Description
Temporary recruitment has a share of 73%1 of the overall market, since it includes the pass-through salary costs of employees that are leased to customer organizations
Stepping into the next decade of growth
January 2012
Human resources
solutions industry
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 staffng 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 Executive Recruiters Association (ERA) is a non-proft chamber of
commerce representing Indian executive recruitment consulting frms. ERA
was formed with the objective of creating professional and ethical standards of
recruitment and establishing the recruitment process as an industry.
ERA and Ernst and Young are pleased to present to you the frst comprehensive
report on the Indian recruitment and HR services industry. I would like to express
my gratitude to Ernst and Young and all the industry people who contributed to
making this report.
Vipul Varma
Chairman
ERA
Foreword
Human resources solutions industry
1
1. Introduction ..................................................................................................3
1.1 The Human Resources (HR) solutions industry: an introduction ............................4
1.2 Market size ........................................................................................................5
1.3 Industry structure ..............................................................................................6
2. Permanent recruitment ..........................................................................................7
2.1. Introduction ......................................................................................................8
2.2. Executive search ...............................................................................................9
2.3. Recruitment ....................................................................................................11
2.4. Critical success factors ....................................................................................14
2.5. Market opportunity .........................................................................................15
3. Temporary recruitment ........................................................................................16
3.1. Introduction ....................................................................................................17
3.2. Professional staffng .......................................................................................18
3.3. General staffng ..............................................................................................20
3.4. Critical success factors ....................................................................................23
3.5. Market opportunity .........................................................................................24
4. Other segments of the industry ..........................................................................25
5. The road ahead ......................................................................................................28
6. Appendix ................................................................................................................30
C
o
n
t
e
n
t
s
Human resources solutions industry
2
Over the past few years, the Indian HR solutions industry has grown signifcantly. This is largely attributed to the change in
the mindset of large Indian companies in two ways:
1. Companies have started increasingly engaging consultants to meet their HR requirements on account of the growing
complexity of doing business and talent challenges.
2. 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 INR228 billion in FY11 and has grown at a CAGR of
21% between FY08 and FY11.
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.
Executive summary
Human resources solutions industry
3
1. Introduction
Human resources solutions industry
4
1.1 The HR solutions industry: an introduction
While there is no uniform defnition for the HR solutions industry, for the purpose of this report, we may defne it
as the rewards derived from any decision on buying services for any part of the human capital value chain. The
HR solutions industry can be broadly divided into two main functions — permanent recruitment of executives and
professionals, and temporary recruitment, specializing in professional and general staffng.
HR solutions are being increasingly viewed as a distinct industry with the role of HR consultants evolving with
changing market dynamics.
• Large Indian companies are diversifying into new sectors and prefer candidates with relevant experience.
However, since their HR function fnd it diffcult at times to source candidates from the large and geographically
dispersed talent pool, companies are increasingly looking at external help. This change in approach and mindset
has made sourcing a relatively complex activity, resulting in companies increasingly partnering with recruitment
consultants with a global footprint or access to global databases to source the right candidates.
• The service industry is a people-driven one and is clocking double-digit growth. The service industry has a large
manpower requirement, which facilitates the need for a large HR function to fulfll its growing needs. Since
recruitment is not a recurring activity and is a function of economy and a company‘s growth plans, companies
prefer to partner with consultants to source the right candidates as and when required, and have their HR
function focus on the core and strategic activities of selection, planning and retention.
• Temporary staffng is a growing human resource trend and the phenomenon is fnally catching up in India. While
industry experts estimate employee leasing to be a US$140 billion business worldwide, the domestic staffng
industry has yet to witness large fgures. The scenario is however set to change as companies are increasingly
partnering with consultants, and experts expect that in the near future, 2.5%-3%
1
of the workforce in the country
will be hired on a temporary basis.
HR consultants are now increasingly been viewed as partners in an organization’s
growth strategy rather than just being vendors.
1 Industry estimate
Human resources solutions industry
5
1.2 Market size
The overall organized HR solutions industry grew at a CAGR of 21% between FY08–FY11 from INR127 billion to
INR228 billion
1
.
