Over the last two decades, India has grown as 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 17% over the last five years and is now estimated at more than INR 260 billion. Off this, 15% is contributed by permanent staffing. This market is rapidly moving from a highly fragmented and unorganized sector to a structured and organized industry.
Permanent recruitment has been growing 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 because of clients absorbing the 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 are steadily increasing their investment in their HR infrastructure. Furthermore, changing market dynamics and global competitive pressures has resulted in business becoming more complex, making companies realise 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.
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