Senior Management Recruitment not a planned activity in India: TJinsite report

New Delhi :In most organisations, CXO hiring does not seem to be a planned activity. It is more of a replacement led activity rather than a sustained talent management strategy. The position involves huge investments and employers need to see that the candidate fits the position as well as into the organisation’s culture.

For many, recruiting senior managers is a troublesome task. However, clear objective, focus and planning well, in advance, helps make the process relatively smooth. TJinsite in its latest survey on Senior Management Recruitment explores the strategies and challenges of filling CXO positions.

Hiring Senior Leadership: Strategies & Challenges

Filling senior management positions is crucial for the success of an organisation. The investment is huge and employers need to see that the candidate fits the position as well as into the organisation’s culture.

While hiring senior management personnel, ensure that a complete job description is in place. Carefully sift through the background and professional record of the candidates. For many, recruiting senior managers is a troublesome task. However, clear objective, focus and planning well, in advance helps make the process relatively smooth.

An earlier study by TJinsite on Succession Planning revealed that only one-fifth of the organisations interviewed said that they plan for important CXO positions. The key challenges were largely attitudinal, including unclear organisational vision, lack of succession planning and career development tools.

In the latest survey by TJinsite on Senior Management Recruitment, while the focus is more on the processes, there is more evidence that CXO recruitment is seen more from the perspective of replacement than from a strategic viewpoint.

In general, the more senior the position, the more senior the group involved in the hiring process. According to the TJinsite study, over 80% of the organisations use appointment panels to recruit senior management personnel. The importance given to the panel is quite high, as in half of the surveyed organisations, the CEO chairs the panel. In about 45% of the cases the CEO takes the final decision on candidate selection. In a third of the organisations, the case is referred to the Board of Directors.

In most organisations, CXO hiring does not seem to be a planned activity. Over 80% of the organisations stated that they find their CXOs within 6 months of the launch of their search. This relatively long gestation period point to CXO recruitment being more of a replacement led activity rather than a sustained talent management strategy.

In the hiring process, half of the organisations use the panel interview format. One-on-one and behavioural interviews are used by about 30% and 20% of the organisations respectively.

In the IT and ITeS sectors one-on-one interviewing is preferred over panel interviews. Training and transition support is considered a must and 85% of the organisations say that they offer this support to newly recruited senior management.

One of the stated challenges in the hiring of CXOs is the problem of cultural fit. A lack of integration in the corporate culture, will inevitably lead to departures. This would happen if not enough time and effort is spent on reference checks and the cultural fit of the prospective candidate, prior to hiring.

It is imperative in the face of these kinds of challenges and for the stability and growth of an organisation that senior executive recruitment is seen as a priority corporate strategy. Organisations need to have a professional and sustainable culture in recruiting and retaining senior leaders.

The advantages of doing this and not putting executive recruitment on a back burner will be of value to a company not just in the good times but also during the bad times.

Desired characteristics and competencies in Leaders

Leadership and management experience are the most desired competencies in senior management. About three quarters of the organisations surveyed emphasised the criticality of these. Today, organisations are even waking up to the fact that identifying and nurturing talent is as crucial a task as finding a new leader.

Brushing managerial skills is also up on the agenda. Followed by leadership and management experience, Following this, industry experience was another characteristic considered important by about 20% overall; this figure rose to 30% in the IT industry, where a thorough knowledge of the industry in which the parameters change rapidly, is thought be fairly crucial.

About half the organisations state the talent crunch as their biggest challenge. This needs to be interpreted as a numbers rather than a ‘talent’ crunch; in the rarified atmosphere of senior management, the number of available talent is usually quite small, leading to this perception. A quarter also mentioned, cultural fit as posing a problem when hiring senior personnel.

Important Screening Factors for Leaders

Overall, an assessment based on records is the most common method of screening for a CXO position. This method helps the organisation to find out, how well the candidate has performed in previous roles with past employers. This is followed by personal interactions with previous employers, and third on the list, mentioned by only 25% overall, is reference checks. These figures deviate from the norm in the ITeS and the BFSI industries. In the IT
eS, reference checks (45%) and personal interactions with previous employers (45%) are considered more critical than assessment based on records, which is mentioned by only 7%.


Reference checks may be time consuming, but they help ensure better and more informed hiring decisions. In the BFSI sector, the situation is reversed with 60% of the organisations stating that assessment is the most critical method of screening. A mix of methods – assessment centres in the form of GD’s, tasks, written exercises and presentations, psychometric tests, and bio-data are used as selection methods by the appointment panel.

Basic criterion for fixing CXO salaries

Salary of CXOs has been a matter of deliberation for long, now. Especially, after the global economic slowdown this became one of the key issues to tackle, for HR fraternity, worldwide. The challenge in fixing a CEOs salary doesn’t lay in how much a CEO should be paid, but in finding how they should be paid? Many studies have been conducted on how to fix CXO salaries – should it be based on company performance, individual performance, responsibility level, company standard, industry standard?

TJinsite survey shows that, while primarily the level of responsibility (41%) determines the salary, a combination of other factors is also looked at. Industry remuneration standards (24%), salaries earned in the previous position (20%) and years of experience (11%) are also considered important and are determinants of CXO remuneration. Over 80% of the organisations use appointment panels to recruit senior management personnel. This appointment panel plays a crucial role in fixing salary of a CXO. In most cases this panel is headed by the CEO or Board of Directors.

Preferred recruitment channels for Leadership Positions

A mix of channels is mentioned by organisations as being used for recruitment of CXO’s. About 30% use recruitment agencies and 20% each mention social/professional networks, recruitment portals and employee referrals/WOM. The interesting variations to the average come from the IT and the ITeS sector, where the reliance on social and professional networks is higher than the norm at 32% for IT and 46% for ITeS. Employee referral and word of mouth is also higher in the IT sector at 31% versus the average 20%.

Bulk of the organisations look for their CXO’s within the industry. Of those who considered candidates from within the industry, about half looked for their CXO outside their company, about 17% or so within the company itself and one third whose footprint included the company and the industry that they operated in. In the IT sector, possibly because of the nature of the business and the knowledge required, 60% of the organisations said that they only looked within the industry.

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