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NEW ECONOMY Who's Driving The Services Boom?? Services businesses like healthcare and insurance that will need at least 5 lakh professionals in the next year are pulling out all stops in the scramble for people. By Ashutosh Sinha
It isn't capital, although angels and veecees are relatively new words in the vocabulary of business. It isn't demand, although increasing affluence and zooming discretionary incomes have created a new breed of willing customers. And it isn't the customers themselves, although, circa 2000, that species has reached a level of maturity that bodes well for these businesses. Each of these may have had a part to play in the origin of new service-industries like organised retail, convergence, insurance, and healthcare. But the fuel-of-choice of these businesses is labour. All service-businesses are skills- and, consequently, people-intensive, and it is the ability to identify, tap, and pump the reservoirs of these skills that is often the decisive variable. Crunch through these numbers: the business of organised insurance, estimates the Ritu Nanda Insurance School (RNIS), will require at least 200,000 trained workers in the year 2001; organised retailing 50,000 (industry estimates); healthcare 50,000; and convergence, over 200,000 (NASSCOM and industry estimates). The demand is likely to manifest itself across levels-junior, middle, and senior management-and functions. It's a veritable scramble for talent and the process of finding human fuel won't always be easy. ''It shouldn't be a problem to find people for lower level functions,'' concedes Deepak Gupta, Managing Director, Korn Ferry, ''but a lot of the skills that companies are looking for at the senior level are available overseas.'' Seconds Nripjit Singh 'Noni' Chawla, the CEO of Max Healthcare: ''Since all organised healthcare was the government's responsibility, there was never any effort to breed managerial talent that could develop a business.'' That's true, albeit to a lesser extent, of a business like insurance too. And although telecom has now acquired the stature of an established industry in India, it is slowly morphing into a convergence sort of play where everyone from born-again journalists and corporate-type film producers to customer-support executives and concept-marketers are in demand. Tough it has been, but companies operating in these new age businesses and the head-hunting firms that are never too far away from any opportunity to poach or place (did someone just say vultures?) have found ways to crack the puzzle. The old rules of hiring do not hold true for these businesses: there are not too many campuses that produce an assembly line of floor managers; and experience isn't something about, which a company in a nascent industry can be concerned. Were they to follow these antiquated precepts, the companies that are entering the insurance business will have to be content with poaching employees from the public sector insurance behemoths (and everyone knows what that means). Some hr mavens suggest drawing up a skill- or competence-profile of the individual required to fill a post, and then looking for people with similar profiles in other industries, a technique that could well throw up some surprising results. A company that draws up an identi-kit kind of profile of a logistics professional it needs could well find one of Mumbai's famed Dabbawallas fitting the bill. Others recommend looking at other industries that require similar skill-sets. Either approach, or both together, could work. As could several other strategies from tapping established pools of service talent like FMCG companies and the armed services (every retired serviceman considers himself great manager material, if that's any help) through building specialised training institutes to convincing global managers of Indian-origin to return to their homeland now that things have changed. And if all else fails, emerging service businesses can look to traditional ones like financial services, banking, and hospitality (see Where They Come From). Thus, when AIG was looking for a CEO for its insurance venture, it identified Sunil Mehta, who'd spent over 14 years in various functions at Citibank, including the last as head of coporate banking. And tired of the poor quality of retail-specialists it was being forced to hire, the RPG Group decided-this was as far back as 1996-to build a retail school of its own. CBS: The Old Troika
In the bourses, it is ice (Infotech, Communication, Entertainment) and TMT (Tech, Media, Telecom); in the services biosphere, it is CBS (Consumer products, Banking, and other Services)-and has been for some time. It is customary for any new services business to make the rounds of consumer products companies in search of marketing pros. Look over the walls of any company, from a pure convergence play to a healthcare hot-shop, and you're certain to encounter someone who's built a career selling soaps, coloured water, or photocopiers. A sampling: Atul Joshi, once a marketing manager at ICI paints, is now handling agency development at Max New York Life; Sanjay Kapoor, formerly with Modi Xerox, now makes a living out of hawking airtime at Airtel, and Vishal Chaudhary, who once sold tyres at Apollo, is now vice- President at Max Healthcare. ''Executives from the FMCG sector are very good,'' says Sanjiv Sachar of Egon Zehnder, ''A professional with a good understanding of the market can sell most products.'' And a good relationship manager, the likes of which can be found in industries like banking and hospitality can build a relationship-the essence of all service businesses-with anything from a deaf fire hydrant to a frisky baby