People. Passion. Performance. “Next Marking” Management Education

HRiday, the HR Club at Goa Institute of Management

presents

Samiksha 2017

An HR Case-study competition

Finding the right fit: A new approach- Kahiro Pvt. Ltd.

Dear Participants,

Greetings from HRiday, the Human Resources club at Goa Institute of Management! We thank you for your participation

and interest in our National HR Case Study Competition, Samiksha.

Please find below the case for Samiksha 2017. Instructions for submitting your entries for round 1 are mentioned in the

document attached along with this email. In case of any other queries please feel free to contact us.

Wish you all the best!

DISCLAIMER

(c) 2017 HRiday, HR Club of Goa Institute of Management. All rights reserved. This case has been developed based on

field research. All identifying particulars, including the names of the executives, have been camouflaged. Written by

members of HRiday, the HR Club of Goa Institute of Management (GIM), Goa, India. This case should not be used for any

other purpose without the express permission of GIM. Participants shall not mail this case or post the case or upload the

presentations about it anywhere without the expressed permission of HRiday.

Finding the right fit: A new approach- Kahiro Pvt. Ltd.

“So what are you planning to do differently now?”

These words rang in his head like an alarm. He tried to fill himself with positive thoughts to take on the new day with gusto.

But his mind kept reverting to the same question that had been bothering him for almost 6 months—what should they do

differently now? In fact, he wondered, what had gone so dramatically wrong in the past few months that they were just not

able to close on the position of an R&D manager for their new plant in Pondicherry.

Ashish Sharma is a Senior Recruiter for the Talent Acquisition team at the R&D division at Kahiro Pharmaceuticals Pvt. Ltd.

He had been working for the company for over two years now. Ever since the introduction of the new R&D plant in

Pondicherry, he had been working tirelessly towards filling open positions for the divisions within the plant. However,

despite having successfully closed around 13 positions across the existing divisions, the role of the main R&D manager still

remained vacant.

Could it be that the package as a whole- including pay, location, title, role- was not attractive enough? Or was there

something wrong with their approach? Whatever be the problem, the hiring manager’s words were clear. He wanted a plan

and he wanted it within a week. All Ashish knew as of now, was that his days were about to get much more stressful than

they already are.

Background of the Company:

Founded in 1979, Kahiro Pvt. Ltd. is a Pharmaceutical company that works towards using technology to create and develop

robust products for diverse markets across the world. Their mission has always been to focus on innovation, technology and

integrity. The company currently has its headquarters in the US, and can boast of an employee strength of around 15,000

employees and customers in over 150 countries. Since its inception Kahiro Pharmaceuticals has come a long way from having

just five products under its umbrella to treat cardiology patients, to becoming the global leaders in the areas of cardiology,

diabetes and orthopedics medication.

Employees who have just joined the company have testified that they enjoy a good work-life balance at Kahiro-- something

which is not easy to maintain and which was lacking in their previous organizations. According to the employees, the

company has helped them hone their skills. It has always created a psychologically safe environment where the sharing of

new ideas and methods to solve problems is encouraged. The employees are happy and content with their jobs and are able

to showcase their true potential in this organization.

R&D Center:

Kahiro thrives itself on a strong research and development team. The company initially started out with only one R&D center

in Singapore in the whole of the APAC region. However, India being one of the fast growing markets in terms of domestic

demand, the company soon found the need to expand and set up an R&D center in Pondicherry, India. The company was

facing growing competition from companies like Jasmine Laboratories Ltd, a leading health care company in Pondicherry. In

order to gain competitive advantage, the company needed to cater to the increasingly diverse demands of the Indian

market. The new R&D plant set up in Pondicherry would help them to make tailor made products which suited the

preferences, climate and other requirements specific to India. In addition to that, the Indian market being cheaper than the

Singapore market, it was more economical to open a new center in India.