127
170
202
228
0
50
100
150
200
250
FY08 FY09 FY10 FY11*
I
N
R
b
n
Exhibit 1: Human resources solutions industry revenues and growth rate
1
FY08-FY11(E)
Source: Service tax revenue numbers under the service tax head “Manpower recruitment or supply agency”
Note: As per service tax man power recruitment or supply agency includes any person engaged in providing any service,
directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person”
* FY11 numbers have been calculated by using the 8 months collection numbers upto Nov,2010 and assuming collection to
be proportionate over 12 months
“Although the industry grew at a slower pace in
the recession of 2008-09, larger players were
able to capture business from smaller and
unorganized players to show overall growth.”
–Large recruitment solutions ?rm
The HR solutions market was affected by the global economic slowdown, and slowed a year on year (y-o-y) rate of
34%
1
in FY09 to 13%
1
in FY11. The slowdown forced customer organizations to defer their hiring plans and reduce
their spend on HR.
HR solutions industry market sizing:
Inclusions Exclusions
Permanent recruitment, introduced in 1997 under manpower
recruitment service.
Players fling returns under other service heads
Other services (added in FY07) include services in relation to
pre-recruitment screening, verifcation of the credentials and
antecedents of candidates and the authenticity of documents
submitted by candidates
Players providing services to SEZs
Temporary recruitment — defnition added in FY08 Players with a turnover of INR1 million and below
The overall size of the industry may be marginally higher, given some of the exclusions in service tax defnition.
1The market size has been calculated by dividing the service tax collected during the year from the service tax records with the service tax rate
Human resources solutions industry
6
1.3 Industry structure
The HR solution industry comprises:
• Permanent recruitment
• Temporary recruitment
• Other segments
Temporary and permanent recruitment are estimated to contribute 86%
1
to the overall market size. Temporary
recruitment (staffng) 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:
• Payroll administration (producing checks, handling taxes, dealing with sick-time and vacations), employee
benefts (health, medical, life insurance, cafeteria, etc.)
• Recruitment process outsourcing,
• HR management and consulting (beneft consulting, hiring and fring, background interviews, exit interviews and
wage reviews),
• Employment training
• Online job portals (sourcing of candidates)
Exhibit 2: Structure of HR solutions industry
Market size of HR solutions industry in FY11
1
Permanent
recruitment
Search
Recruitment
Professional
staf?ng
General staf?ng
Human
resources
solution
industry
RPO
Employment
training
Payroll processing
and compliance
Online job portal
HR consulting
Others
14%
Permanent
recruitment
13%
Source: Ernst & Young Analysis
Temporary
recruitment
73%
Temporary
recruitment
Others
Temporary recruitment has a share of 73%
1
of the overall market, since it includes the pass-through salary costs of
employees that are leased to customer organizations.
1 Ernst & Young Analysis, refer appendix
Human resources solutions industry
7
2. Permanent recruitment
Human resources solutions industry
8
2.1 Introduction
The permanent recruitment market is estimated to be in the range of INR28–INR31 billion
1
. This segment can be
divided into executive search
#
and recruitment
#
. “Search,” being a niche category, is focused on hiring of CXO-level
positions in an organization, while recruitment is for mid- and junior-level positions.
Exhibit 3: Permanent recruitment market split in FY11 %
Source: Ernst & Young Analysis
80%
20%
Recruitment
Search
Permanent recruitment is a four-step process of sourcing — screening, selection and on-boarding of candidates —
with sourcing being one the most critical steps, since it involves short listing and attracting the right candidates from
the pool.
Sourcing of the right candidates takes place through campus recruitment programs, employment agencies, internal
referrals and job portals. However, employment agencies and referrals account for more than 65%
2
of the candidate
sourcing process. Sourcing of candidates through employment agencies is now gaining traction and currently has a
30%
2
share.
In FY11, around 360 thousand
1
candidates got placed through employment agencies across various levels.
Permanent recruitment is estimated to be an INR30 billion
1
market.
Exhibit 4: Sourcing share
Employment agency
Source: Ernst & Young Analysis
Employee referral
Campus
Others
30%
35%
15%
20%
1 Ernst & Young Analysis, working given in appendix
2 Industry estimate
Note: # Search is for positions drawing an average salary of 40 lakhs and above, recruitment is for positions drawing salary of 1.8 lakhs and above
Human resources solutions industry
9
2.2 Executive search
2.2.1 Introduction
Search market is estimated to be in the range of INR6 –INR7
billion
1
and is largely
dominated by global companies.
