Recruitment Outsourcing is the Next Big Thing

Business expected to grow 50% a year as companies farm out hiring functions; staffing firms scale up RPO teams Cos in IT, manufacturing, telecom, pharma and banking driving demand

HR services and staffing firms in India are expanding their teams and operations to cater to the rapidly growing demand for recruitment process outsourcing (RPO) as organisations increasingly farm out all or part of the hiring functions to focus on their core businesses.

With the estimated 400 crore RPO business in India expected to grow at a staggering 40-50% a year for the next few years, firms such as People Strong, Manpower Group, Quess Corp, Randstad and Team Lease Services are attracting a steady stream of new clients.

There is an increasingly sharper focus on understanding of the Indian market for RPO projects, said Pankaj Bansal, cofounder of People Strong. “Corporates are looking not only for a specialisation in sourcing but also in processing and technology , to which attention was not paid a couple of years ago,“ he said.

A few months ago, People Strong inked a deal with software exporter Wipro worth $16 million (about 100 crore), according to an Everest Group report, for a period of five-seven years.

People Strong provides platform based RPO solutions, taking end-to end ownership of permanent recruitments for its clients. It has seen addition of 10 new RPO clients every year and growth of about 100% over the past one year alone.

At Quess Corp ((formerly known as Ikya Human Capital Solutions), plans are underway to expand operations to other parts of the world by leveraging the group’s global presence across eight countries. “We are evaluating partnerships with international RPO firms to drive this next phase of growth,“ said Guruprasad Srinivasan, business head, staffing solutions. Startup and growth stage companies are also inviting Quess Corp to discuss RPO possibilities, he said.

As hiring increases and the war for talent intensifies, more and more companies are expected to outsource their recruitment process work. This model helps provide a cost-effective and consistent talent acquisition process, keeping turnaround time low and allowing companies to scale up quickly when the business environment improves.

In India, software, technology and IT sectors are the major torchbearers for RPO growth. However, mid-sized to large companies in manufacturing, telecom, pharmaceuticals, healthcare and banking sectors are also driving demand.

In the global market, multinational companies are increasingly seeking a single RPO service provider across multiple locations, with India being one of the primary markets.

“Companies are moving towards regional shared service centres for HR and this is bound to see an increase in global RPO programmes,“ said Srir kanth Rengarajan, executive director t and president, Manpower Group India. He said the company has seen a s threefold increase in business enquiries in global multi-geography RPOs o in the past quarter. At Randstad India, the growth in this s vertical in 2014 was over 120% and more g than 30 clients have come on board in the O past one year. “The largest contributor f would be `project RPO’ where clients approach us for managing the entire talent acquisition process for a specific project. However, end-to-end RPO offering is also gaining prominence,“ said Moorthy K Uppaluri, CEO of Randstad India.

Little wonder then, these companies are also fast scaling up their RPO teams. Quess Corp plans to double headcount to manage new r RPOs while People Strong plans to increase its team size by 50%, hiring , recruitment specialists from IT, engi neering and automobile sectors. Team Lease Services also plans to add 50 peo l ple to its current 150-strong team. a “There is a realisation that an RPO s provider’s job does not stop at hiring g but reaches deep into the onboarding process to ensure best fit,“ said up Ku nal Sen, senior vice president at Team R Lease Services.

Source: The Economic Times

Date: July 14, 2015

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