Sanjeev Bikhchandani, CEO, Naukri.com talks to People Matters about the impact of the slowdown on hiring, impediments in the Indian education sector, empowerment of employees and much more…

Naukri.com was founded 12 years ago. How would you describe the evolution of recruitment in the last 12 years? In what ways has technology changed the recruitment landscape in India?

A lot has changed in the last 12 years. When Naukri.com was launched, there were just 14,000 internet accounts in the country and very few companies had email. The IT industry was still nascent and the BPO industry had not even started. The last decade has stood witness to a complete business and economic cycles of growth and meltdown. The recruitment industry, in the last 12 years, has moved forward a lot in terms of size and scale, the kind of industries it is catering to, the changes in the composition of hiring as new industries have come up which were not there when we started like telecom, private banking, IT companies, BPO and even food chain industry. I would say that urban India, the recruitment landscape and the kind of jobs were very different then and have changed dramatically in last 12 years.

How did the recent downturn affect the recruitment industry in general? Do you think online players have benefited from this downturn as a result of companies looking at more economical ways to recruit?

I think the last 12-15 months have been very difficult for many recruitment firms as hiring has seen a downward trend. Fewer companies are hiring and some have downsized. But I think the Indian industry will go through this periodic phase. A slowdown is actually an opportunity to bring back efficiency, to keep costs under control and to prepare for the upturn when it comes. Although, the economy has been reeling under a slowdown; the good thing is that India is still growing at 6% plus, which is very different from Europe and US.

How do you see 2010? What is your view on recruitment picking up again? In which industries/sectors do you see recruitment to grow the fastest in 2010?

Although companies are more cautious; recruitment is picking up as companies are once again positive in their forecast. I think the first half of this financial year was challenging, but the second half will be a lot better and recruitments have picked up in the infrastructure sector and the general service sector. IT/ITeS is still taking some time but should show improvement in another quarter. So, even though the performance is patchy across some sectors, there is an overall increase in recruitment.

At what level of organizational hierarchy do you see a big mismatch between demand and supply of talent? Do you think that the mismatch is because of lack of educational facilities or because of cultural reasons?

I believe that there is a lot of mismatch between demand and supply at the entry level. Recruitment is still low and there are freshers passing out of college every year. Mismatch has always been there because when companies hire less; they cut back on the hiring of freshers before cutting back on the hiring of experienced people. This is because companies feel that experienced people start contributing from day one. Similarly, when recovery happens, companies first do replacement hiring of experienced people and after that of freshers because freshers take time to start contributing. So, the entry level market will still be somewhat challenging this year but it will be better than last year.

Do you see education in India coping with the enormous requirements of the industry? Do you think we are going in the right direction in this area?

Let’s divide education into three domains: school education, higher education and vocational education. For school education, we have private schools and government schools. I think, the private schools by and large provide a decent level of education. The crisis is in the government schools, which need to improve substantially. At the higher education level, there are the state funded education systems and the private higher education players and I think there are different kinds of problems with both. Apart from a few centres of excellence such as the IITs and the IIMs the state funded education system is run by the mediocre bureaucracy which doesn’t give great inputs and which subsidises education of poor quality, and this is is not scalable. The problem with India is that there are a few very good quality institutions, which have grabbed all the attention. But if we go below the top few institutions, there are very average quality institutions both in the private and state funded sector. The third domain is the vocational education, which is largely state funded/state subsidised and we have a crisis there as well. Although the government is taking steps to improve the quality of education, it must encourage private capital in higher education and should encourage the best universities of the world to come to India. The Indian education sector needs massive overhauling and improvement in the quality of education imparted. The time has come to change the policy and to execute the plan of action. However, it is easier said than done. That’s because of sheer volumes and also because the government is not great at execution of large operations. The private sectors are setting up schools, but the fact of the matter is that if we want poor people to get educated in schools, those schools will necessarily have to be government run and funded because private schools will charge a certain fee to meet the costs and expenses and not everybody can afford it. So, it becomes a barrier and that’s another challenge.

As a promoter, do you find it easy to let go off the reins of the company and let a professional management get on with its job? At what level of organizational decision-making do you see it right to get involved?

I think the quality of hires that a company makes above a certain level needs to be very good and we spend a lot of time on this front. At the leadership level we would rather keep a position vacant for several months rather than hire the wrong person. Secondly, we encourage people to think long-term in the company. So retention of high quality talent is really important to us. We also believe in sharing wealth and have a very strong ESOP and long term compensation program that are working well. What happens here is that if a person stays with us for two years, he/she tends to stay for long-term because the empowerment is much higher than the other companies and therefore once they get used to that, it gets hard for them to work in any other environment. I think empowerment is the biggest retention tool at Naukri.com apart from the fact that employees here can speak their mind. One thing that I always tell everybody in our induction programs is that the one thing you won’t be pulled up for is to disagree with your boss! Independent thinking is encouraged.

You were saying that new industries have come up in the last 12 years. How do you see the contribution of online recruitment to the growth of these industries?

I think what the online recruitment sites have done is that they have increased the velocity of hiring. So, if earlier it took eight weeks to fill a vacancy and then six weeks for the person to join, today you can make an offer to somebody in 10 days or two weeks and get the person joining in one month. This way, a person can be brought onboard in only six weeks and consequently, the business moves faster. This is precisely what the online recruitment industry has done -- it has made the market more efficient. Even for the candidates, this is a fantastic opportunity as they have access to all the jobs in the market and the recruiters at one place.