Coronavirus Outbreak: CXO-level hiring to be frozen for at least two quarters; organisations unlikely to invest in high cost resources post-lockdown
CXO-level hiring--top level chief executives; finance, operations and tech chiefs, among others, are hired for critical roles.
The good news first. In the time of forced work from home due to the government announced lockdown, some organisations are honouring the commitments made to fresh hires. The new hires are working remotely, given the circumstances prevailing across the country due to the outbreak of coronavirus , and have provided the laptops and connnections to begin work seamlessly, as it were.
"Whoever thought a new joinee and a CEO at that, could work remotely?," asked Kamal Karanth, CoFounder, Xpheno, a specialist staffing company. Given the times and circumstances are unprecedented, it is commendable, he said, that organisations are not deferring or cancelling offers.
There are a few exceptions but the large number of organisations have not been able to honor the commitments made to new hires, especially when it comes to CXO-level hiring. A manufacturing firm had given an offer letter for a plant head who had accepted it. However, the company deferred the joining date to May instead of April, said Agamjeet Dang, Managing Partner - Financial Services, Executive Access--executive search firm.
In some cases, the candidate herself decided to let go of the new offer after accepting the offer letter. A HR professional who was offered a senior position at a higher salary, decided not to take up the job offer in the changed circumstances with COVID-19 and the prevailing dismal business climate. "I decided to let go of the offer as I did not want to take any risks and went back to my management and told them about my change of plans to move on. Luckily for me, they were more than happy to retain me," she said.
CXO level hiring--top level chief executives; finance, operations and tech chiefs, among others, are hired for critical roles. These hires are done months in advance. However, the coronavirus outbreak and the lockdown has put a spanner in the works of organisations.
Kris Laxmikanth, CEO and Managing Director, The Head Hunters India, recalls the change in perceptions of those who were head hunted for CXO-level jobs. "A mid-sized firm had given an IT giant, a CEO role. The offer letter was given last week but the candidate turned it down and preferred to stay back in his old role at the IT firm," Laxmikanth said.
The mandate earlier given to CXO-level recruiting firms was to close recruitment negotiations and offers in March. Now, the organisations are asking for more time and some candidates are willing to wait, he said.
The lockdown was announced on 24 March. However, the payroll for the month of March was smooth with minimal hiccups but no one wants to hazard a guess about April. The situation is distressing for all sectors--no one knows if there will be a demand. The focus for organisations is to conserve the cash. "Unless the CXO-level hiring is absolutely necessary, the position will not be filled," said Rituparna Chakraborty, Co-Founder and EVP, TeamLease Services, staffing solutions provider.
CXO-level hiring is not a priority for any organisation post-lockdown, said CXO-level hiring firms. "There are more battles to win. Unless the position is critical, the hiring can be paused. In fact, there will significant freeze on CXO hiring," said Chakraborty.
The hiring for critical roles will come down to almost 40-50 percent in the next two quarters, said Karanth. Hiring high cost resources will be the last priority of any organisation post-lockdown, he said. He felt, the CXO-level hiring activity will take at least a quarter to be activated. "In the next quarter, there might be an 80 percent freeze; and post-reassesment of the need to hire, it may still have a 50 percent impact in the second quarter," Karanth said.
Organisations will hire for critical roles unless absolutely necessary or may hire a notch lower, said Dang of Executive Access--executive search firm. He said that job offers for even critical sectors like e-commerce, logistics, may be paused for some time. He felt that budgets being constrained, some organisations may hire a notch lower. "They won't compromise on the quality but will be willing to pay a few lakhs lesser and hire not the top guy for the role but a notch lower," he said.
The situation is fluid. Sectors like retail, hospitality, logistics, manufacturing and construction will be among the worst hit and may take months to stabilise, post- Coronavirus pandemic and the lockdown. Multinationals have frozen hiring and coupled with the high unemployment rates predicted across all sectors, post-lockdown CXO-level hiring may plateau off for some time. The only comforting factor, if it can be called that, is that it is not a India-specific issue but a global one.
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