What does the Ambani Adani ‘no poaching pact’ actually mean?

It is not a new idea in India. The agreement is to make sure they retain their talent before big-ticket investments in renewable energy, petrochemicals, and cement, among other sectors.

Reliance Industries and Adani, India’s largest business groups, have made interesting decisions to sign a “no poaching” agreement. Both behemoths aren’t in direct competition, as things stand. Recent announcements made by both companies will result in them competing. The obvious battlefields are renewable energy and petrochemicals.

India Inc. isn’t the first to adopt the no-poaching principle. It is not a new concept for India Inc. In fact, several large organizations have entered into informal agreements to avoid picking up talent from each other. According to HR consultants, there was an “implicit agreement” between Pepsi and Coca-Cola and Infosys and Wipro, Hindustan Unilever and ITC. As India develops more sectors, the demand for skilled skills and talent has increased. Both Adani and Reliance have ambitious plans. They are therefore compelled to keep their most valuable resource, human talent.

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Bhavishya Sharma (MD, Athena Executive Search & Consulting) stated that the mobile business primarily looked to FMCG majors for talent while the latter sourced their staff from retail. Reliance and Adani are large, scale businesses. He says that talent is not always easy to find and that poaching from each other only harms the ecosystem.

Both these large companies have made the most of the recent decade by moving into high-ticket industries. This includes petrochemicals and oil and gas, power transmission, ports, airports, energy distribution, cement, FMCG, retail, FMCG, renewable energies and other areas. Sharma estimates that the demand for talent in core infrastructure has increased 5-10x, despite a frenetic growth story which often sees revenues double each year. While the two groups are not in direct conflict, they do not want to create a conflict of talent. They recognize that there isn’t enough talent, and it is possible to avoid a demand-supply mismatch.

A head of an executive search company who has had contact with both groups at different times thinks that Adani’s decision last July to enter petrochemicals (an industry in which Reliance holds a dominant position) could have been a reason for Adani not to poach from one another. He says that all this is not often put into writing and is inherently part of nature. The story of talent is far from over. It’s not too soon.

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