aggressive startup, a stodgy family-run business, or a new age retail business, CEO poaching has become the latest game in town, as a burgeoning economic recovery and intense competition turn them into high value targets. Indian firms saw a staggering 84 percent rise in CEO attrition in the first 10 months of the current calendar year.
And the banking and financial services sector alone saw its churn rate rise by 74 percent compared to the year before. Banking and financial services, which is growing at a fast pace in the country, saw the highest increase in turnover, followed by the BPO sector. “The churn in the CEO market was because a lot of Indians from overseas came back. They were available at a lower cost with much higher experience. So, many CEOs were replaced with them,” says GC Jayaprakash, Principal Consultant of Stanton Chase International.
Also, Redileon Search Partners, an executive search firm, surveyed around 1,000 CEOs from the companies top-listed in Bombay Stock Exchange and found that almost 106 top honchos left their companies this year seeking greener pastures. “Faster churn is an empirical management barometer for economic growth, when the 2009 full-year tally is completed, the total will be higher than ever before,” the search firm says in its findings. The survey also says that the CEOs who exited found a new job, and about 12 percent of the CEOs who separated this year are still looking for a job. Of the 106 CEOs who exited, about 33 were cases of involuntary exits.
Apart from an improving economy that triggered the churn, the top honchos’ craving to get back to their sectors of choice was also responsible for many of the exits. However, many CEOs who left large companies have joined smaller firms in emerging sectors. While Reliance BPO President Rajnish Virmani joined as Director of India operations at COLT Telecom, Satyam BPO Chief Venkatesh Roddam joined Taurus United, a Bangalore based group. Grasim Industries President and Deputy CFO Sanjiv Bafna left to join Sivasankaran’s telecom venture as CFO.