The last couple of years have been challenging for the recruitment industry. Attrition has gone down and organizations are cautiously expanding. As a result, business has been slow and there were very few high growth events to write off. That said, there are signals that the coming months will be positive for the recruitment industry in India.

While recruiters are taking a cautiously optimistic view, the focus for recruiters in the coming months is beginning to shift. Up until now, recruiting organizations were purely looking at ways to control margins. Market sentiments indicate that recruiting organizations are now looking at expanding their businesses and hiring talent with a long-term perspective in mind.

It cannot be denied that technology has shaken the recruitment industry in India at its roots, both in a good and a bad way. Information is available to everyone freely, including clients, and therefore plain vanilla providers who claim cost and time efficiencies to source talent will die. Hence, the market will see several changes in the coming times, including an increase in in-sourcing and RPO. These developments will compete with the agency-model head-on and mostly affect small agencies in the sub 20-lakh segment. This is because most organizations will look for RPO in place of hiring multiple agencies and take the in-sourcing route.

For large recruitment service companies, becoming aggregators is a better value proposition than continuing with the “we too” approach. Some of the hype about social media and technology is over-rated. While social media and technology have changed the nature of services, predictions that it will annihilate the recruitment services industry are unfounded. When job portals came into being, similar fears were allayed. While technology has and will change things to a certain degree, recruitment services will continue to be valuable.

RPO has emerged in a big way and poses a big threat to smaller recruitment agencies. While it is still at its nascent stage, this segment will pick up in the coming times. The segment of recruitment services in India is still not a very mature industry and the space will likely see a lot of consolidation in the coming times.

As told to People Matters