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COVERSTORY
Endangered species

It's your employees we are referring to, not some genus that's crept into the World Wide Fund For Nature's Red Book. In a race to acquire new skills and acquire them quickly, companies are resorting to an age-old practice: poaching.

-By Seema Shukla

The head-hunting firmament

It's 8:00 p.m. on a balmy July weekday in Bangalore. Another one of those quick-but-intense late summer showers has just ended. The traffic isn't very heavy on this corner of Church Street-a modest holler away from the city's arterial Mahatma Gandhi Road-where a pub named after one of Rembrandt's works stands. Inside, it is warm, despite the air-conditioning, and bright. A waiter approaches a booth packed with young software types, and, in a conspiring tone, whispers to a nerd that the 'happy hours' will end in the next five minutes, and should he take an order for, say, three more pitchers. By the counter-the best location if you happen to be alone and in the mood to drink beer by the glass and not by the pitcher-a young software engineer is telling a friend she just made, how her company isn't into e-biz solutions, and how she's wasting her time there. Little does she know that her wish is set to come true sooner than she thinks. The young woman lending a willing ear is a recruiter for one of the city's leading software firms. And the pub's happy hours have been sponsored by the same firm to allow a team of recruiters to case the joint thoroughly and identify potential targets for poaching.

Better believe it. Somewhere out there is a person who knows your employees as well as you do. A man or woman whose computer contains the details of hundreds of fast-trackers in organisations such as your own. The climax of this minor cloak-and-dagger drama could be played out anywhere: in an airport lounge; at a coffee shop; or in respectable, but nondescript, offices. In some cases, a phone call is all it takes. Whoosh! The bright young marketing executive who you knew was destined for greater things-well, she no longer works for you. In a worst-case scenario-as one of the country's top foreign banks discovered to its horror-poaching could mean the competition now knows about your new campaigns and products. That secret business-plan you developed over the last six months-it's a secret no more. In a best-case scenario, it still means a complete denudation of your ranks.

In January, 2000, 38-year-old Luis Miranda was happily employed as the Head of Treasury for HDFC Bank. A routine meeting with an old-time client-one of the country's marquee names in software-changed that. Business done, the software firm's friendly CFO gently chided Miranda for being wedded to banking. ''A man like you has to be in a sector that's changing the world-infotech,'' Miranda recollects him as saying. Soon-the CFO had put out the word-offers started flowing his way. Within a couple of months he said 'yes' to a persistent software firm based in Bangalore. And, in need of some reassurance to overcome eleventh-hour jitters, he met with Chrysalis Capital's Raj Kondur, another client of his. Little did Miranda know that the CFO had already spoken to Kondur about him. Result? In early June, 2000, Miranda joined Chrysalis as CFO.

Another recent big-game hire, that of Swarup Choudhury, a 42-year-old hsbc veteran (18 years with the bank), by IBM, was a shade more Orwellian. Choudhury had been Head of the bank's Transaction Banking section, and Chief Architect of its Asian business strategy, before being asked to take care of the technology aspects of setting up a processing platform for HSBC. His employers noted with relish that Choudhury seemed to be enjoying his brush with technology. Unfortunately, other eyes were watching this. IBM's professional tracking system, a software-based database that keeps an eye on what senior professionals in other companies are up to, noted that Choudhury's affinity for technology, and his knowledge of banking and finance would make him an extremely good hire. In May, 2000, after a two-week long negotiation, Choudhury joined the Big Blue as its Vice-President and Country Head (Banking & Finance).

The game is afoot

No one is safe any more. The recession is a bad dream; the surge economy is upon us; and global placements are a breeze for the best Indian managers. Suddenly, in a country of a billion individuals, finding a few good men (and women) is becoming increasingly difficult (remember the refrain of the ancient mariner?). Compounding the problem are dot.coms which, despite the sudden circumspectness with which veecees are approaching the business of funding, are proving to be highly effective poachers. The madness had its beginnings in end-1999. By mid-2000, companies and head-hunters have, collectively, gone berserk. The ruling logic? It is far more easy (and cheap) to steal the required competencies rather than to develop them from scratch. And who's got the time to do that when the rest of the world is moving ahead at Netspeed.