“It will take us at least 10 more years to become a prominent player within the executive search space.”
— Mid-sized recruitment solutions company
In the early 90s, “executive search” was less prevalent, and small placement agencies
dotted the landscape. It was all about database recruiting. The transformation was
noticed after the economy opened up with multinationals setting up shop in the
country. Business for the Indian search industry largely emanated from global MNCs
and accounted for 85–90%
3
of their revenues. The space was dominated by HR
consultants such as ABC consultants and Mafoi.
The end of the 90s and the early 2000s saw the entry of some global search
companies such as Amrop, Egon Zehnder, Korn Ferry, Transearch and Heidrick
& Struggles into India. At that time, these MNCs followed the policy of their
international CXOs heading their India operations.The mid 2000s saw the
emergencies of new industries and the need for local talent led multinationals to
demand a more scientifc approach to top-rung hiring. Large search companies
began importing their knowledge base, global best practices and proprietary tools to
their Indian subsidiaries. There were also new entrants such as Russel Reynolds and
Spencer Stuart.
The search market is estimated to be INR6–7 billion
1
,with about 6,000
1
placements
through consultants, in FY11. At the CXO, board and top levels, business is
traditionally defned as a retained search (with the client paying a fee at the beginning
of the service, and is not linked to the success of the search) and a contingency
search, with fees in the range of 25–30%
2
.
Currently, the search market, being a niche category, is dominated by large
global search companies like Egon Zehnder, Korn Ferry, Transearch, Heidrick &
Struggles, Russel Reynolds, Spencer Stuart, Amrop, etc., that have a market share
of ~40%
2
. Small companies fnd it diffcult to get search mandates as MNCs prefer
large international search organizations .Furthermore, being a relationship-driven
business, it also requires years of experience and credibility in the recruitment space
to move higher into the search category.
Key players:
Egon Zehnder,
Heidrick &
Struggles, Russel
Reynolds, Spencer
Stuart, Korn Ferry
and Transearch,
Amrop
1 Enrst & Young Analysis, refer appendix
2 Industry estimate
3 ‘The Hunted Turn Hunters’, Economic times, 6 Jan 2011
Human resources solutions industry
10
2.2.2 Growth drivers
1. Large companies diversifying into new sectors
Large Indian conglomerates are now diversifying from their core businesses and venturing into new emerging
industries. This has opened up opportunities for search companies to bring in people at the top level, who have
relevant experience in these sectors.
2. Large MNCs in automobiles, luxury goods, and agricultural and food business setting up shop in India
A large number of MNCs are trying to gain a share of the robust and growing Indian economy. The gloomy
outlook for most of developed economies has forced companies operating in these to shift their focus to
emerging economies such as India. Large automobile companies have entered the Indian market in the last
three years and are in the process of expanding their footprint to withstand competition and capture the
market. Large agri food players have entered the Indian market and are looking at expanding their presence
across different categories inorganically. Large luxury goods companies are expanding their portfolio and
presence in India to be a part of the consumption story and ride on the growth momentum. MNCs extensively
use search companies to source the right people to head their India operations, and with the infow gaining
momentum, we expect their growth to be robust.
3. Acceptance and adoption of search companies by large family owned conglomerates
In most emerging countries such as India, a signifcant component of GDP is contributed by family-run
companies. It is therefore vital to ensure that these organizations are adequately resourced, both fnancially
and with human capital. Earlier, in large family owned business conglomerates, top level hiring was primarily
through referrals, but changes are now being observed in the new generation at the helm. The family run
businesses are increasingly using the services of search frms to bring in the right candidates with the required
experience and skill sets.
2.2.3 Emerging trends
The search market is growing on the back of domestic and international companies
‘expansion and entry plans into new sectors and geographies.
• Large executive frms have started
providing CXOs for short tenures
of one to three years to stressed
investee companies, to enable them
to turn around their operations, or to
companies looking for subject matter
experts to guide them through their
roll-out plans to enter new sectors.
