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Top Ranked MBA College in Delhi NCR Top Ranked MBA College in Delhi NCR

PGDM-HRM

Over the last two decades, India's image as a land of snake charmers has changed rapidly to that of a power house of human resources. Our greatest resource today is our people, be it our entrepreneurs or our large, young and vibrant working population. India's human resource industry, dominated by talent acquisition in the form of recruitment, temporary staffing and executive search, has been growing be an estimated CAGR of 21% over the last four years and is now estimated at more than INR228 billion. Many global players have entered the Indian market over the last decade and some are poised to make the quantum leap. This market is rapidly moving from a highly fragmented and unorganized sector to a structured and organized industry. The Indian HR solutions industry has grown significantly. This is largely attributed to the change in the mindset of large Indian companies in two ways:

Companies have started increasingly engaging consultants to meet their HR requirements on account of the growing complexity of doing business and talent challenges. They are opting for a temporary staff model to have smaller bench strength to withstand the global economic crisis.

Given this transformation in customer segments, the industry is emerging as more than just a vendor in clients' growth plans. The present HR marketplace in India has some individual freelancers, start-ups, small and medium players, as well as large Indian companies and MNCs. The size of this space is expected to be more than INR228 billion and has grown at a CAGR of 21% in last 5 years.

The industry can be broadly divided into permanent recruitment with a market size of INR23-25 billion, temporary recruitment with a market size of INR 167-170 billion and other segments with a market size of INR 33-38 bn The strong growth witnessed by the sector has brought a combination of opportunities as well as challenges. Permanent recruitment has grown on the back of growth in key customer industries, with large MNCs entering the Indian market and expanding their presence, as well as the emergence of new industries. However, permanent recruitment companies face challenges in the form of high attrition and competition from online portals. Temporary recruitment companies are growing with organizations that are gradually increasing their share of temporary staff in their total workforce to withstand the economic downturn - recognizing the merits of having temporary staff. However, such companies face high attrition rates with clients absorbing temporary staff, pressure on their working capital and compliance with laws applicable to permanent staff. HR solutions is a highly competitive and fragmented industry that is poised for enormous growth in the next 10 years as companies increase their investment in their HR infrastructure.

Furthermore, changing market dynamics and global competitive pressures has resulted in business becoming more complex, making companies realize the importance of having the right employees undertaking complex tasks and outsourcing non-core activities. Those that were earlier reluctant to engage external vendors now consider HR consultants to be their partners in their organizations' growth strategy. Temporary and permanent recruitment are estimated to contribute 86%1 to the overall market size. Temporary recruitment (staffing) has the largest share at 73%1 of the market, since it includes pass through salary costs. Permanent recruitment has a 13%1 share and only includes the net fees from each successful referral.

The others categories primarily include small and emerging offerings such as the following:

  1. Payroll administration (producing checks, handling taxes, dealing with sick-time and vacations), employee benefits (health, medical, life insurance, cafeteria, etc.)
  2. Recruitment process outsourcing,
  3. HR management and consulting (benefit consulting, hiring and firing, background interviews, exit interviews and wage reviews),
  4. Employment training
  5. Online job portals (sourcing of candidates).