Thus, when Salomon Smith Barney set up shop in India, it virtually poached the entire wi Carr team. When The Hindustan Times-promoted and Chase-funded horizontal portal go4i.com was looking for a CEO, a head-hunter suggested the head of Citibank's Indonesian operations, Piyush Gupta, be contacted. When Mahindra & Mahindra (M&M) needed an Executive Vice-President for its farm-equipment business, it poached (through executive search firm Amrop) Gautam Chakravarti from Hindustan Lever's chemicals business. And American insurance major AIG picked Citibank's Head of Corporate Banking and Sales, Sunil Mehta, to be the Country Head of its life insurance business. Ask your executive assistant to make a compilation from the pink brigade, and you will come across a hundred other names, a hundred other companies.

Everyone is into poaching: small firms; large companies; closely-held Indian business groups; professionally-managed transnationals; and dot.coms. Scrape away the veneer from all companies till you arrive at the core, and you'll find the same thing: a desire for quick results. Avers Dilip Ranjekar, 45, Corporate Executive Vice-President, Wipro: ''Today, most companies are trying to cut down on the cycle-time (involved in recruitment) through highly targeted head-hunting. It has been happening for quite some time. But now, it is more pronounced. The dot.coms do it with impunity. Why, even we do our share of poaching.''

Corporate India's great hunt for talent is leaving no one unscathed. Executives who have spent close to two decades building a career in a company are throwing it up for the opportunity to work in a happening sector. Sunil Mehta had been with Citibank for 17 years before a chance meeting with the AIG top brass at a social do in New York set things rolling towards his eventual move. It isn't just senior employees who are targeted: they may be the big game, but no company is in a position to overlook other game (read junior and middle-level employees). Across levels, anyone who's even marginally competent, is sitting on at least one job offer today; the really good ones, more. Exclaims one employee: ''I told my boss: listen, I'm not in the job market; the market is on to me.'' (''You meet people; you must be knowing who's good,'' said a prominent head-hunter even as he made this writer a job offer.)

The dirty tricks department

Anything goes. Nothing is sacred any more. Agrees Ravi Virmani, 41, CEO, Noble & Hewitt, an hr consulting firm that does its share of head-hunting: ''Earlier, people used to respect each others' turf. Now, everyone is becoming more competitive, more mercenary-like.'' Nor is this behaviour restricted to competitors. Executives go for client meetings with elaborate presentations; they return with job offers. Concurs Aadesh Goyal, 36, Vice-President (hr, it, & Corporate Communication), Hughes Software Systems: ''Customers poach even if they have an agreement with the company that they won't.'' The niceties are no longer important. At one time, CEOs may have found it repugnant to poach executives from a company with whose CEO they were on friendly terms. Not any longer: today, CEOs have no qualms meeting a peer for a game of golf before breakfast, and poaching his best people before lunch. Pepsi has a case against Coke in the Delhi High Court accusing the latter of poaching. And in the queerest case of biting the hand that feeds you, head-hunters even stoop to poaching from their clients. Santrupt Mishra, 35, President (Corporate Human Resources), Aditya Birla Group, recollects receiving offers from search firms employed by the group: ''There is the ethical don't-attack-clients clause, but some do not adhere to it strictly.''

The bad news: there's going to be no respite. Things can only get worse. Hughes Software, for instance, expects to hire 600 people this year: 300 from campuses, and the rest from the industry. If you are the CEO of a software firm, that could mean your best people. (Do you know where the head of your company's software exports business is right now?) Predicts Goyal: ''I think, this year, for the first time in the software industry in India, there will be fewer people than required.'' Given these statistics, it isn't surprising that infotech is the great white shark of the recruitment game, poaching from within the sector and without. HCL Infosystems Chief Ajay Choudhury picked Tefal's Saurav Adhikari to head the company's Net venture, hcl InfiNet. Avers R. Ramaraj, 49, CEO, Satyam Infoway, which saw its manpower recruitments grow by 550 per cent last year: ''We don't poach only in infotech. We look around for people with extraordinary talent and poach them.''

