Even though the recruitment services industry began 20 years ago, the industry is still in a state of evolution. The last few years saw the appearance of large homegrown players, along with many distinguished global players establishing a significant presence. The staffing industry has seen a huge sway towards recruiting professionals from varied streams such as Finance, Sales, Engineering, IT and Management; and yet it still shows more scope for growth and development. In India, flexi staffing accounts for 75 per cent of the Indian staffing industry and is worth Rs 19,900 crore, permanent recruitment which includes recruiting, contingency and executive search, accounts for 12 per cent (worth Rs 3,250 crore) and other services (RPO, employment training, online job portal, HR Consulting, payroll processing and compliance) comprises 13 per cent (Rs 3,500 crore).
The global recruitment market is fiercely competitive and highly fragmented with numerous players vying for market share. The leading companies account for about one-fifth of the total revenues of the industry. Given the opportunity and considering the pace at which the industry is growing in India, it can easily outnumber all countries in the next 12 years with the sheer size of flexi-staff deployed in the formal sector.
The use of social networking sites, placement agencies and job portals emerged as important talent acquisition and hiring channels in recent times. The need for quality talent, reduction in the time and effort involved, to build a solid and steady pipeline have made these techniques the primary recruitment channels to hire talent. Other techniques such as gamification, referral hiring and crowdsourcing are increasingly being used. There has been growing adoption of temporary staff to withstand the global crisis. The year 2013 saw growth for both temporary and permanent recruitment, with the temporary/contract market achieving its highest annual turnover since records began. Mainly, it is the small and medium sized IT companies who are employing temporary workers.
Client expectations rise as VMS (vendor managed staffing) and MSP (managed service provider) models evolve. Given the integration of contingent staffing into the structure of workforce planning and management, it’s not surprising that clients are betting on the VMS and MSP models of contingent workforce procurement and management. The pace of consolidation of temporary recruitment industry is high with larger firms acquiring smaller firms in various countries and this trend is likely to continue as the emerging markets are showing lucrative opportunities for the global recruitment firms.
The rising operating costs, which include the salary and rental payouts in the major cities, are burdening the organizations operating there. This acts as a threat for the small players to compensate and win in the changing inflationary market. Besides that, the overall stagnant growth outlook in the economy can serve as a huge threat to the Indian recruitment industry in India.
As told to People Matters