In the year 2000 when the life insurance industry started and the BPO industry was booming there was a serious shortage of people in the financial services industry. So people were plucked from almost all other industries. Zerox, Canon, Eureka Forbes were regularly raided for sales people. FMCG companies were raided for marketing people and the pharmaceutical industry was the biggest provider of salesmen.
People were offered salaries far higher than what they were getting. To take an example – a small town sales representative wh was earning Rs. 100,000 a year was offered Rs. 12000 a month. Over all the financial services industry was booming – and like a friend in HR said, the only question was ‘When can you join…no other question was allowed. Then other companies came and said…Oh you are drawing Rs. 144,000 we will pay you Rs. 288,000. Thus inflated salaries got doubled. The industry now had people who honestly believed that they were fully priced at Rs. 3 lakhs, but they were getting offers at Rs. 5L or 6L. Then the salary went to 9L.
Now that the regulator has asked people to reduce costs, almost all life insurance companies are sacking en-masse! Now if you do sack 1500 sales men, you need to sack managers managing them, the managers managing the managers, the trainers who were training them – so the total slaughter goes up from 1500 to 3000.
I heard that Icici Bank has decided to absorb all the people being removed from Icici lombard – not sure, just heard. Sure, Hdfc bank, Kotak bank, SBI can follow suit can they not?
A more radical suggestion is what I have. If the managements were to call all these people who are being removed and renegotiate their salary – and say…’At Rs. 14 lakhs, you are too expensive…we can keep you..other conditions remain the same..but we will pay you Rs. 9 lakhs’…it might work, not sure how many Managing Directors have the guts to try something like this. According to a friend of mine…they would not dare to do it…lest somebody make them that offer 🙂
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