What We’re Seeing on the Ground
Our team in India recently spent some time with a range of clients in Mumbai and observed some interesting dynamics in play within recruiting across the trading community.
2 key trends are currently very clear:
- Many of the original domestic firms that started trading on Indian or emerging exchanges are now trying to expand their strategies and trading efforts into bigger overseas markets, looking to leverage their capital base and extend their infrastructure into new frontiers. Whilst not necessarily a new development, it’s clear this is now widespread across the industry in India, which is creating fierce competition for experienced domestic talent with relevant knowledge. International talent remains very much unexplored in most instances, and there is wide variation in target trades, products and strategies these firms are looking to deploy.
- Many of the large international firms have now established a strong foothold in the domestic markets and created extremely profitable businesses. They are now looking to diversify their revenue streams through an evolution or proliferation of existing strategies, whether that be into new products or trading frequencies. Appetite for experienced expertise remains very high in some of these firms to facilitate these objectives
From a recruitment perspective, both come with different inherent challenges…we have broken some of these down
What are the challenges for domestic firms looking to expand?
Whilst local Indian trading companies may have seen success with domestic products; it is not guaranteed that this success translates into success outside of India. Whilst most of these firms recognise the hurdles from a technological perspective, far fewer, in our experience, have put that same energy into building out a well-thought-out talent strategy. Attracting and retaining talent is a challenge that some of the larger international firms invest millions to solve and, as a result, have a mature talent acquisition platform to leverage ..
Navigating non-competes
Local Indian firms (more so than their international counterparts) sometimes remain sceptical about non-compete enforceability and typically have very little appetite to wait the 12-24 months that is now commonplace at larger Trading firms. Certainly, we see very little desire to pay for people to wait out times with sign on bonuses in most instances. We see a lot of evidence that this creates a bias towards hiring people who are already on the market, as its cheaper. This can be adverse selection. Should immediate availability really be the key driver over identifying the best fit possible given the long-term potential? Alternatively, many firms try to deploy junior talent, with the hope the solve the problem more cost-effectively? But can junior talent alone really compete with some of the largest, most profitable businesses out there?
What’s the actual sell?
Many firms neglect to create the right narrative. “Autonomy and high payouts” are regularly touted as key sells in the industry by smaller firms. The message that often lands with candidates is that you’re largely on your own, and the payoff only comes if you succeed.
Either culture is just bad, or firms are bad at articulating what their culture is and why someone should work there?
For firms establishing international offices, we see them struggling to convert international talent to join a heavily Indian-based culture.
In either case, compared to the very distinct narrative that established firms have, we feel smaller domestic firms could benefit from creating clearer identities for themselves, particularly when looking at new markets. We, as recruiters, will struggle to sell it to candidates if a firm cannot sell it to us!
Candidates need a narrative they can get behind when assessing their career options, but also one that holds pass the probationary period.
Compensation
Whilst the market has warmed up in the last few years in India to guarantees and sign on bonuses, there is still visible reluctance by domestic firms to commit cash upfront to candidates. In a competitive market, you are always going to struggle to attract the very best, if you are not willing to be competitive. As Indian companies expand their footprint internationally, this will become even more prominent – particularly for candidates still in employment. Candidates need to vet firms upfront, as it’s common for candidates and firms to waste a lot of time on interview processes that are never going to convert if the offers are not competitive.
Culturally, there is a widely accepted trend in India that candidates will try and up bid their offer even after they have committed to a new firm. Whilst this is inherently challenging for the industry, there are still plenty of examples of firms paying under market rate for a candidate, then losing them to a higher bid down the road …
Staff retention strategies
This is clearly an area that doesn’t get the strategic attention it deserves. As the markets continue to mature and hopefully successes emerge in these international build-outs, firms need to be proactive in protecting the revenue streams and ultimately the IP that led to that success. Keeping staff happy and engaged is the strongest weapon in any firm’s arsenal. Jane Street is a shining example of how an engaged workforce can create relatively low staff turnover in an industry where there is always a higher bidder
What are the challenges for international firms looking to further develop their domestic business?
Many of the international firms may feel like they are struggling to find lateral trading hires in the domestic market and see a good flow of candidates to help expedite the growth of these strategies. They have the resources and the brand behind them, but unearthing talent is the biggest challenge these firms will face in the coming months and years.
Message to Market
Most traders in India will be aware of the big names and what they do. Many most likely have now engaged with them on previous occasions. The struggle these firms now have is that their business has evolved rapidly, and the trades they want to deploy are now different. They need to find a way to get this new message to the traders in a way that resonates in its current form. It’s now a nuanced message that needs to be delivered precisely and proactively, leveraging talent from established businesses without giving too much insight to their competitors or the firms they want to recruit from…
Standard of recruitment firms in India
Unfortunately, as in all locations, there is a mixed standard of agencies within our industry. Putting aside the bad practices that occur, engaging poor-quality agents that cannot articulate a clear message to the candidate pool wastes hiring opportunities. Multiple agencies communicating different versions of the same message also create uncertainty and can quickly cause the candidate market to evaporate.
Closing out candidates is also delicate and requires nuanced expertise. Subpar recruiters not only can fail to deliver value, but bad processes can result in many hours being wasted by firms (by interviewers that are no doubt expensive to employ).
Correct interview process
Processes need to line up with the role being filled. Asking a passive candidate to spend hours doing brainteaser questions he has not looked at since college is going to reduce candidate pools quickly. A lot of international firms have had great success hiring grads in India and relocating people from other offices. But lateral hires require a separate interview process that will truly reflect the role the business needs. If these hires are being led from different geographies, making sure the process reflects the local market will present challenges that need to be considered pre-emptively.
Tapping into international markets
Locating talent abroad that wants to return to India is an avenue available, but one that will require a clear message and education around the realities of such a move. Candidates will automatically assume some localization of comp to work in India, which in many instances is going to be a deterrent. India is a fantastic country that has massive amounts to offer for adventurous young people. Naturally, there are inherent challenges to attracting not just returning Indians, but candidates from the wider international trading community, without a well-thought-out message and relocation package to make the move appealing.
Conclusion
These are dynamics we see play out across every conversation we are having in this market now. If any of this resonates with what you are navigating, what is the biggest hiring challenge on your desk this quarter?
Want to learn more about what we’re seeing on the ground? Connect with our consultants on LinkedIn and speak to the team with hands-on experience across the market.