• Huge demand for CXOs on hire by
private equity investors for their investee
companies
• Demand from large corporate
organizations planning to enter new
sectors and conducting pilot testing to
fulfll the need for CXOs on hire
Large executive
search frms
providing CXOs
on hire for a
short term
Human resources solutions industry
11
2.3 Recruitment
2.3.1 Introduction
India’s recruitment industry has grown with the rising prominence of industries such
as IT, telecom, retail, pharma, ITES and hospitality. These industries have shown
signifcant growth on the back of strong demand from the rising Indian consumer
class and the dominance of Indian companies in the outsourcing space.
The recruitment industry has evolved on the back of the increase in the demand for
workforce on the talent acquisition and the client fronts. On the talent acquisition
front, the change has been signifcant, from a mere match-making function and
career counseling to competency-based assessment hiring. On the client side, it has
moved from a requirement- based fulfllment system to turnkey project-based hiring
to hiring for value added services (VAS).
The recruitment market is estimated at INR23–INR25 billion
1
, with about 350
thousand
1
placements through consultants in FY11.
The market for mid-level recruitment is dominated by large Indian players such as
ABC Consultants and Mafoi. Large MNCs such as Michael Page, CandyDate Jobs,
Hunt Partners, Kelly and Korn Ferry have also entered this space. The segment
also faces competition from small recruitment companies that cumulatively have a
signifcant share in the pie.
The segment is evolving from an unstructured and fragmented ecosystem to
players that are adopting new norms of productivity and cost effciency, where
“resume pushers” (who do not add value to clients) will eventually get marginalized.
At the middle management level, business is mostly contingent in nature. Clients
pay a fee of 12–16%
2
(of the annual cost-to-company salary) once candidates join
organizations.
The recruitment market for the junior level is dominated by a large number of small
companies and job portals from which companies generally source profles. Being
a volume- driven segment, the focus is more on the turnaround time than quality.
Hence, having a large data base is of prime importance. Given the volume nature of
this industry sub-segment, fees for consultants may be lower (in the range of 7-10%
2
of the annual cost-to-company salary) per recruitment.
Key players:
ABC Consultants,
Mafoi and Kelly
“Bulk recruitment is generally at a lower level as compared to the mid-level
recruitment process. At the low level, the industry continues to be volume-
driven.”
“Entry-level hiring is characterized by large volumes with a focus on quick
turnaround time rather than on quality hiring.”
Recruitment is evolving from an unstructured and fragmented ecosystem to players
adopting new norms of productivity and effciency.
1 Ernst & Young Analysis, refer appendix
2 Industry estimates
Human resources solutions industry
12
2.3.2 Growth drivers
1. Growth in key customer industries
India’s economy has been growing at an average rate ~8% on the back of growth in its key customer industries,
e.g., IT, ITES, retail, banking, health care, hospitality and others, which have been witnessing signifcant
growth.
The country’s economy has been maintaining its growth momentum on the back of a large middle class, their
increased their spending and the Government opening up sectors such as aviation , fnancial services and retail
for FDI. Companies operating in these industries and other ancillary industries are expected to recruit robustly.
India’s retail sector, after hitting a road block in 2009, is expanding again on the back of falling real estate
rentals, a burgeoning middle class and the Government’s plan to bring FDI in retail. Foreign banks that have
obtained banking licenses in FY11 are slowly increasing their workforce.
2. New emerging sectors
The economy has grown robustly in the last decade on the back of sunshine sectors that emerge every few
years. In the early 90s, it was IT, then ITeS, telecom, retail and banking, and now it is consumer goods and
health care.
“Sectors such as retail, BFSI and life sciences continue to need talent.”
HR solutions provider
“Every year, there is a new sector that does a lot of hiring, resulting in attrition across other
industries. This has a cascading effect, which benefts recruitment companies.”
Large recruitment player
Human resources solutions industry
13
2.3.3 Emerging trends
• ABC has formed a JV with Alexander
Mann Solutions.
• Elixir and People Strong are other
players that have entered the
segment.
• Other small players also offer RPO as
a service.
• Recruitment frms such as ABC
Consultants have their own online
portal, called “Head Honchos,” on
which they post jobs for senior- level
positions only.
• Michael Page has its own website, on
which it has job listings, and requires
users to register themselves to have
their own database.
• Korn Ferry
2
, through its subsidiary
Future Step, has entered the mid-
level recruitment segment.
• RPO can have a cannibalizing effect on
traditional forms of recruitment; hence,
to avoid any loss of business, most
recruitment providers have themselves
begun providing RPO as a service
offering.
