The Indian HR service buyer has seen the HR industry progress significantly in the last 12 months. Technology’s influence on HR services has been sizeable and this has broadened the spectrum of services on offer in the Indian market. A buyer has a range of services to choose from depending on the maturity of HR in his organization. While some segments have seen more activity, there are some gaps that continue to exist. The coming months will push the HR buyer to increase investments in HR services. The higher level of demand from HR and the introduction of newer services will compel CHROs and business heads to increase their investments in HR services.

Greater efficiencies from HR service

Many buying organizations realize that the role of HR is evolving and they can no longer continue to spend most of their time on administrative HR. HR in organizations, therefore, are looking for services which can allow them to spend more time on their more important business priority. This signals the increasing maturity of the Indian consumer market. The maturity, however, depends a lot on how prepared HR organizations are to take on higher order challenges of the business through human capital management. It is important for HR in companies to relinquish their administrative and transactional role profiles and look to contribute more strategically to the business.

The shift in the mindset is the biggest challenge that organizations will face during the transition process of HR from transactional to strategic. Like other geographies, the role of HR will evolve to design and management of human capital strategies and Indian HR professionals should look to build their capabilities accordingly.

There is a host of services available to the Indian consumer, and with the growing number of innovations in technology, the quality and value of services will continue to rise. Progressive HR consumers will look to maximise these opportunities and enter into multi-year, multi-service arrangements with service providers. KPIs for success will evolve to include business measures through human capital management.

Strife to increase awareness

Awareness among Indian consumers about services and their benefits is low. There is also the mindset of proving immediate RoI outcomes, which hinders consumer organizations to drive the business case. It is important that CHROs make concerted efforts to educate the business about the short- and long-term benefits of employing HR services to the business.

It is also important for Indian organizations to educate themselves about some of the key global HR trends so that they can make future human capital plans accordingly. HR organizations should try and diminish the resistance towards vendor-lock in through multi-year arrangements.

Through multi-year arrangements, an organization can hope to achieve some strategic outcomes for the business, which is not possible through short-term arrangements. Some recent examples reveal that the client-vendor model is rapidly giving way to the partnership model.

Organizations are looking for service partnerships where the success of the organization is closely tied to the success of the service partner. Service companies across segments are responding to this trend and are creating services, which are customized and consultative.

Rise in capability development and social media investments

Indian consumer organizations continue to face leadership and skill challenges across the acquisition, retention and development components of an employee lifecycle. As a result, services that enable organizations to increase the capability profile of an organization will continue to be in demand. Besides that, Indian consumer organizations will continue to look towards social media based services such as recruiting, learning and development, branding etc. It is fair to predict that Indian consumer organizations will increase their spending on HR services in the coming months.

Opportunities:

1. More value-added services
2. Greater spectrum of available services
3. Introduction of global standards

Threats:

1. Low awareness
2. Strict discretionary spending monitoring
3. Resistance to change