Mumbai: Headhunters for top corporate roles are facing a problem once limited to the lower ranks: Candidate dropouts, where a person finishes the recruitment process and accepts a job offer, only to back out later.
Dropouts are rising since companies scout for CXOs from a wide range of sectors, resulting in the same candidates receiving multiple offers, executives from top recruitment firms said. In turn, these recruiters are pushing companies to wrap up the hiring process quickly and even keep tabs on the candidate.
“It has become quite normal to have one out of four finalist candidates dropping out at the last moment. It is now a standard practice for us to check with the candidates for any parallel conversation that they might be having already, and mostly, they do let us know at the interview stage if they are in process with another potential employer,” said Suresh Raina, a partner at search firm Heidrick & Struggles India.
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Lengthy process
CXO dropouts are frustrating because the lengthy process has to start from scratch, delaying the company’s plans. Headhunters are annoyed, too, since they get paid only if the candidate joins and works for a fixed minimum period.
According to search firm Korn Ferry, CXOs in India have more options than their counterparts in the US and Europe, translating to multiple job offers for the same person.
“Companies are now looking at talent from their own and other areas, which means candidates with the right competencies have multiple options. Firms about to lose top talent are ready to retain CXOs, offering bigger roles and revising compensation,” said Ashwin Saboo, senior client partner and head of industrial markets at Korn Ferry.
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Keeping tabs
Headhunters are also keeping close tabs on candidates. An executive who had negotiated a 100% hike and agreed to relocate backed out at the last minute, texting the headhunter that he had to attend to a family emergency. When the headhunter dialled the candidate’s landline, the executive was said to be at a meeting – the current employer had matched the offer and given a promotion to retain the CXO.
“There is a 20% increase in dropouts for us this fiscal. The challenges that pop up at the last minute are around relocation to another city and medical concerns for senior parents. In most cases, the candidate gets retained by the present employer or joins another firm,” said Jyoti Bowen Nath, managing partner at search firm Claricent Partners.
Search firms often spend months to find a suitable CXO candidate, and their relations last for years. After multiple interviews and negotiations over five to six months, most candidates serve a three-month notice period before moving jobs. Often, the same recruiter is responsible for getting the CXO to other jobs after a few years at one firm.
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Post-covid spike
Dropouts surged across the board after the covid pandemic when companies started guzzling talent, often doubling salaries for the right person. IT, banking and insurance saw high levels of attrition and dropouts during the period. However, CXO candidates walking away after accepting an offer is worse, given the complexity of the recruitment process.
“There is no concept of blacklisting, and CEOs have even dropped out pretending to get caught up in a medical emergency. Within days, we realize that the candidate was either retained or got another offer,” said K. Sudarshan, MD for the search firm EMA Partners. Sudarshan pointed out that firms are struggling with a lack of suitable candidates because, along with expansion, businesses have become more complex. “People who can fit into the new large and complex structure are few”.
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“As a best practice, we advise our clients not only to move fast with the search process but also to make an offer within a week of the final round of interviews,” said Raina of Heidrick & Struggles. “We can’t afford to take 3-4 weeks to make an offer.”