• RPO as a service is an annuity and the
term of contracts vary from six months
to a year, providing a defnitive revenue
source to recruitment-focused companies,
wherein revenue is only earned on
successful referrals.
• Mid-level recruiters have ready access
to a database of relevant profles and
therefore have a quick turnaround time.
• Recruitment agencies can have higher
margins because they do not need to
share their revenues with online portals to
source profles.
• They help recruitment frms build credible
brand.
• The mid-level recruitment segment,
which provides an opportunity of
INR16.5–INR18 billion
1
, is characterized
by average margins (lower than in
executive search), but higher volumes.
Recruitment
frms providing
RPO as an
offering
Recruitment
frms with their
own online
portals
Large executive
search frms
entering
mid-level
recruitment
1 Ernst & Young Analysis, refer appendix
2 http://http://www.kornferry.com/futurestep, 10 January 2012
Recruitment frms have entered RPOs, which require large setups and online job
portals to build a brand, to increase their market share and withstand competition
from small players.
Human resources solutions industry
14
2.4 Critical success factors
Exhibit 6: Critical success factors
4.2
2.8
3.4
3.6
3.6
4.0
4.1
-
1.0
2.0
3.0
4.0
5.0
Cost of
services
delivered
Range of
services
offered
Network of
client relationships
Track record of
delivery
Quality of
sales team
Access to talent
database
Pan India
presence
Source: Industry estimate
Critical factors for the success of permanent recruitment frms
1. Network of client relationships
Having strong ties with companies and maintaining them in this crowded space is the key to obtaining business.
This industry is characterized by low entry barriers and large volumes. Therefore, companies need to build
on their existing relationships to prevent their market share from shrinking. They should also foster new
relationships to grow.
2. Track record of delivery
Quick turnaround time and quality of candidates sourced are important factors on which the track record of
delivery is measured. This track record is critical for increasing business from existing clients and also to attract
new clients.
3. Quality of sales team
Permanent recruitment is a relationship-driven business. Having a quality sales team to source mandates
from companies and to be able to successfully make a pitch to the right candidates is critical for the success of
companies.
Human resources solutions industry
15
2.5 Market opportunity
Exhibit 5: Permanent recruitment market growth
1
(FY11-FY16)*
The search and recruitment market is
expected to grow from INR29.5 billion
1
in FY11 to INR62 billion
1
in FY16 in low
case at a CAGR of 15% and INR72 billion
1
in high case at a CAGR of 20%.
35
41
47
54
62
29.5
36
43
51
61
72
0
10
20
30
40
50
60
70
80
FY11
Source: Ernst & Young Analysis
* "High case is based on the assumption of a higher economic growth and activity which is likely to result in higher rate of growth in the private
sector organized work force, as well as, higher rate of increase in the average salary across organization levels"
FY12 FY13 FY14 FY15 FY16
I
N
R
B
n
Low case High case
Growth drivers Challenges to future growth
1. Growth of the economy
India’s economy is expected to grow at a CAGR of ~8% on
the back strong domestic demand,
1. Attrition of talent
The attrition rate in search or recruitment agencies is at
40% –50%
2
, which is the highest across industries.. Being
a people-driven business, frequent changes in employees,
who end up becoming the face of companies, affect the
relationships of these companies with their large clients.
2. Focus on human resource
Challenges relating to talent that organizations
face today are manifold. There is an increasing cost
implication in fnding and hiring talent, which is exerting
considerable pressure on most businesses, especially
people-intensive ones.
Top managers in India are increasingly paying close
attention to their people interventions as well as their
HR spending. HR budgets are growing as the quality of
talent, attraction and retention concerns drive business
growth more than ever before.
2. Growth of online portals
With the growth of online portals, companies’ HR
functions now prefer to directly connect with these to
source relevant candidates’ profles from their large
databases or advertise openings on job portal websites
and obtain the profles of interested candidates. This
eliminates the need for recruitment consultants who now
face tough competition from online portals.
3. Companies considering HR agencies as their partners
Increasing complexity in the nature of business has
led companies to partner with HR agencies. They now
consider these agencies as not just mere vendors, but
partners in their long-term growth strategies.