The center initially consisted of 3 divisions. On learning that these 3 divisions were doing remarkably well, the company

decided to open a 4th division in November 2016. Each division was made up of a 5-member team (Exhibit 1). The entire

R&D center (including all 4 divisions) was to be managed by one R&D manager, with a project manager under him.

Hiring within the plant:

Ms. Gauri Bose heads the R&D division in the APAC region. Ms. Bose has 16 years of extensive experience in the field of

Product Development and Research. She is an Indian citizen, expatriated to the US. However, for all practical purposes, she

is the sole decision maker while hiring for any key position in the R&D plant in India, especially the new plant set up in

Pondicherry. On the other hand, Aashish and his team in Pondicherry were responsible for sourcing CVs, scanning them

based on their requirements and shortlisting candidates for the next round of interview.

Initially, after CVs were shortlisted1, the candidates had to directly go through a telephonic interview with the hiring

manager in the US, based on which the candidates were selected for the role. This however turned out to be an ineffective

method of selection since candidates usually tended to sound more confident over call rather than during a face to face

interview or a Skype call. They then decided to change the process. Once the CVs were shortlisted, the recruitment team in

Pondicherry would conduct a telephonic interview with the candidates. Skype interviews with the hiring manager were then

1 Shortlisting of CVs were done by consultants who were hired by the company.

scheduled only for those who performed well in the telephonic round of interview. Despite these efforts, a lot of candidates

were still being rejected at the interview level even though on screening, their CVs were found to be perfectly apt for the

particular role.

The current process seemed to be working well for the positions in the first three divisions. However, there were some

positions in the 3rd and 4th division which were yet to be filled. R&D being a niche field, they faced competition from other

companies. Poaching was difficult because companies would offer a hike in salary to retain good candidates. Kahiro, too,

fought back by offering better compensation. Once a few candidates were taken onboard, they were able to rope in

candidates for other open positions through referrals. “We aren’t too worried about the positions within the cell”, says

Aashish.

Their major concern for the past few months has been to fill the position for the R&D manager who will take charge of all

the 4 divisions. It wasn’t just the problem of finding the right fit. Even though the recruitment team was able to find people

who matched the job description to the T, the candidate would either get rejected by the hiring manager, or would decline

the offer.

Closing the deal- issues faced:

In terms of compensation, the company was willing to offer a package which falls in line with the 50th percentile of the

industry (Exhibit 2). This included all functions except for sales. The compensation structure included a fixed component of

around 45 LPA2 and a 15% variable pay on the fixed amount. A one-time relocation allowance3 was also given to candidates

outside Pondicherry. Moreover, the company provided for a 15 day stay in a hotel for the selected candidates and their

family. The employees were also offered stock options 4 once in 5 years. This was allocated as per the company’s discretion.

On joining, the company would make sure that they are well oriented into the culture of the organization. They would get

the opportunity to travel to the US to get acquainted with the team there. The US team, too, would make trips to India in

order to stay connected with the team. However, despite the compensation and benefits offered, the company still wasn’t

able to make the offer attractive enough for candidates to accept it and come onboard.

Moreover, a few candidates were of the opinion that the title being offered was a little misguiding. While the competencies

required for this kind of a role were that of a Director, the title being offered was ‘Manager’. To have a 11A grade employee

at a manager level was not normal as per the local industry standards (Exhibit 3). However, Kahiro being a US based

company, they had to follow the titles defined by the US policy. Hence, the title of ‘Manager’ for this particular role could

not be changed.

Looking at the demographics of the candidates being shortlisted, most of them are in their early-30s, married and either

settled or in the process of getting settled with their respective families. A major issue highlighted by potential candidates

is the inconvenience associated with moving to a new location at this juncture in their lives. To add to the problem, some

of the candidates were from metropolitan cities and R&D hubs like Bangalore, Mumbai and Hyderabad. Moving to a smaller

city was a big decision to take, and not all of them were comfortable with it.

