When a Mumbai-based retail giant acquired a smaller company earlier this year, it had to ensure that it did not lose any talent from the acquired firm and the merger did not create any problems in human resources. Easier said than done.
"Even though we have 20 people on our HR team, we were not sure if we had the right people to handle the situation," recalls the CFO of the retailer. So the company decided to call in Anand 'Andy' Rao, a former HR head at the Aditya Birla Group who had become an independent consultant. Rao, with nearly two decades across businesses, had not only done some work earlier for the retailer, but had handled such mergers elsewhere. He was quick to chalk out a strategy.
Rao, 43, is not the only HR professional to find himself in demand after quitting big jobs and setting up shop on their own. Over the past 12 months, a dozen-odd HR bosses of various ages have given up secure jobs to become independent consultants - and found that going solo can be both more challenging and more rewarding. In these ranks are veterans like Visty Banaji, 56, who headed HR at Godrej Industries and was on its board, Sudhir V. Sohoni, 53, of Thermax and Pradeep Mukerjee, 53, of Citibank.
Almost all of them say that one of the main reasons for turning entrepreneur is the huge potential they see for independent consultants. Says Sohoni, who now runs Purple HR Consulting, "Companies of all sizes - both family-run as well as those structured more professionally - sometimes do not have the expertise in their ranks. At other times, an owner or the board feels the need to get an outsider to tackle a sensitive issue."
The clincher, he says, is that a company can hire five consultants for five different problems, so it is a wise thing to do financially.
Enough is Enough
Mukerjee had risen to the top level management at Citibank having spent over two decades at the bank when he chucked the job to lead his own show. After stints in New York and West Asia, he became Vice President of HR for the bank in South Asia around 2004. Towards the end of 2008, when he realised that the downturn was making his employer a tighter, highly centralised organisation, he quit to set up Confluence Coaching & Consulting, working out of his home.
The downturn also prompted Swaran Sehgal, 35, HR head at Edelweiss Capital, to try something dif ferent. Some, like Yogesh Mariwalla, 48, made the switch in their middle age, but for a different reason. Mariwalla stepped down as HR director at Tata Capital to set up a retail finance firm.
Venturing out on their own came with its challenges as a few professionals found. Neeta Mirchandani, who stepped down as HR head at Rabo Bank, and Citi's Mukerjee, had barely launched their new companies when the downturn enveloped the economy. Mariwalla, who had taken along four colleagues from Tata Capital to set up retail finance firm Index Money found a way out: he took seven HR people out from the set-up to form a consultancy.
"We chose to manage the HR team's salary from our own investments. That is how Index Money's HR consultancy arm was born, as we started looking out for consulting offers," he says. The firm has over 20 clients today, while the retail finance firm, in which Mariwalla is no longer active, too, survives.
Mangesh Kirtane, whose last job was as Cisco's HR head for India and South Asia, was among the trendsetters: he became a consultant in 2004-05 at the age of 40. He quit because the seven-star life "had no appeal left" for him. Worse, he was weighed down by creative dissatisfaction.
"I wanted to try out being an independent consultant and I have been very lucky in having amazing family support as well as support from banks, financiers and friends," says Kirtane.
Rao had been heading HR at the AV Birla Group for seven years when, after much soul-searching, he put in his papers in late 2009. "The recession had meant tough times for many of us and I decided finally that this was perhaps the best time to get out of the corporate structure. I am proud to say that I saw an opportunity in adversity," says Rao, who now works as Principal Consultant at Infinite Possibilities, a firm set up by a group of HR professionals.
Rao says his new existence has taught him more about different businesses as well as the different areas of a business, as he consults for a wide range of companies. "The best part, of course, is that I earn a lot more than what I used to when I was in a corporate set-up," he laughs.
On the demand curve
Has there been a rise in demand for HR consultants in the past year or so? "Definitely, yes," Rao says. The recession caused a lot of companies to retrench people, including HR professionals, as they are not 'revenue-generating' personnel. And many such companies are now seeking the help of independent consultants.
"Honestly, though, there are two key reasons why consultants are so much in demand: we charge only a fraction of the fee a firm would have to pay an employee and companies know they cannot hire five different HR personnel who specialise in M&A, talent management, executive coaching and other areas," says Rao.
Banaji, perhaps the biggest name among them all, is the most recent entrant into the league of independent HR consultants, having spent the past three decades heading HR at Telco - the earlier avatar of Tata Motors - then at the multinational Alstom in Europe and, most recently, at Godrej Industries, where Chairman Adi Godrej had given him the freedom to carry on consulting when he joined the company in 2003-04 as head of HR, Legal Affairs and IT, fresh from Europe.
"Now, at the ripe young age of 56, I have taken the plunge into freelance consulting. It's not because I was unhappy. It's just that I wanted to bring my knowledge and expertise into play at a much larger arena and on a variety of platforms," says Banaji, now CEO of his outfit, Banner Global Consultancy, which was set up in May this year.
Banaji echoes the others when he points out that it makes sense for even big companies, Indian or foreign, to call in experienced independents when required as it is a cheaper and more efficient way to handle specialised tasks.
"We can use our knowledge and experience in the industry and provide solutions and packages that sometimes a firm's own team cannot," says Banaji.
Agrees Kirtane: "A lot of traditional family-run businesses are today trying to modernise and put systems in place. Many of them do not want to hire the best HR personnel simply because of the cost factor. Also, they feel an external consultant will be more acceptable to the employees than an insider."
Kirtane, who specialises in executive coaching, training and team-building, says owners feel consultants can be hired to provide case-specific solutions depending on their expertise, something one cannot do in the case of a full-time employee.
Deepraditya Datta, Managing Director of Venetor Search Partners, says the rapid growth of mid-sized companies, many of which were or are family-run, is also driving the demand for professionalism, processes and systems.
"It is not possible to get the required expertise in all these areas from your own HR team… so not just mid-sized family firms but even larger ones are calling in consultants," he says.
Free to Fly
How hard was it, though, for these executives to give up the trappings of the huge salaries, plush offices, expensive perks and free holidays? "Sure, it was tough initially, not knowing if I would succeed on my own. But the past two years finally made me understand the value of money. Till then we spoke of cost-cutting and inflation, but frankly fuel hikes and price hikes did not affect me. Now it suddenly mattered," recalls Mariwalla.
Mukerjee agrees that life wasn't easy in the beginning, though being very clear and focused on what he wanted to do, helped. "My focus was to see how I could help organisations become more effective by aligning talent and enhancing leadership skills. While I do miss walking into a large corporate office every day, I also see how much time I now have with my family, something I never had earlier, being a workaholic," he says.
Sehgal, who gave up a promising career at Edelweiss to start his own firm, Logistics Consultants, affirms that he too sometimes misses the perks that came with his investment banking job, not to mention the steady assured income. But "there's nothing quite as thrilling as doing your own thing", he adds.
Kirtane laughs when he says he still doesn't get a fifth of what he used to at Cisco. "But then I was never too fond of a cushy, pampered life. I knew I could no longer walk into exclusive clubs or play golf on the weekends, but the thrill of working with multiple clients and designing strategies for them, compensates for any such shortcomings. My life has more meaning now," he says.