Article: The market is ripe for consolidation: Pankaj Bansal

C-Suite

The market is ripe for consolidation: Pankaj Bansal

Talent processes are directly proportional to the maturity of the market and India's market is maturing rapidly, therefore talent processes will grow
 

The talent market is limited in India and new models have to be adopted to adapt to this business reality

 

The market is ripe for consolidation - Pankaj Bansal, CEO & Co-Founder, PeopleStrong

What is your estimate of the HR services industry in India currently?

The HR consulting market is about Rs. 250 to Rs. 300 crores. The Recruiting industry is $ 1 billion (about Rs.4,500 crores). The HR technology and the process outsourcing market have still not been defined.

Where do you see the industry growing?

I segregate the industry into four parts – The Consulting industry (high value, project based work) – it is seeing some consolidation like ECS got acquired by PwC and Grow Talent got acquired by Right Management. I do not see any firm in this sector going public. Then there’s the HR Technology market (high value, continuous work) which is dominated by large global players and now emerging SaaS based Indian product firms. Then there’s the HR outsourcing market (large amount of standardized, continuous work). In this space there are two kind of players. One is the Staffing/Temping kind of firms whose metrics are how soon they can replace people. The other kind of firm is focused on metrics like Service Level Agreements. The fourth part of the market is pretty mixed, it includes small players in recruiting and training who span all kinds of from high end to front end work. There are also new emerging firms which specialize in specific areas like Back Ground Verification and Employee Mobility and Relocation assistance.

What is driving the growth of the HR services industry?

There are a couple of salient factors. One is that CEOs do not want their HR to do administrative jobs, and instead focus on value adding aspects like strategy, communication and program management. Secondly, the talent market is tight in India and new models have to be adopted by business as they realize that it can’t continue the way it has been in the past. The talent processes are directly proportional to the maturity of the market anywhere. India’s market is maturing and therefore talent processes are also maturing.

Which are the verticals that are actively interested in HR Outsourcing?

IT and ITES industries are very bullish on Recruitment Process Outsourcing. Another group of verticals are interested in what we call “pin code recruiting” outsourcing – focusing on hiring local talent around a locality/town/city. These verticals are Telecom, Pharma, Insurance, Banking and Auto.

What is the future of HR services industry?

There is potential for billion dollar firms to grow in sectors like skilling, training and recruiting. The HRO market will grow at 30% CAGR. Currently there are 28,000 players in recruitment and something like 100 payroll firms – the market is ripe for consolidation. The largest players would be a combination of RPO and BPO services delivered over a technology platform to really add value

How will HR leaders and careers in HR change?

Earlier when we used to talk to HR leaders, their focus was on the number of HR people they hired. Now their focus is on the decisions they make for their businesses. HR has taken enough mindshare of the CEOs and are building their business savvy. Organizations’ business models will also encourage the adoption of new age HR. HR professionals would need to build skills like program management skills and internal change management. There are new careers emerging in the HR Outsourcing industry – as HR people move from transitions to sales and solutions people.
 

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Topics: C-Suite, #Outsourcing, #HRIndustry

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