elephant. Indeed, when Max's Analjit Singh found it difficult to identify a CEO for his ambitious healthcare start-up, he decided to sort of flip the paradigm and hire a head-hunter, albeit one who had been a senior manager in the hospitality industry before that. And that was how Chawla found himself as head of Max Healthcare. Hiring someone from CBS may not always help. Some emerging service business require significant domain knowledge not just in line functions, but also in areas like marketing and finance. Besides most companies operating in the CBS firmament have established work practices and systems. Managers from such an environment may not always succeed in the uncertainty-heavy atmosphere of an emerging business. Agrees Uday Chawla, Partner Heidrick & Struggles: ''People from FMCG companies stand out very positively and have the skill set to do well in the services sector. But that is not the only recipe for success.'' The Training Bug
In the hierarchy of corporate ambulance-chasers, professional trainers come just after head hunters and consultants. Almost overnight, a rash of training schools that promise to equip individuals with what it takes to thrive in emerging service businesses have sprung up. These include insurance schools like the ones run by Escorts first-woman and former star insurance agent Ritu Nanda and the Actuarial Society of India, an actuary-training non-profit institute; single industry focussed business schools like the Symbiosis Institute of Telecom Management; and re-purposed (note that word; you'll hear it again) training schools like the National Institute of Sales (NIS). Some of these rapid-learning centres are the progeny of entrepreneurs and companies that are out to make some money from a market opportunity. And some, like RPG's retail school and another institute focussing on the same area sponsored by consumer durable retail chain Vivek's (it's big in the southern part of the country), have been set up by companies that have realised that it is in their best interest to create a captive talent pool from which they can hire. Chennai-based Apollo Hospitals belongs to this breed: it actually offers a two-year programme in the management of healthcare services in association with the Charles Stuart University (Australia). And Max Healthcare has a set of 42 training modules that its hires have to master as part of their training programme. Still, training isn't a panacea. Its utility is restricted to (almost always) entry-level positions, as well as those that require expertise that can be taught (and learnt) quickly. ''Juniors are easier to find (than senior executives),'' rues Preety Kumar, Managing Director of the executive search firm Amrop International. That could explain why some companies prefer to hire expat- execs as CEOs. Jet Airways' Steven Forte (previously with Olbia, a regional airline in Italy) is a case in point. As is Philip Bishop, head of merchandising at Trent Ltd (formerly Lakme) who previously headed merchandise finance at Target, an Australian retail chain. Emerging Rules Of The Thumb
Despite the largely ad-hoc way in which most companies in emerging services and search firms go about hiring people, there are two rules of thumb that guide most recruitments. There's no substitute for experience in positions that require functional expertise. A job that requires a high level of expertise in a niche area of specialisation isn't something that can be done by someone who's been trained in it for a few months. Positions like these require people with experience. All one has to do is look hard enough. For instance, when BPL Mobile was looking for a Chief Technology Officer, it realised that the only place in India where someone could have learnt the kind of things it was looking for and had some practical experience in managing them was the army. Today Colonel (retd.) V.K. Sethi, formerly the Director of Radio Engineering Networks, a defence establishment. The service offering defines the kind of skills required. Selling life insurance isn't quite the same as selling soap. Says Atul Kumar, Partner, Amrop International: ''In 10 minutes you can sell any FMCG product, but selling life insurance is altogether different.'' Ideally, the unique characteristics of the service offering-relationship-oriented and distribution-heavy in the case of insurance-should determine the skills the recruiter looks for in a potential hire. Not surprisingly most new insurance companies have hired CEOs from the banking and financial services industry. The reason? The wish-list of preferred CEO-characteristics in this sector includes things like a working knowledge of finance, an understanding of how the financial services business operates, and the ability to deal with the external environment (mainly the regulator in this case). The one thing that makes the task of companies and head hunters a little less difficult is the change (actually, it is a mere suggestion of that right now) sweeping through India Inc.: across the country managers from backgrounds as diverse as manufacturing and mining are repurposing their skill-sets and repackaging themselves in an effort to jump-start their careers in businesses that are just starting up. Take P.V. Ramaswamy for example. The man spent 18 years in Godrej in the marketing department. Today, he is Veep (HR) at the retail chain Vivek's. That, though, is a trend in the making. So consider the last part of this feature as the preview of another story in the making. Additional reporting by Nitya Varadarajan & Shilpa Nayak |
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It isn't
the opportunity, although these are businesses that have just emerged from
the confines of a regulated environment.