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Empowering from Within: Indian Corporates Embrace Internal Leadership Development

 Indian conglomerates are increasingly looking within to fill top leadership roles, shifting from past reliance on external hires. Companies like Mahindra, Aditya Birla, Vedanta, and L&T aim to source 70-80% of senior positions internally, up from 40-50% just 5-6 years ago. Key drivers include cost savings, quicker hiring, cultural fit, and talent retention. Firms are investing in internal leadership development programs to build a strong pipeline of ready-now talent. This strategy allows continuity, diversity, and risk mitigation for these large, diversified business groups.

In a refreshing shift, leading Indian conglomerates are increasingly looking inward to fill their top leadership roles, signaling a resurgence in cultivating internal talent. This strategic move marks a departure from the previous era of intense external hiring and poaching.


Prominent companies like the Aditya Birla Group, Mahindra Group, Vedanta, Larsen & Toubro, and RPG Enterprises are now aiming to fill 70-80% of their senior management positions with internal candidates, up from the 40-50% range just a few years ago. This shift underscores a renewed commitment to developing and retaining the best talent within their organizations.


"There is an increased emphasis to feed leadership positions with in-house talent," shared Anish Shah, Group CEO & MD of the Mahindra Group. "With focused initiatives on attracting the best talent and nurturing leadership teams within, we aim to provide leaders of tomorrow the right exposure and create a ready pool of high-potential talent to promote."


The benefits of this approach are manifold. Developing leaders from within offers significant cost advantages, as acquiring external talent often comes with a 40% higher price tag. Moreover, internal candidates possess deep knowledge of the company, its culture, and its various business units – invaluable assets in taking on senior roles.


"If internal talent is 60-70% ready, we grow them into the roles in demand," explained Madhu Srivastava, CHRO of Vedanta. "We have many CEOs, CFOs, COOs and heads of businesses who have assumed their leadership roles through internal talent hunts."


Complementing this internal focus, companies are also implementing robust job rotation programs to expose their high-potential employees to diverse roles and experiences. This not only prepares them for future leadership positions but also builds a strong pipeline of talent across existing and new business lines.


"A crucial part of this approach is our job-rotation policy, which ensures that employees gain exposure to diverse roles," said C. Jayakumar, CHRO of the L&T Group. "This policy not only prepares them for future leadership positions, but also builds a robust pipeline for leadership across existing and new lines of business."


The shift towards internal leadership development is also driven by the increasing mandate from boards to derisk organizations and maintain a healthy pipeline of talent. "There is also an increasing thrust from boards to derisk organisations and it is a mandate to the HR heads to keep the leadership talent pipeline healthy," noted Neelesh Gupta, director at Deloitte India.


As Indian corporates embrace this strategic pivot, they are poised to reap the benefits of greater continuity, cultural alignment, and talent retention – all while fostering a dynamic leadership ecosystem that will propel their organizations to new heights.


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