Arrival of realty mutual funds aggravates talent shortage

The addition of new real estate investment products and property funds
that developers are lining up are expected to exacerbate the talent
crunch in real estate.

"The sector is currently hiring for front-office, back-office and
operational roles. The levels are comparable to the first wave of
aggressive hiring witnessed in the late nineties. We have seen over
1,500 cumulative openings being tendered in the first quarter of
2008," said Monisha Advani, managing director, Randstad Holdings India
(former Emmay HR), a hiring consultancy.

Though regulatory clarifications are still awaited, fund houses are
already on the hunt for key personnel, who have the caliber to look
after investments in real estate.

Milind Barve, managing director of HDFC Mutual Fund, says his firm has
already hired 5 to 6 people in the past 6 months for realty funds.

"Two of these would come from within the group i.e. Housing
Development and Finance Corporation, while another one has a finance
background," Barve said.

A fourth has been inducted to look after the tax issues on the deal
structuring side, while the fifth one will take care of legal issues
linked to due diligence of a property before investing in it. Rival
Birla Sun Life is on the lookout too.

"Not aggressively, but we are seeking people who have worked with
property consultants and investment banking firms," said an official
who did not wish to be named.

With talent in short supply, speed is of essence.

Property consultant Knight Frank has seen two seniors —- one from
India and another from Australia —- move to UK-based firm Rutley
EuropeanProperty's Indian asset management operations.

Manish Charatkar, head of human resources for western location at
Jones Lang LaSalle Meghraj, says recruiting takes a long time, though
people are found in the end.

Poaching from competitors is rampant. "At any given point in time,
good people have 2 to 3 offers in hand. There is a premium on
readymade talent," says a consultant.

Not surprisingly, salaries are flying.

"On an average a professional gets 25-35% increment annually. Were
they to change jobs, the increment rises to 40%-50%. For companies,
the cost implications multiply if there is a delay in projects. That
makes these companies more than willing to meet the rising
expectations of candidates," says E Balaji, chief executive officer of
Ma Foi Management Consultants.

Educational institutes have been quick on the uptake, launching
specialised courses.

Narsee Monjee, the Mumbai-based B-school, has a 2-year programme on
real estate management, while Welingkar Institute offers a diploma in
real estate.

"Property developer Akruti Nirman has its own college. Others have
subjects in specific areas of real estate starting since second year
of graduation if not a full-fledged curriculum," Jones Lang LaSalle
Charatkar said.

According to a Ma Foi Employment Survey, real estate is likely to add
about 47,000 professionals in the organised segment this year.

How will the demand be catered to? Overseas talent is one answer.

"One of our clients brought in German engineers to handle their
projects," said Balaji.

Pranay Vakil, chairman of Knight Frank India said these days he gets
"innumerable" calls from the US, especially from New York.

Knight Frank just recruited a person from Kuwait, who has investment
banking background, while another from the US, with a housing finance
background in the US is also expected to join.

"Salaries in India have become comparable to those in the US, and the
subprime-triggered slump there is helping draw talent," he said.

Another approach could be hiring advisory services instead of hiring
and developing in house talent —- the way UTI Mutual Fund has done.

"We could utilise our existing partnership such as the one with
Shinsei Bank. We may only mobilise funds and leave the fund management
job to other firms that have the expertise. However, this is in the
planning stage yet," said UTI Mutual Fund's spokesperson Debashish
Mohanty.