When 27-year-old Ankit Kherwal passed out of the Indian Institute of Management Bangalore in 2011, his dream was to work in a financial services company. He was on top of the world when Royal Bank of Scotland (RBS) offered him a job on campus. However, a year later, Kherwal was fascinated with the job profiles some of the e-commerce companies were offering. "Many of my batch-mates from IIM had joined market places such as Amazon and Flipkart and the kind of empowerment they enjoyed. The roles they got to do early in their careers made me realise that it would take me ages to get to that level at RBS," says Kherwal, who is currently Manager, Financial Planning and Strategy at Pepperfry.com, a furniture and home online marketplace.
Kherwal had always dreamt of starting his own business and the e-commerce sector is all about having an entrepreneurial approach to doing business. But it was not an easy decision to leave the job security that a bank offered to join a start-up. The e-commerce sector by then was already burning a lot of cash and Kherwal wondered whether he was doing the right thing. However, after speaking to Pepperfry founder Ashish Shah, Kherwal decided to take the plunge. "I had a long discussion on where the business was headed and how much cash they were burning. I realised that it was a high risk game but it had huge upsides too. I was prepared to take the plunge."
- Higher growth opportunities
- Entrepreneurial mindset
- Thrill of shaping a new-age industry
- Wealth creation opportunities
It's close to two years since Kherwal has been with Pepperfry. He believes that in a bank it would not have been possible to get the kind of empowerment and growth his current job profile gives him. "The learning is much more and I have empowerment to literally build the business from scratch."
Similarly, Ananya Tripathy, 31, quit her cushy consultant's job at McKinsey to join fashion e-retailer Myntra earlier this year as Head, Strategy & Planning. She says the biggest difference from her previous role is the opportunity to be a part of a consumer revolution in India. "Very few companies give you opportunities to shape the future. From rolling up your hands and creating industry systems and processes to thinking of pricing and having audacious aspirations. It is something one can't get in any traditional industry."
Indeed, the market is abuzz with news of e-commerce companies unable to make profits and being asked uncomfortable questions by their investors. But Indian e-commerce companies and other start-ups continue to be the dream work destinations for many. Like Kherwal and Tripathy, there are thousands who have moved to e-commerce companies and other start-ups - leaving behind the comfort and security that traditional sectors such as FMCG, banking, manufacturing and IT have been offering since decades - without batting an eyelid. Over 65 per cent of placements by search companies in the last six months have seen movement of professionals from traditional sector companies to e-commerce ventures.
MOVERS & SHAKERS
- IDI SRINIVAS MURTHY: Senior Vice President (Marketing), Snapdeal
- RAJIV BANSAL: Chief Financial Officer, Ola Cabs
- ANANTH NARAYAN: CEO, Myntra
- SRIRAM VENKATRAMAN: CFO (Commerce Platform), Flipkart
- RAJINDER SHARMA: Group Legal Head, Flipkart
- HARDEEP SINGH: Head, Infrastructure, Snapdeal
- SAMARDEEP SUBANDH: Chief Marketing Officer, Flipkart
- MANPREET RATIA: Head, Last Mile Operations, Amazon India
Nitin Agarwal, AVP, Marketing, at online marketplace Shopclues.com, is often asked whether his company not being profitable worries him. The former Ashok Leyland and Gulf Oil employee, who has been with Shopclues for three years now, says: "I tell people when you join a power company, it takes seven years for the company to break even, five to 10 years for an airline to company break even. All of them are long gestation sectors." E-commerce, according to him, is always under the lens because of its deep-discounting strategy. "Shopclues is not profitable at the moment, but that's our business choice. We want to invest in business and business growth. The kind of growth I have got here I could have never imagined getting in a traditional sector company," adds Agarwal, who joined Shopclues as a product manager and in a span of three years has moved on to head the company's marketing function.
Joining an FMCG company, a bank or a manufacturing company is no longer considered cool even on business school and tech school campuses. "The traditional sectors have lost the day zero slots on most campuses and are now fearing losing the day two slots to the consumer internet sector," says Utpal Das, Principal Consultant, EMA Partners, an executive search firm.
Most traditional companies, says Das, either have to be content with the leftover talent in the Tier-I campuses or are forced to go to the Tier-II or even Tier-III schools to hire. The reason why the current breed of graduates is switching loyalties is again the entrepreneurial mindset that most e-commerce companies offer, as well as the wealth creation opportunity them offer in the form of ESOPs (employment stock options).
Raj Raghavan, Director, HR, Amazon India, says that e-commerce can't survive without traditional sector expertise in areas such as logistics, supply chain and even marketing strategy. "Just having a great app will not work. We will need business acumen too and it is natural for new industries to get talent from the established ones." Similarly, Ashish Shah, founder, Pepperfry, sees similarities between FMCG and e-commerce. "FMCG companies have shorter planning cycles and people focus more on general management than specialising in a particular area. That absolutely fits into our way of working."
This is definitely not the first time that a new-age industry has attracted talent (we have seen a similar trend during the telecom boom) from the traditional sector. However, the pull factor this time is not so much about the newness of the sector but the growth opportunities and the wealth creating opportunities that it has put on the plate. Abhishek Dasgupta, Senior Marketing Manager at Pepperfry, completed his MBA from IIM Lucknow in 2010 and then joined Pepsico India, where he handled corporate strategy and sales for close to three years. Dasgupta claims that his stint in the last two years with Pepperfry has been one of exponential growth and lot of variety. "At Pepperfry, I have worked across product management, category management and now marketing. But more importantly, I have the freedom to give my inputs to the business and develop my own framework."Dasgupta says that barely months after he joined Pepperfry, he was asked to develop a customer segmentation model in just two weeks. "I would have never got a chance to do this in Pepsi so early in my career and that too in just two weeks."