2 LPA - Lakhs Per Annum 3 One-time relocation allowance of up to 40-100% premium of the monthly salary was given to new joiners. 4 Stock options under which employees above level 10 were offered stock options.

Working with the hiring manager’s expectations:

Given Ms. Bose’s level of expertise and experience, it came as no surprise that her expectations for hiring the perfect

candidate for the job were quite high. However, the recruitment team in Pondicherry soon found that there was a huge

disconnect between their idea of the perfect candidate and the expectations of the hiring manager. This was reflected in

the rate at which shortlisted candidates were being rejected by her.

There were instances wherein the recruitment team would find a candidate who perfectly matched the competencies listed

in the job description, however their candidature was rejected by Ms. Bose on the grounds of having low communication

skills or no relevant R&D experience. There were also times wherein the same candidates which were rejected by Ms. Bose

were selected at a later stage within the cell after being referred by an existing employee in the organization. On joining,

these candidates were known to perform well with no complaints from the team. This made the recruitment team wonder

what really was the basis of her rejecting the CVs which they shortlisted in the first place. Should they merely trust the hiring

manager’s choices or should they acknowledge that there is a major disconnect between their expectations and that of Ms.

Bose?

As if finding the right fit for an R&D manager wasn’t difficult enough, Ms. Bose decided to narrow down the pool of choices.

The initial hiring pool comprised of the healthcare industry. However, she later specified that she wanted to hire only from

the healthcare management sector. In addition to that, she also wanted someone with strong research experience in order

to be able to effectively manage the plant. This narrowed down their available options even further as the required

combination of skills within the desired sector was difficult to find in the market. The recruitment team found Ms. Bose’s

expectations to be unrealistic but couldn’t do much about it since the final selection was in her hands after all.

Approaching consultants:

Kahiro, being known for its use of cutting edge technology to make differentiated products; they couldn’t afford to lag

behind or let their business get affected due to an ineffective R&D plant. Hence, they sought the help of two consultants

and hoped that they would draw up a conclusive and comprehensive action plan in order to find the candidate with the

required competencies and fill the position of the R&D manager.

The first consultant they approached was Talent horizons, whose job was to shortlist CVs for the position so that they could

further be interviewed by the hiring manager in the US. They were of the opinion that the root cause of the problem was

the salary which was being offered for the job. They claimed that if the salary would be made a little more competitive, they

would be able to attract better talent. The hiring manager wasn’t entirely reluctant to hike up the pay. “I’m willing to go up

to 60 LPA. However, for that, you need to bring me a superstar!”

The second consultant they approached was A to Z solutions. They had a completely different view point from the other

consultant. According to them, the location of the plant was the prime cause of the problem. Also, R&D being a niche market,

there were not a lot of options to look from in order to find the right fit.

One of the major issues faced with the consultants was that with the rate at which the offers made by the company were

declined or the CVs were being rejected by Ms. Bose, the talent pool for the required skill set was getting exhausted. It

started to become increasingly difficult for the consultants to source the right person for the job. Secondly some of the

consultants had disagreements among themselves as to what was the main cause of the problem which was counter-

productive for the company as a whole. Moreover, none of them were able to come up with a conclusive action plan to take

things forward.

The way ahead:

It seemed as though everything that they had tried so far has failed. From Aashish’s perspective, the problem is not just

from the recruitment end, it was much deeper. Nevertheless, a decision needed to be taken, and he needed to present a

new plan before the hiring manager within a week. It was time to start afresh and revisit the problem from a new

perspective.

Exhibit 1: Organizational Structure

Exhibit 2: Industry Benchmark

Industry Benchmark

1st Percentile Minimum 30 LPA

50th Percentile Median 45 LPA 99th Percentile Maximum 60 LPA

Exhibit 3: Grading System

Grade Management Level

1-7 Lower Management 8-10 Middle Management

11A-13A Top Management