New Delhi: India’s recruitment industry never had it this good.
Futurestep India, the recruitment outsourcing subsidiary of human capital resources provider Korn/Ferry International, opened its second office this week riding high on an increasing demand for recruitment services in the country. Its turnover grew 300% since it began its India operations in September 2005.
The industry is witnessing a year-on-year (YoY) growth of 40-50%. The market, including temporary staffing, permanent hiring, job boards and retained search, is estimated at Rs1,500 crore and is likely to grow to Rs2,500 crore by 2010, says a study by trade and investment consultancy Ace Global Pvt. Ltd for Manpower Services India Pvt. Ltd, an executive search firm.
Backed by a fast growing economy with sectors across the board on a hiring spree, the demand for recruitment services has grown exponentially in the recent past. The study says the total number of professionals employed in the IT sector alone grew from 2.84 lakh in 1999-2000 to 16 lakh in 2006-07 with 2.3 lakh IT employees added in 2005-06 and 3.8 lakh hired in 2006-07. The manufacturing sector, which accounts for 28% of India’s gross domestic product, recorded a YoY industrial growth of 10.6% in the first nine months of 2006-07. The auto sector employs more than 500,000, the banking industry around 900,000, with the number expected to go up to 15 million in five years.
Manpower demand has given rise to business for recruiters. As per the survey, the recruitment industry has around 1,000 organized players, and recruiters on an average have been handling more than 500 placements each. Then, there are more than 10,000 smaller players, who handle around 100 placements annually.
The recruitment industry itself has been on a hiring spree because of the huge demand for such services. For instance, the number of recruits for Team Lease Services Pvt. Ltd, a staffing firm, went up 186% in 2005-06 and 94% in 2006-07 and the firm currently has around 72,000 people on its rolls. Meanwhile, it has grown from five offices to 23 set-ups. Team Lease managing director Ashok Reddy says the firm clocked a turnover of Rs267 crore in 2005-06 and Rs560 crore in 2007, till date.
Stanton Chase India also recorded a YoY growth of 31%. “We’ve added over 15% new clients in the past one year,” says Venkat Shastry, partner, Stanton Chase India. For Manpower India, the number of consultants has gone up to 500 in 2007 from 70 in 2004, while the executive search firm posted a growth of more than 130% in?2005-06 and, according to its executive chairman Soumen Basu , “the company is expected to grow 100% over 2006.”
Little wonder that global search firms, too, are placing increasing importance on their Indian operations. “We’ve been strategically building our resources in India to keep pace with the increasingly important role the country is playing on a global and regional level for companies everywhere,” said Tim Nelson, president, Futurestep, Asia Pacific.
Headhunters say India and China are the two fastest-growing markets, “with both clocking around 100% growth,” said Basu.
Interestingly, recruiters are broadening their portfolios, which were skewed towards IT, ITES and financial services sectors. Market watchers say, in the future, retail, manufacturing, telecom, pharma and health care will lead the pack.