In selection and placement, services used are more transactional in nature and driven by a need for fast results with less investment
The nature of vendors in India is very diverse - Deepa Mohamed, Group Head HR & Training, SMC Group
What are the challenges that buyers face for their HR decisions in the organization?
The business of HR today is very fragmented both in terms of the nature of the players in this industry and also the size and offerings that they have. As a result to that there is an issue about access to information and transparency in terms of credentials and reputation of the players in the industry as most of them are very young. This is especially true for the categories of recruitment and technology for example, where the buyer has no protection against unethical practices. Today, there is no accredited listing of services providers in this space where buyers can refer to and use as protection. Another issue is the ability for those companies to scale up at the speed the buyers need it. The organization faces a challenge to be able to grow at the business required speed and find partners that can support that growth.
The way vendors operate is different also based on the nature of the organizations; for example, you have the entrepreneur/start-up vendors; we have seen many new organizations arising in this industry in all categories. They are normally one-man-show, young organizations, more flexible but with concerns in terms of credentials of previous work done and scalability. Then you have Indian SMS, they are medium organizations in terms of revenue and number of people, their reach and scalability is better but then their mindset and the access to global standards might not be as required. Then you have the Indian MNC, they are large in terms of turnover, number of people, their mindset is Indian but they are more open to global exposure, these firms are able to scale and learn faster. Finally you have the MNCs that provide an global benchmarks, quality processes and technology but sometimes lack the Indian context or perspective.
How does decision making happens for HR Decisions?
The process is very different depending on what type of product or service you are buying. For example, in the selection and placement, normally these services are more transactional and are driven by results so the organization drives the purchasing patterns based on who is actually able to bring best candidates and support them joining and staying. For HR Technology and HR Consulting for example the process is much more complex as HR Head is also not the only decision maker in most organizations and CTO and even CEO is involved in the decision making process. These are high value transaction and also it requires an involvement from both sides in terms of working together so during the tendering process one will also want to look at the teams who you have a more symbiotic relationship. Basically, for the different dimensions in terms of value of the investment, impact of the service/product, how much involvement of the team will be required for the successful delivery of the product or service and then decide for a simple or more complex tendering processes.
What Key Trends do you see in the Industry?
There is a struggle today between how much of the work is done inside and how much outside. I feel that the trend we will see is an increase focus on both HR Shared services and HR outsourcing. More and more organization will be looking at centralizing a lot of the HR activities, group companies might tend to keep this in-house in an HR Shared services model and some will outsource that outside to a 3rd party service provider.