New Delhi: Stefano Colli Lanzi, chief executive of Italy-based staffing company Gi Group, said he supports regulating the staffing industry and allowing only qualified firms to operate in India.
Lanzi spoke in an interview about the company’s recent acquisition in India, its growth strategy, and the debate about temporary staffing and the socio-economic security of employees. Edited excerpts:
How do you see the Indian staffing industry? How is it different from Europe’s?
The need for a country like India is “flexicurity”—a combination of flexibility and security. Flexibility is a requirement in Europe; even in a country like India where the main issue is development, a flexible workforce is a huge need. I believe that the labour agencies are the best people to channelize it. It’s important how we set up rules—because it can be a problem or a big opportunity. It depends on regulation and quality of the market. It should be clear who can supply flexible workforce and who cannot. The Indian market should be regulated.
You have recently acquired a staffing company in India, what’s your plan?
We are a leading player in the global labour market. We want to grow as an international player in the local market with a global perspective. For Gi Group, the priority has always been to achieve organic growth.
How will you do it in India?
Gi has an expertise on the staffing side. Now we have four segments—the bread and butter basic (temporary) staffing, then we have search and selection, leadership hiring and now we are very prominently getting into RPO (recruitment process outsourcing). We are looking at all segments of the service line and working with a cross section of companies—Indian, MNCs (multinationals)—in different industrial segment…we have now a section which is specifically looking at Indians who are looking for opportunities outside like Middle-East and Africa.
How much have you invested in India in last couple of years?
We have invested something like €8 million; this includes purchase of a small (staffing) company. Currently, we are in all the major cities. There is a huge opportunity in Bhubaneswar. We are open to going to cities like Jamshedpur, Bhubaneswar, etc.
Which region is contributing the most to your revenue?
The north, west and south have done well. Delhi, Mumbai and Bangalore are the hubs. Going forward also, the growth is definitely going to be in these cities. I also don’t rule out the possibility of growth coming from other cities as well. The upcoming (major) cities like Lucknow and Kanpur, Jamshedpur, Ranchi have huge opportunities. It’s about tapping the right companies and the right people, and creating a market for yourself.
The global economy, especially the countries in Europe, has been facing a tough time. Has it affected the staffing industry in general and GI in particular?
We are losing some 15-20% in 2012, compared with 2011, in revenue. But I am absolutely sure that once the economy turns around, we will recover all the losses. We are positive on India growth and look forward to having it as a key contributor in our global portfolio.
You have talked about regulation of staffing firms.
One learning that can be implemented in India is of a qualified player as a pre-requisite to operate in the staffing industry. More the number of players, specially the smaller players, it is difficult to govern and ensure compliance. Legislation can assign a “minimum capital” as a pre-requisite to obtain a licence. This will regulate the entry of private agencies and will favour compliance of the rules.
In the unorganized sector, the pay is less. By working through an organized player in the market, a company benefits much more. When you get into a more organized framework, the companies can be assured that the employees will get what the government regulations demand. If I don’t follow the statutory requirement, then I will put my business in the line. We are in favour of regulation of temporary staffing.