Raghavan cites the example of an intern who solved a logistics problem for them. "People join Amazon for the bold bets they can take. We allow them to fool around with technology and are okay with early failures."
High growth doesn't necessarily come with exponentially high salaries. While Agarwal of Shopclues says that salaries in e-commerce companies are competitive, Dasgupta and Kherwal claim they made a lateral move to Pepperfry. "It is only in the last four to five months that we have been offering high salaries to our new recruits, prior to that most of them have joined either at the same salary and some of them even took cuts," endorses Shah of Pepperfry.
The e-commerce sector doesn't pay astronomically high salaries, points out Rekha Koshy, Partner, Accord International, an executive hiring firm. "Most of them are wooing their employees with wealth creation options such as ESOPs."
"It's more about the belief in the overall story and the amazing job profiles we offer them. Most of them don't even consider salary as a reason to move," claims Radhika Agarwal, co-founder, Shopclues.
However, e-commerce salary packets today are at par with any large traditional company, be it HUL, ICICI Bank or Wipro, claim headhunters. A management trainee from a top-ranking business school commands an annual salary of around Rs 25 lakh, while the salary of a mid-level employee in a large FMCG company is in the Rs 40 lakh to Rs 60 lakh bracket. Senior management salaries are upwards of Rs 1 crore. "E-commerce salaries in the beginning were not at par with the traditional companies, but in the last one year they are competitive," confirms Das of EMA Partners.
The Indian e-commerce revolution has not only attracted talent from the domestic market, but has also lured Indians working overseas. "While the domestic talent are finding e-commerce a great way to rejuvenate themselves, Indians living abroad are buying into the India growth story," points out Koshy of Accord.
Manpreet Ratia, Head, Last Mile Operations, Amazon India, agrees that the India growth story lured him to come back. He had worked for over a decade with companies such as Citibank and GE in the Asia-Pacific. "I opted for e-commerce as it gave me an opportunity to do something that will be a game changer. The amount of logistics and supply chain infrastructure we have invested in, will be beneficial to the economy at large."
Similarly, Idi Srinivas Murthy , who has recently joined Snapdeal as Vice President, Marketing, was the Regional Director (Marketing), GlaxoSmithKline Consumer for Africa in his earlier job. Murthy, who has also done a long stint with Coca-Cola, says that the biggest pull for him to return was the huge excitement around the Indian market that he witnessed in the boardrooms of both GSK and Coca-Cola. "To add to that it is the ambitious goals that a company like Snapdeal allows you to set in order to create an impact on consumers. It is fascinating."
But don't the questions raised around the long-term sustainability of e-commerce companies bother them? Ratia says he wouldn't have considered joining another e-commerce company had it not been for Amazon. Murthy also admits that he did have reservations initially. "I did find out if this was just a valuation game or was it for the long-term. The investor community convinced me that Snapdeal was for the long-term especially since it had serious investors such as SoftBank."
Attrition levels in some traditional sectors such as FMCG, manufacturing and banking are anywhere between the 18 to 20 per cent mark. While most of these companies refuse to admit that all isn't well for them on the people front, each one of them is making serious effort to retain their key talent.Most big FMCG companies, for instance, says Koshy of Accord, are offering increments in the region of 40 per cent along with an additional performance-linked incentive. "Traditional companies are also focusing a lot on identifying high potential talent who have the ability to take on bigger roles and are investing in them. They are also offering them roles which they have never done before," explains Pallavi Kathuria of Egon Zehnder.
A key reason for the talent exodus from traditional sectors, apart from lack of growth opportunities, is the entrepreneurial platforms that most new-age companies bring to the table. To bridge that gap, Godrej Industries has launched an initiative called LOUD (Live Out Ur Dream) where the company funds its employees to fulfil their entrepreneurial ambitions and indulge in their passions. So, the company offers them scholarships for a range of activities: from film-making, cycling in Europe to CSR activities. The conglomerate, says Group HR Director, Sumit Mitra, has been using LOUD as a tool to attract students from business schools.
Similarly, IT major Wipro has created a fund called Wipro Ventures, which funds start-up ideas of its employees which help Wipro at large. The company's Senior VP, HR, Saurabh Govil, says the company is trying to create enough opportunities for its employees to experience the start-up culture within Wipro itself. Wipro in the recent past has had quite a bit of attrition in the middle management level.
According to Harsh Kapur Pillai, Managing Partner, Terragni Consults, traditional sector companies don't make adequate investment on people. "Most traditional sector companies tend to invest much more on their go-to-market than investing on their people," points out Kapur, who feels that the sector witnessing the maximum churn is manufacturing.
Anjali Byce, HR Director at bearings maker SKF, agrees that investment on employees has indeed been an issue with most companies in the manufacturing sector. Byce says that her company had done an analysis on their high attrition rates four years ago, and the result it threw up was the desire in the employees to play a more meaningful role in the company. "Based on this analysis, we, in the last few years, have intensified our focus on the talent which we absolutely want to retain. We are doing leadership foundation courses for them and are also exposing them to diverse functions within the company, so that they don't feel the need to look out for greener pastures."
Indeed, there is a reverse trend visible too. Some are making a comeback to the traditional sector companies. "There are some people who don't enjoy the start-up profile and the risks associated with it and they are the ones who are making a comeback," says Kathuria of Egon Zehnder. Also, people with online experience are in demand by traditional companies. Das of EMA Partners points out that many people are sceptical about the viability of e-commerce companies. "With profitability nowhere in sight, people are beginning to become sceptical about the wealth creation opportunities."
However, this trend is still in its infancy. The larger story continues to be the great exodus of talent from the traditional sectors to e-commerce and start-ups. And experts say this will continue for some time to come.