A Stellar Performance

A Stellar Performance

By Pranbihanga Borpuzari | 12 May 2010

After working for executive recruiter Amrop, Shailja Dutt decided to quit her job and start a firm in the same space—a firm that would be cost effective, catering to Indian enterprise needs.

Shailja Dutt had her pick of jobs after obtaining her management degree from IMI, Delhi. Her timing seemed perfect—it was the era of India’s economic liberalization, after all. But Dutt was never satisfied with the rose-colored job market.

She started her career in 1992 with Strategic Management Group and then joined McKinsey Knowledge Center. “In the interim I decided to do something else since I was not enjoying myself and did not feel challenged. I applied simultaneously to two companies. One was with the All India Management Association as a program director for one of their courses. I thought it would be fun because I always loved teaching. The other was with an executive search firm. At that time I did not even know what executive search was. It was a firm called Amrop and it caught my fancy. They were setting up their India office and I liked what I understood of the role. I cleared the interviews and ditched my ambition of teaching.”
Dutt enjoyed her stint at Amrop for three and a half years but realized that despite the fun she was having at work, her real calling lay somewhere else. In 1998, she quit Amrop and decided to set up Stellar Search.
Born in Kolkata to a Marwari family, Dutt says she has business in her genes and the reasons for starting Stellar are twofold. “Firstly, trying to sell the concept of executive search was a huge challenge because it required clients to pay us an equivalent of 5-6 months’ employee salary compared to the one month salary that they were used to paying. It was shifting the paradigm completely,” she recalls.

The thing that worked for Dutt and her team was that with liberalization a lot of firms in the energy sector and telecom firms which had worked with executive search earlier were willing to give Dutt her first break at Amrop. Consequently, many companies started experimenting by hiring trough executive search. By 1998, Dutt realized that there was a market to be tapped and by being a part of a large organization she was governed by a lot of rigid regulations and rules about how business should be done. “I felt that though Indian corporates were coming out and embracing executive search, they were looking for something more cost effective. At the height of the dotcom era I started Stellar.”

Her second reason for leaving Amrop was the birth of her first child; pressures of work made it impossible for her to find time for her son. “Amrop was getting started in the country and it was almost impossible to take a break. That is when I decided to quit,” she says.

The first challenge that Dutt faced was the lack of money. “I had to borrow money from my husband and got started with Rs.50,000 as capital for a desk, a chair and a computer. I operated out of a basement flat in Adchini, Delhi along with another assistant because I thought it was not professional if I picked up the phone when someone calls up,” says Dutt.

She had the same setup for six months after which business started pouring in as clients she had worked with during her stint at Amrop realized that she had started something of her own. “There was a line of people who wanted to work with me. I never looked back after that and we hired a lot of people from the B-schools and that is how we got started.”

An executive search firm is a type of employment agency which specializes in recruiting executive personnel for companies in various industries and typically operates at the most senior level. Executive search professionals are also involved throughout the hiring process, conducting detailed interviews as well as only presenting candidates to clients when they feel the candidate in question will fit into the employment culture of the client.

Since her initial funding, Dutt has never needed to search for more capital infusion. “We have been growing through organic funding. The first year I thought we would do Rs.10 lakh-Rs.12 lakh of billing but we ended up with Rs.24 lakh of billing that year and Rs.60 lakh the next year. We are a Rs.5 crore firm today and now thinking of not just Rs.5 crore of revenue but Rs.5 crore of profits.”

Stellar’s search expertise spans a broad range of industries. It is today the preferred vendor for the retailing and healthcare industry in the country. In addition, it has a strong domain expertise in hiring for auto/auto ancillary, engineering, manufacturing, and IT/ITES.

Dutt says Stellar is different from other such companies in the market due to her direct involvement with the client and the strong backend that she has created. “About 60 percent of our clients are 10 years old and despite changes in management and HR heads at these companies, we have managed to retain them.”
Dutt is very clear that she will not get into the space of placing freshers, a space she feels is done well by job portals. “After a lot of pressure from our clients we have introduced placement of middle management level individuals under a company called Careergene which was launched in late 2009. We did not want to dilute the image of Stellar so we created this captive company,” she says.

The search industry in the country is about Rs.300 crore-Rs.400 crore but Dutt says she does not want Stellar to become a very large firm as her interest lies in being a boutique firm. “From the profitability perspective, we are more profitable than our larger competitors since our overheads are low. If I have Rs.5 crore as profit, my valuations in the market will be Rs.100 crore.”

The future, says Dutt, is very clear for her. The magical figure for her is Rs.100 crore valuations, partnership with a larger firm or a venture capitalist and then diluting stake in the company. “Ideally I would like to sell out to a large firm because I think it will provide stability and career options for a lot of people who work here.”

As part of an industry that is people focused, Dutt’s passion has been largely responsible for her success. Her first assistant who worked with Dutt out of her basement office in Delhi today runs her own consulting firm in Mumbai. “I feel this is the way I have contributed to the lives of people who worked with me,” signs off Dutt.