Head-hunting cos rake in moolah with CXOs
The reasons for these sky-rocketing commissions are the growing packages that top-level management draw, competition.
By Sushmita Mohapatra & Thanuja BM, TNN |
BANGALORE: Head-hunting firms in India are hitting the jackpot with CXO-level searches. As finding the perfect CXO for a company gets tougher, the returns of finding one seem to be getting bigger too.
Sample this, some leading search firms are making anything between Rs 35-40 lakh on a single CXO search. This, when search firms in India do some 15-20 CXO placements every month consisting of salaries in the Rs 1 crore and above bracket.
While the obvious reasons for these sky-rocketing commissions are the growing packages that top-level management draw, competition among search firms for the best talent seems to be setting new highs.
Says ABC Consultants CEO Shiv Agrawal, “With international search firms entering this arena, the earlier commission percentages of 20-25 % has now easily gone up to around 35-40% in some cases. Also the services we offer include HR consultancy, reference checks among a host of others.”
Agrees Adecco India CEO Ajit Isaac, "Previously the commissions were negotiable and were in the lower 20% range. Now they are north of 30%." Stating that top global agencies in India generally charge 27-33% as commission, Priya Chetty-Rajagopal from Stanton Chase International, however, says 40% as commission is difficult.
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Typically, search firms in India work on retainership basis. An advance is paid when the mandate for a search is given with the rest being paid when the candidate joins the company. Overseas, many search firms are paid on timelines. For instance, if a search firm abroad has been hunting for a CXO for 30 days, the fee is X amount, which goes up if the duration increases to 2 months etc. The demand is only set to get bigger in times to come. "With new sunrise sectors and growing need for talent, the demand for seniorlevel vice-president positions is expected to be around 5,000 plus and these are all salary packages above 50 lakhs or more," said Teamlease vice-president Sampath Shetty.
On a new high
Reasons for sky-rocketing commissions:
▪ Growing packages that top-level management executives are drawing
▪ Increasing competition among search firms for the best talent
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