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Business – FMCGs hire local talent to boost rural business

Shahan Joshi

When in Rome, do as the Romans do… goes the phrase, which is partially what consumer goods companies are adhering to. They are hiring local talent to target rural sales.

Devendra Dube (name changed), a 25-year-old resident of Gorakhpur, was recruited by Dabur as a sales representative for a Tier-3 city. Said A Sudhakar, head, human resources (HR), Dabur India, “A company like ours needs employees who are fluent in local language, tastes and culture, and have the ability to deal with local stockists to help us boost sales from this region.”

Major fast moving consumer goods (FMCG) companies like Hindustan Unilever (HUL), Marico, Godrej Consumer Products, Dabur and even brewers like Sab Miller have stepped up hiring in small towns and rural India – primarily appointing sales staff to increase visibility and connect, and simultaneously boost sales.

Exact numbers are not known, but it’s estimated that over the last 3-4 years the companies have increased hiring of sales staff from small towns and rural areas by over 20 per cent. In 2010, it will only rise.

Consider this: Nearly 50 per cent of Dabur’s sales and marketing staff come from Tier 2-3 regions, according to Sudhakar. The company has 800 employees. Godrej Consumer Products (GCPL) has nearly 1,000 out of its 1,300 employees from villages of India.

There are a number of reasons for this trend. While managerial positions are mobile, these positions are ” usually cosmopolitan”. The FMCG companies now want to break the stereotype. They prefer to localise workforce, which means employing locals to further regional business.

A rural strategy is crucial to the success of FMCG companies since the hinterland accounts for 30-50 per cent of their sales. Dabur gets nearly 50 per cent of its topline from rural markets. The company has introduced products like Lal Danth Manjan with local translations of the packaging, like Telugu and Tamil. Marico has Manjal soap and Oil of Malabar coconut oil solely for non-urban consumers.

Analysts say the reason behind small town recruitment is the higher retention level of employees compared to metros. Studies conducted by companies, which did not want to be named, showed that the average retention time for a small town employee was five years and one belonging to a metro or a top B-school was two years.

“Small town youngsters have fire in their belly. They are more than eager to be trained into delivery mode and one notices a considerable rate of retention for these employees in the past few years. They are what is called stable talent,” said a senior analyst of an HR firm.

This fact is reflected in the hiring pattern of FMCGs. Dabur has staff in Gorakhpur, Varanasi, Kanpur, Mirzapur and other such places, including 10-12 places in the north-east, according to Sudhakar.

GCPL, too, employs from semi-urban areas to establish the “local connect”. The company believes it is imperative for rural growth.

Sumit Mitra, executive vice president, GCPL, said, “The policy of rotation is a short-lived model. It cannot be sustained since it will cause a lack of connect between a person from a metro and a remote village in Tamil Nadu (for example), where we may want to expand our business.” He said that for a managerial level or a more senior level, “it is still alright to recruit from only the metros, but for front sales force, we believe small town India is the way to go.”

The trend appears to have caught on with foreign players, too. Many international players are adopting similar strategies to penetrate India’s heartland.

South African brewer Sab Miller, which makers Fosters, Haywards 5000 and Peroni, says that not only its sales force, but also an increasing number of its managers are being employed from these regions.

Sab Miller, which recruits from Orissa, Nagpur, Nasik, Kolhapur and Trichy, believes this strategy is paying dividends.

The company avoids posting employees in their hometowns, which ensures that they are in a constant state of rotation – a model that Sab Miller believes will help it in the long run.

“This strategy is the only way we can brand ourselves in smaller towns, considering we are just five years old in India. It is stable and consistent,” said Hari Krishna, head (human resources), Sab Miller India. Krishna added that the company recruited from the prominent B-schools in small towns to tap talent.


January 11, 2010 - Posted by | Uncategorized |

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