Brokerage houses shy away from lateral hiring

Severe cost-cutting leads to fall in demand for graduates with work experience

Satish Sharma has every reason to be disappointed. A couple of years ago, the 27-year-old, a second-year student of a Mumbai-based business school, quit his job with a stock broker and joined a management programme, hoping the degree would land him a plush job. However, his hopes have been dashed — this year, most leading brokerage firms are shying away from recruiting experienced candidates from business schools.

Sharma, as a result, has been forced to settle for opportunities outside the industry of his choice.

He is among the scores of management graduates with job experience who have been forced to give up on their dreams of securing a high-paying position with a brokerage firm. No major expansion, coupled with severe cost-cutting, had led to a fall in the demand for these graduates, said human resource executives of major brokerage houses.

“It is going to be a difficult year for lateral hires, especially those with an experience of more than five years, as companies, including ours, have slowed in this segment,” said Dhruv Desai, senior vice-president and head (human resource and leadership academy), Angel Broking.

Consultants said this year, the demand for such candidates had fallen 25-30 per cent. Brokerage firms have been trying to stay afloat by cutting costs, primarily those on employees, as the decline in stock market activity has squeezed revenues. To reduce losses, in 2010 and 2011, many firms cut jobs at junior levels. In 2012, many senior executives, too, were asked to quit.

N D Sharma, chief manager (corporate relations & placements) at Mumbai-based K J Somaiya Institute of Management Studies & Research, said this year, the institute had seen a “noticeable drop” in lateral hiring by brokerage firms.

Consultants said brokerage firms weren’t even filling the positions of those who were shifting jobs.

While salaries of entry-level management trainees in brokerage houses are Rs 10-13 lakh a year, those with experience of four to five years may get Rs 18-25 lakh a year. Pallab Mukherji, human resources head at India Infoline, said this year, the company would focus on hiring for entry-level positions.

Also, brokerage firms are increasingly becoming choosy about the type of business schools they hire from and the number of graduates they recruit. This year, these firms primarily plan to recruit from Tier-I institutes. The scenario is in stark contrast to the period before 2007, when graduates had the upper hand in negotiations with potential employers, who were desperate to hire. Angel’s Desai said this year, candidates were willing to come on board for lower salaries. “These students are more tilted towards learning, rather than merely looking at pay packages,” he said.

K J Somaiya Institute of Management Studies & Research’s Sharma said the number of recruitments per company had fallen this year. Brokerage houses have already started visiting the institute’s campus to recruit for posts of business development, marketing and financial analysts.

Debashis Sanyal, dean of the business school at Narsee Monjee Institute of Management Studies, said about five brokerage firms had visited the campus this year. He added there would be a marginal increase in hiring this year.