Recruitment outsourcing to grow by 35 per cent in India

New Delhi: With the country set to face a talent crunch of half million people in the next few years, Recruitment Process Outsourcing (RPO) is posing a lot of opportunities. With emerging sectors like retailing and IT, the need for focused players in recruiting as RPO service providers will increase, according to human capital management company Kenexa Technologies.

“There is an intense war for talent. The hiring projections for India are very rosy and the clients are demanding higher quality candidates with increased efficiency. I feel, RPO as an industry will grow 30 to 35 per cent annually for the next 5 years,” Kenexa Technologies Director Tarun Singh told Mumbai Mirror.

It is estimated that within the Indian market, the total annual spend on recruitment is Rs 700-800 crore. This can theoretically be considered the potential size of the RPO business, a subset of human resource outsourcing (HRO), that can be generated from locally-based companies.

“Hiring pressure is forcing companies outsource the entire recruitment cycle from needs assessment to sourcing, screening, and interviewing candidates, and hiring.

In fact, 80 per cent of HR personnel are engaged in recruitment process and in between they fail to focus on other core HR activities, including training, staffing needs, ensuring performance. Here enters RPO that takes care of the entire recruitment headache and saves time and cost of companies too.” Kelly Services India Country General Manager Achal Khanna pointed out.

A Nasscom-McKinsey report has projected that the Indian firms’ revenues from HRO will increase to $3.5 billion by 2008, while Gartner thinks India can expect to win 10-15 per cent of the US HRO services market; and finally, only 6 per cent of US HR spend is offshored, a figure that is certain to rise.

Talking to this newspaper, talent management firm SITI Corporation President and CEO Veena Gundavelli said, “We have serviced about 100 RPO clients in SITI in the last couple of years and we expect to double the customer base with some long term-contracts. The types of customers that we have can broadly be classified into four verticals - IT, engineering, healthcare and financial services industry.”

Gundavelli explained that RPO is primarily being embraced in two models – model one is pure sourcing and providing support services to on-shore US based recruiters to enhance their productivity and effectiveness, model two is full cycle recruiting from sourcing, screening and on-boarding for both temporary contract as well as permanent positions to reduce overall cost of recruiting operations and to improve efficiency at the same time.