Article: Indian recruitment sector witnesses a positive outlook

Strategic HR

Indian recruitment sector witnesses a positive outlook

Demand shifting to outcome-based expectations
Indian recruitment sector witnesses a positive outlook

Recruitment firms need to prepare for future demands, which will be based on their ability to hire the right talent


Many consider the recruitment services industry as the HR industry in India. Considering it constitutes the biggest segment, far outnumbering the other segments in terms of the size of the market and the number of players, it drives many of the changes in the overall industry of HR in India. While it is a big industry, with approximately 20,000 players, the sheer size of the industry itself presents several opportunities and threats. Considering it is such a fragmented industry, it is still far away from being called a mature industry although it has been around for more than 20 years.

Consolidation on the cards

While being a very fragmented industry, there is no single player with double-digit market share. Many national players have started growing and there is also a sizeable presence of the major global players. The new economic conditions will propel consolidation in the market and we may see the emergence of a few players with noticeable market shares. Market conditions also mean that small players with limited product offerings may find it difficult to survive, and may ultimately get acquired by larger firms.

Quality and timeliness will be key to survival

Operating in the recruitment space in India is challenging. The nature of demand is slowly shifting to outcome-based expectations rather than traditional measures. These outcomes are in the form of understanding the right profile of desired candidates, the extent of acceptable gaps between expectation and delivery, and the kind of attributes to measure in a candidate. Thus, the emphasis on quality and timeliness will be of the essence. Temporary workforce will also come to the fore in the coming months as more companies look at alternative options for hiring.

New hiring paradigms

The recruitment industry in India will witness several inventive hiring paradigms. The techniques of gamification, crowdsourcing and referral hiring will increasingly be used in the coming months. Social recruiting, which until last year was a new concept has already entered the mainstream hiring process. Technology solutions make junior and mid-level hiring more convenient, and thus, insourcing and RPO will become big influencers in the market.

Failing to adapt can be fatal

Many small recruitment firms, which operate under a single delivery model based on their networks and connections, will face the threat of existence in the coming months. While some of this threat is due to technology advancements, a part of this threat is also because of the market trend towards managed services and Recruitment Process Outsourcing (RPO). Recruitment services, which fail to adapt and readjust their go-to-market offering, will find it difficult to survive. India is a price sensitive country and service providers have to keep in mind that though companies are on the hunt for new talent, they will have tight budgets.

Time to invest in talent

While the last two years have been tough, most unanimously agree that the outlook for the Indian recruiting industry will be positive in the coming times. Forward-looking companies have already started investing in talent who can help them adapt to the dynamic needs of the market, and enable them to grow and service new products. Many progressive Indian and global recruitment firms in India are likely to hire good talent both for operations and for new businesses.

The outlook for the recruitment industry in India is positive for the coming months. While there are challenges that the new market environment has posed, firms which are able to adapt to the new market conditions will thrive and flourish. Companies have to offer services that can apply to industries across the spectrum. They should also consider expanding the basket of their competence capabilities in order to provide a better service to their customer.

Readjustments to the service offerings, investments in technology, and finding new business opportunities will be key to recruitment services growing in the coming months.


  1. Positive hiring outlook in companies
  2. Staffing & temporary recruitment
  3. Managed services


  1. More emphasis on quality
  2. Tech-based & social recruiting
  3. Changing expectations
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Topics: Strategic HR, Talent Acquisition, #HRInsights, #HRIndustry

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