News: Recruitment: Working towards incremental growth & sustainability


Recruitment: Working towards incremental growth & sustainability

An overview of the past, present and future of the recruitment industry
Recruitment: Working towards incremental growth & sustainability

The recruitment market, globally and in India, is dominated by staffing that comprises around 75% of the market


The recruitment industry is probably one of the oldest among the service industries in the world and it is still the largest segment of the HR industry with an annual turnover of over $400 billion globally. It started post World War II, predominantly in war affected countries, where there was a large influx of employable people returning to jobs, giving rise to the temporary staffing industry. In India, recruitment services started about 20 years back when the economy got liberalized and there was a sudden spike in the demand for talent. 

More than 99% of the 20,000 players in the industry comprise niche or boutique firms, which operate either in one city, one industry, or with one client. The last 5 years has seen the emergence of large homegrown players along with most of the renowned global players establishing a sizeable presence.

The recruitment market, globally and in India, is dominated by staffing that comprises around 75% of the market. Staffing is a large volume business with thousands of people employed in this segment. Temporary staffing in India, however, is a relatively new phenomenon and has been around only in the last 12-13 years. The staffing industry is valued at an estimated Rs. 16,000 crores and the permanent recruitment business is valued at approximately Rs. 4,000 crores in India. The permanent recruitment segment includes recruiting, contingency and executive search and comprises about 15% of the market. 10% of the market is comprised of recruitment consultancy services, including assessments, salary benchmarking services, and satisfaction surveys. Technology companies, including portals constitute the remaining 5% of the recruitment market in India.

Kamal Karanth, CEO at Kelly Services India highlights that staffing presents huge opportunities for the industry. In India there are 13 lakh temp workers presently in the organized sector and estimates by the Indian Staffing Federation (ISF) project that the demand will swell to 90 lakh, across the next 10 years. Managed services, or services where a single provider manages the overall staffing span of a company, is another key area where large recruitment companies will be looking to diversify. For homegrown companies, two challenges will likely be key areas for concern, scaling up, and the ability to find the right people. E. Balaji, MD and CEO at Randstad India, highlights that for global companies, understanding the dynamics and characteristics of the Indian market will be a core challenge. Another core challenge for most recruiting companies across 2013 will be low operating margins. Ashok Reddy, CEO at Teamlease, highlights that it will be essential to look at how to scale the business and make the business independent of one or two core people.

While the outlook for 2013 is expected to remain fairly static, the recruiting industry will likely witness changes in terms of consolidation, new delivery models, and a greater reliance on technology. 

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Topics: C-Suite, Talent Acquisition, #Trends, #Outsourcing, #HRIndustry

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