News: Indian retail sector salaries at an all-time high

(BL 26/08/2006) Bangalore - Are India's retail sector salaries getting out-of-whack? While some shrug off Reliance's Rs 2-3 crore per annum for its high-flyers, as `new industry' phenomenon, others term it 'unrealistic'.

"If you want to quickly assemble a high-level team, it can only be done through mind-boggling compensation," says K. Sudarshan, Managing Partner EMA Partners International, a global executive search recruitment team. Industry sources also point out that being a people-intensive business, companies with big plans like Reliance and Pantaloon cannot afford to be blind to salaries.

Attracting talent

Reliance is known to attract talent through huge compensation packets, thus creating exit barriers for these execs. "But there may not be much change in their pay cheques at least for a couple of years," they say.

"Demand for talent is hotting up and even if they do not revise the salaries for the next two-three years, competition may not be able to lure away these people they are way ahead of other players in the industry," comments Kris Lakshmikanth, Managing Director, Headhunters India Pvt Ltd.

Says Parvathy Krishnan, CEO, Cucumber Consultants, a Hyderabad-based recruitment firm, "Certain rare talents are expensive and they have to be compensated well. Look at it this way. These levels of compensation would make the sector more organised and better paymasters."

High pay scales

R. Sankar, Country Head, Mercer Human Resource Consulting, argues that compensation levels have to be high to attract talent to a new sector, where risks are high and business challenges great. Otherwise, why would employees want to leave a secure sector for uncharted territory and an uncertain future, he asks. "I agree that some form of equity-based rewards would be ideal but this would depend on the owners' views of dilution."

So, how is Pantaloon Retail, the original `big guy' of Indian retail sector responding to the big bucks that may impact the industry salary norms? No skewed salaries in Pantaloon, says Sanjay Jog, Head, HR, PRIL, adding, "We believe people do not move for salaries and also that there is really no talent crunch in the industry."

With the right attitude from the candidate and training capability from the company, talent is transferable from any industry, he says.

Industry observers also say that the stock option component in PRIL salaries is more realistic. About 200 PRIL employees are now covered under ESOPs and the company plans to increase the number soon, according to Jog.

"This is more realistic as performance of the company would result in higher take-homes for employees," sources say.