The good news (there isn't any for companies; it's for employees): Those with what it takes can go anywhere they please. Says Atul Vohra, 37, Partner, Heidrick & Struggles: ''Today, good guys write their own contract and their own cheque.''

Everyone plays this game

Poaching isn't a game restricted to head-hunters and hr managers. CEOs play it too. Thus, when Satyam was looking for a new president, it was Ramaraj who spearheaded the hunt. The first call from Satyam to George Zacharias, then President of Madura Garments, and now President and COO, Satyam Infoway, was made by Ramaraj. Boasts he: ''I called him up. He wasn't interested-said he was doing well at Madura. I told him to meet me; spent time convincing him about the kind of contribution he could make at Satyam. I think this worked out purely because of my involvement.'' Adds Virmani: ''Talent (hunting) is the number one priority of the CEO today. Wherever he goes, whatever he does, this is what he is thinking of.''

Yet, for every Ramaraj who goes on record to state how he poached a senior executive, there are at least 10 CEOs who prefer to remain in the background. Says R. Suresh, 36, CEO, Stanton Chase: ''A CEO will use any opportunity he finds to exchange cards and say 'give me a call' to a person he likes. Normally, candidates approached in this way find it difficult to say 'no' to a CEO. But if a deal is struck, the CEO is almost certain to deny that he made the first move. He doesn't want to be seen as a poacher.'' Think of what it could do to his image in the industry.

Remember R.L. Ravichandran. As the man who was perceived to have turned around two-wheeler manufacturer TVS Suzuki (he was the company's Head of Sales & Marketing), his was a head worth hunting. In 1998, he announced he was leaving TVS Suzuki for Kinetic. The day he landed in Pune, he received an invitation for dinner with the Bajajs (reportedly at the behest of Rajiv Bajaj). In a four-hour meeting, they discussed the future of their company, and the slew of new products that they were planning to launch. A sucker for great products-like other marketing professionals-Ravichandran was sold. He quit Kinetic within four days of joining, returned to TVS Suzuki, and joined Bajaj three months later. There was bad blood all around.

To avoid such poaching, some companies enter into if-you-don't-I-won't agreements. Pepsi and HLL are rumoured to have entered into such an agreement for some time in the early 1990s. However, such agreements are unlikely to be sustainable in the long-term. Explains Preety Kumar, 36, Director, Amrop: ''Such agreements are silly. Good guys go if they get (good) opportunities.''

The cost of poaching

Poaching is for the brave. A company that is involved in it needs to be confident that it can protect its own turf. Even as you're eyeing prime game elsewhere, others have their eyes set on your best people. There's also another aspect to poaching that several companies ignore: it's the impact on other employees in the organisation. By bringing in someone from the outside, you're sending out a message to your own people that there's no one within the company who can fill the vacuum. At least, not yet. In some cases, to avoid heart-burn, companies have been known to create new positions for their existing employees, or hike their salaries, before bringing in someone from outside.

Let's tread on some sensitive territory: is poaching healthy? Won't it hurt the company eventually? Answers Ranjekar of Wipro: ''It depends on which side you are. Retaining people is the organisation's responsibility, and the fact that someone can poach from you means there's scope for improvement in your retention strategies.'' Sure, but an organisation's continued dependence on poaching implies its developmental efforts haven't borne fruit. This, evidently, is one thing that companies must learn from the current crisis. Says Choudhury of IBM: ''There is a pressing need for detailed hr accounting that takes into account the existing skills (of an organisation's employees), and how they can be further developed.''

In the final reckoning, poaching may be a word that makes hr professionals and head-hunters squirm, but it is on the rise. Admits Sanjiv Sachar, 42, CEO, Egon Zehnder: ''The scarcity of people is making companies desperate.'' And poaching is the perfect solution for a company needing to tap into a basket of new skills, and tap into them quick. It's not illegal. It's highly effective. And it's fast. That apart, if you don't poach that marketing whiz you met at the seminar yesterday, someone else sure will. What'll it be?

 

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