Bhaskar Pramanik , MD of Oracle India; Ravi Venkatesan , chairman of Microsoft India; Girish Paranjape and Suresh Vaswani , joint CEOs of Wipro; and Ashok Soota, executive chairman of MindTree . In the past few weeks, all these titles became redundant. These high-profile exits have raised a buzz not just in the executive hiring circles, but in the industry at large.
At a time when attrition levels are running high across levels, multiple senior-level exits in quick succession are bound to see a ripple effect on the industry and employees, human resources practitioners say. There is no denying the tremendous influence a leader has on the functioning and the culture of an organization. As one Wipro middle management employee says, “We’re expecting major changes in the new financial year.”
However, people quitting at that level need not necessarily be a bad thing. “It is a good opportunity to bring in a fresh set of ideas and perspective that work well for the company,” says J K Agrawal , head of BTI Consultants , the executive hiring arm of Kelly. “While it may seem like an upheaval initially , people are able to see the positives in the long run.”
Often, what makes a difference is the reason why those in leadership roles quit. “Sometimes, the role in the company no longer aligns with the individual’s career plans. The market today is so full of opportunities that it seems only fair that if people at other levels can hop, so can they. Then there are those who have the entrepreneurial urge. Of course, in some of the recent cases, it has been about people taking responsibility for their actions,” says Priya Chetty-Rajagopal , VP of executive hiring firm Stanton Chase. “It is the reason that determines the response of the employees and industry at large.”
The more important issue for the company then becomes , ‘what next?’ or rather, ‘who next?’. While most companies try to look for candidates internally, like Wipro has done, some use the opportunity to bring in fresh talent from outside, like Microsoft India seems to be doing.
“Hiring someone internally has its advantages. You don’t have to give them a huge pay hike immediately and, more importantly, they’re familiar with the culture and the functioning of the company,” says Chetty-Rajagopal . “Also, you’re sending out a message to employees that consistent performance and loyalty does have its rewards.”
When hiring someone externally, companies need to cough up anything between 20-40 % pay hike. “The downside to that is that, a huge chunk of the salary for the new candidate is performance linked and variable . This adds to the pressure from day one,” says an HR executive.
There is also an associated threat that when a top boss leaves, he takes his favourites along with him.