India facing shortage of CEOs
Word has gotten out of boardrooms: They are being offered world-class salaries, opulent homes and grandiose lifestyles, but India is facing a shortage of CEOs.
The shortage is creating some high value targets for headhunters—IAS officers and other bureaucrats, who are joining private sector jobs after resigning from the services or on retirement, experts say.
"If you look around, so many companies in India are struggling to find top managers, and, at the highest level, CEOs ... any fast growing company is grappling with the issue of finding good business managers," said Gaurav Lahiri, Head of Operations at the Indian arm of Hay Group, an international management consultancy.
"This is no different from what is happening in Europe and the United States, but there it is due to the ageing societies,"' Lahiri said. "But in India, it is quite surprising."
"Currently we are looking out for four CEOs, three of them in the manufacturing sector. We are not getting the right quality," said Nandita Chander of Proactive Consultants, a headhunting firm that helps recruit senior executives.
Experts say corporate India's human resource crunch comes at a time when chief executive officers are being pampered with salaries that sometimes match the best in the world, and opportunities that are soaring with the booming of Indian business.
"We feel that there is no dearth in the managerial pool and capabilities in India. There is no shortage of potential CEOs," said Charu Mathur, spokeswoman for Confederation of Indian Industry. "But what is perhaps lacking in the system is the exposure to make larger decisions. From that point of view, there is a shortage of CEOs."
The swift growth of India's economy has driven down the age of the average Indian CEO. It was 55 once; it is the 40s or even late 30s now.
Worse, attrition rates are high.
"There are two reasons for the shortage—one, most companies have not taken leadership development very seriously, and two, the way we Indians have been groomed, it is in the Indian DNA that scholastic achievement is more important. It makes us very individual centric," Lahiri said.
A Hay Group study on Indian CEOs conducted over the last three years showed stark differences between Western and Indian CEOs. While Indian corporate executives are extremely intelligent and have deep entrepreneurial skills, the study said, they were found lacking in spotting and grooming talent, and interpersonal skills.
"There is a tendency that people in the mid-30s or early 40s are expecting CEO roles—it is much different from the situation a decade ago. You have to let people grow a lot faster now, or else they have other options," Kartik Bharat Ram, President and Executive Director of multiproducts giant SRF Limited, told Hindustan Times.
SRF makes textiles, chemicals, pharmaceutical products and packaging films.
Talent exists, but "there is definitely a gap between what we have as strategic unit heads and the second rung leadership to quickly take over as CEOs," he said.