Kolkata | Mumbai: Recruitment across India’s non-banking finance companies (NBFCs) has slowed to a crawl, with hiring coming practically at a standstill except for critical roles.
Despite the government throwing the sector a lifeline in the recent budget, it is unlikely that hiring will pick up at least for the next three to six months, say head hunters and industry insiders.
Senior executives were making a beeline to sign up for NBFCs with the sector growing at a scorching pace until a little over a year ago. Many are now looking for an exit into “safer” sectors, or into big, well-capitalised NBFCs. In the process, many have given up on hefty stock options, effectively taking a big hit on compensation. “(Developments at) Infrastructure Leasing & Financial Services and Dewan Housing Finance affected market sentiment.
There was a party going on and they were the party poopers,” said Reet Bhambhani, a partner at EMA Partners Executive Search.
The country’s shadow banking sector has been reeling from a liquidity crunch and crisis of confidence, leading to numerous licence cancellations by the central bank. Layoffs could be the next step, particularly at some of the smaller firms that were hit harder than others by the developments, fear industry insiders.
According to head hunters, the liquidity crunch has hit even the most prudently run organisations. Hiring by even the big players has dropped, with senior-level mandates down by over 50%.
Senior talent that has moved out has gone to banks, fintech companies or stable NBFCs with deep pockets. Many from small organisations have compromised on stock options.
“Many of those options have not vested yet, and there’s no one willing to buy them out at this stage,” said Bhambhani.
Kamal Karanth, cofounder of staffing firm Xpheno, said at the top 30 NBFCs, the average headcount remained flat in the past six months, compared with an increase of 15-20% in the first half of 2018.
“Several companies put hiring plans on hold as they had to conserve capital amid tightening liquidity,” he added.