India Inc. hires CEOs on lease to turn businesses around

 

The Economic Times, January 28, 2011

 
For 23 years, Ajith Anandan worked at eight different offices in three different geographical locations. For the past 10 months, however, he has been a 'CEO on lease'. He has joined a Texas-based boutique IT consulting firm to help them start operations in India, but has been drawing his salary from HR services firm MaFoi Randstad, which found him his latest employment. In fact, Anandan (not his real name), is one of eight 'temporary' CEOs who work for various firms, but are all on the on the payroll of MaFoi. Other staffing firms, like Adecco, Manpower and some others, also offer CEOs on lease.

"Temping at the top, or interim management, is a very new concept in India," says K Pandia Rajan, CEO of MaFoi Randstad India, which has helped place 20 such CEOs in the past few years. MNCs entering the country and looking for a local person to set up operations, domestic companies floating new ventures or small and mid-sized firms who can't hire a full-time CEO due to cost constraints, all opt for CEOs-on-lease. They are hired for a period of between three and 12 months."

Globally a common practice, the trend has picked up in India after a large number of mid-sized companies from the US, UK and Europe forayed into the fast-growing Indian economy. "We have seen the business grow 40% since last year, and plan to grow at the same rate for the next few years," says Rajan of Mafoi. "This could be true of other staffing firms as well." People recruited under this new, rent-a-CEO trend include senior managers on sabbatical, retired PSU executives or even senior-level global staff of MNCs who are brought in to facilitate the setting up of a business. Depending on the size of the hiring company, their pay package varies from Rs 25-60 lakh per annum (with a commission to the staffing firm). 

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