No New Recruits

THIS recruitment season will see a harsher battle of wits among management graduates. Frenzied hiring bythe financial services sector is being toned down considerably. Even as the slowdown is being dismissed by some industry players as a lull before the storm, it may not go down too well with management pass-outs, anxious to bag high-salary tags. Financial services have been the hottest option at B-schools ever since the economy took a turn in 1991, crowned with the uptrend in salaries kickstarted by the foreign institutional investors (FIIs). Last year, the top 10 paymasters for freshers, barring one, were all financial companies and institutions—with WI Carr offering the highest annual gross packet of Rs 5.4 lakh to a student from Bombay’s Jamnalal Bajaj Institute of Management Studies.

Blessed with a favourable environment, these companies have been honoured with coveted day-one slots for on-campus recruitment. But now with the stockmar-ket at a depressing low, the political environment not so stable, and the financial services industry itself having achieved a certain amount of stability, some non-banking finance companies (NBFCs)—on the capital market front—andFIIs, are taking a breather in hiring people. Recruitment, obviously, will not come to a halt, but the rush the last four-five years saw will certainly die down.

The average entry-level annual salaries in the banking and financial sector, which shot up from Rs 78,000 in 1993to Rs 1.56 lakh in 1995, can hardly be sustained in the face of the gloom in the capital market, if the recruitment rate is maintained. Add to that the political uncertainty which has deferred foreign investment.

"We’ve reached a second stage of wait-and-watch," says Jeyadev Parthasarathy, director at Executive Access (India), a HongKong-based placement company. Says an official of a foreign investment bank who wishes to remain anonymous: "India is not that hot any more primarily because of the uncertain political conditions." The industry itself has grown out of itsinfancy. Companies such as Jardine Fleming and Peregrine are said to have struck a full house for some time to come. The focus is now shifting tostrengthening the teams already formed. "Companies which began recruiting two-three years ago are now consolidating what they have," says Parthasarathy. "The industry has got over with its teenage dalliances," agrees Odette Katrak, head, human resources, SRF Finance. Says she: "Job-hopping in the industry is relatively low now compared to the last few years. The average turnover of people has come down to 10 to 15 per cent this year from 20 to 30 per cent in the last few years. Our company still has the 13 people we had hired last year."

Though most companies do not reveal their hiring plans, the buzz is: only a few exceptions such as GE Capital will go in for significant recruiting. Kotak Mahindra Finance has reportedly frozen recruitment for six months. SRF Finance which was looking for 13 to 15 persons last year is settling for six to eight this year. Even ICICI Securities, arguably thehottest recruiter last year on the campuses, has shortlisted about four campuses. Last year, it visited seven.

The slowdown may be temporary. The industry is expected to pick up steam with the imminent investment in power and telecom. "The telecom sector alone expects Rs 100,000 crore in investment in two years from the time when the licences get released," says Parthasarathy. This kind of liquidity will require top-class financial-engineering acumen. Those waiting in the wings for the political clouds to clear will pep up the demand for finance professionals further. Already about 55 FIIs are waiting to get registered by the Securities and Exchange Board of India.

Some firms may be shying away fr om campuses for other reasons. One, those relegated to the last few recruitment days prefer to stay out. Last year, for instance, ANZ Grindlays did not turn up at IIMAhmedabad, having been offered day six. Two, the placement fee charged may deter some. IIM Ahmedabad takes as much as Rs 10,000 per individual hired. The fee was prompted by the Government’s move to tighten its purse strings on grants.

But management graduates need not lose heart. Foreign banks, for long the favourite hunting ground for poachers from the FIIs, and spurred on by a healthy growth rate, continue to be on a hiring spree.