Hunt For The Elusive ‘Purple Squirrel’

The demand is for a young leader equipped with in-depth knowledge of the latest digital skillsets and cross-functional experience, one who can weather all storms and drive the firm in poor visibility. But such a perfect candidate does not exist.

Pranshu Upadhyay, regional director at global executive search firm Michael Page, says it upfront: a recruitment partner “can match talent and not create it”.

“In 6 out of 10 cases, we consult clients on what’s available and what’s not. In complex roles, a 70% match is a good fit. Otherwise, the hunt for purple squirrels remains on diluting the position further in the relevant candidate pool – being opened for four to six plus months,” Upadhyay told Mint.

The headhunters, those who prowl for CXOs and a level below, have noticed that companies are combining job descriptions to create a mandate that does not exist in the market.

For instance, said the regional director of Michael Page said, a company may ask for a candidate with a large language model (LLM) experience of over five years.

But since LLMs—used in artificial intelligence (AI) chatbots—arrived in India only two-three years ago, it is difficult to find someone with this tenure, “unless they are targeting Silicon Valley for the talent”.

Over the past couple of years, CXO talent hunt has witnessed a yo-yo. On an overdrive in 2021 and a large part of 2022, the job market froze after companies realized that they had overhired. Indian firms mirrored global layoffs in IT and the startup sector, and then hiring expanded again in 2024. But it has not gathered the same momentum.

The crises in West Asia and realigning of businesses as companies tighten their belts and measure the impact of AI on workflows have brought in a lot of hesitancy in the job market. The ongoing trade war, along with its domino effect on economies, has brought about opaqueness in what lies a few quarters down the line.

Companies are taking up to six months to take recruitment calls and candidates are also turning hesitant. The fear that the last man in will be the first man out has set in. And, therefore, the talent search firms are strongly nudging clients to dial down their expectations.

“We are hired to find the best in the talent market. But like there is no perfect job, there is no perfect candidate. As leadership advisers, we consult and advise clients on attributes that are ‘must have’ and those which are ‘good to have’, and what are the acceptable tradeoffs,” said Pankaj Arora, managing director at global executive search firm Russell Reynolds Associates.

For Russell Reynolds, the advisory role increases for the “first-time clients” till the rhythm sets in. “Companies in new-age sectors are more open to experiment since they know talent is scarce in their sector than in the established sectors facing some headwinds, who may have a lesser risk appetite,” noted Arora.

A search firm represented by headhunters looks at hiring CXOs or top-level executives. Then, there are recruitment companies that place junior and middle management executives. And finally, the hiring industry has staffing firms, which provide the third-party workforce, where the employee works for a firm but is on the payroll of the hiring vendor.

While there is a flat fee structure for staffing and recruitment firms, the executive search sector gets its fees in tranches. A part of it comes in when the mandate is given, a part when a certain number of candidates are shortlisted, the third when an offer is made and accepted, and the final tranche sets in when the selected CXO completes three to six months in the firm. Therefore, delays in shortlisting candidates hurt the search firms’ books.

Agamjeet Dang, chief executive officer for search firm Executive Access India, sits with the client’s hiring team to discuss the top three parameters that the candidate must have. “Over the last 18-24 months, the search industry has seen an increase in failure rates, where the briefs led to long-drawn multiple hunts. About 60% of the clients are open to pushback, but many search firms do not say no, fearing the client will go away”.

Ultimately, the delays, multiple cross-checks and hesitancy from Indian companies are also leading to an increase in dropouts. Some search firms have noted a 20% increase in CXO dropouts after accepting the offer in the past year, and the whole process has to start again.

Many companies are taking to accommodation. According to the HR head of a Mumbai-based mid-tier finance firm, they have decided to accept a candidate who matches 70% of the job profile. But the reason behind the strategy is different.

“We are open to candidates who may not have the exact qualities but can be groomed,” the HR head said. “Hence, they are put in the succession pipeline and the skillsets that they do not have are honed.”