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
Human resources solutions industry
16
3. Temporary recruitment
Human resources solutions industry
17
3.1 Introduction
The temporary recruitment market is estimated to be INR172 billion
1
. Temporary recruitment takes place when
a temporary work agency fnds and retains workers, while other companies in need of short-term workers enter a
contract with the agency to send temporary workers on assignment. Temporary employees are generally used in
industries that are cyclical in nature and require frequent adjustment of staffng levels.
The temporary recruitment market can be broadly classifed on the basis of the skill set of temporary workers.
Professional staf?ng:
A staf?ng company provides temporary skilled professionals on their payrolls to
large companies that typically operate in the IT and engineering sectors. These
are technically pro?cient workers such as web developers, planners, etc.
General Staf?ng - White collar:
A staf?ng company provides temporary skilled labor on their payrolls
to large companies operating in the ITeS, retail and telecom sectors.
These may be people with basic training for generic training, e.g.,
front -ending a retail store, BPO employees, etc.
General staff salaries typically range between ~INR 10,000
and 13, 000
2
pm.
General Staf?ng - blue collar:
A staf?ng company provides a large number of
temporary employees to factories or plants. These
typically include workers. Blue collar staff are paid
the minimum wages applicable in the state where
the company operates around ~ INR 5,000
to 8,000
2
pm.
Professional
staf?ng
General staf?ng: white collar
General staf?ng: blue collar
The temporary recruitment market is estimated at INR172 billion
1
, with professional
staffng accounting for INR53 billion
1
and general staffng INR119 billion
1
.
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
Human resources solutions industry
18
3.2 Professional staffng
3.2.1 Introduction
The professional staffng market was estimated at INR49- INR53 billion
1
in FY11, with
110 thousand
1
staffed through consultants. Professional staffng companies have
higher margins than general staffng ones, since the employees they source have higher
specialized skill sets. Their margins typically range from 30–35%
2
(of the salary paid by the
client organization to the staffng company for the resource).
Key players
Team Lease,
Manpower,
Adecco, Mafoi,
Ikya, Kelly,
Allegis, WDC and
Future Focus
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
3 IBEF,
4 EEPC
The professional staffng market is estimated at INR49–53 billion
1
with companies
having high margins of 30-35%
2
.
3.2.2 Growth drivers
1. Growth in IT and engineering industries
• Over the past few years, the Indian IT industry has been on a steady growth trajectory. It has played a
pivotal role in placing India on the world map as a major knowledge-based economy and outsourcing hub.
The Indian market for IT products and services is expected to consolidate the growth it achieved in 2010
and increase from US$19.7 billion
3
in 2010 to US$41.2 billion
3
by 2015. Indian IT companies have been
pioneers in temporary recruitment. They are now increasing their temporary staff in non-core activities and
services (where the revenue fow is not recurring) to focus more on core activities and cut down on costs to
withstand competition from other emerging markets and become more competitive.
• India’s engineering industry is primarily engaged in designing, manufacturing and operation of structures,
machines or devices. Design, although an integral part of engineering, is a onetime activity in a project
and is largely outsourced by most companies to save the fxed cost of maintaining a separate team. The
engineering sector is the largest of all industrial segments in India and accounts for about 12%
4
of its gross
domestic product (GDP). According to the Engineering Export Promotion Council (EEPC) India, the apex
body of engineering exporters, engineering exports recorded a growth of 94%
4
and 60%
4
during 1QFY11
and 2QFY11, respectively. The increasing use of temporary staff in the engineering sector is expected to
lead to growth in the demand for professional staff.
Human resources solutions industry
19
1 Industry estimate
2 http://retail.franchiseindia.com/articles/Retail-Operations/HR-and-People/Contracting-trends-419/, 18 December 2011
Company websites, merger market, http://dealcurry.com/2011041-Manpower-Buys-74-Stake-In-Kolkata-Based-WDC.htm, 29 December 2011
2. Shift to staffng model
• What has been rated as a leading HR trend worldwide, temporary staffng, is fnally catching up in India.
While industry experts estimate employee leasing at US$140 billion
2
globally, the domestic staffng industry
is yet to witness signifcant fgures. However, this scenario is set to change, given the fact that in the near
future, 2.5–3%
1
of the country’s workforce is likely to be hired on a temporary basis. The IT industry, being
a pioneer in staffng, is expected to witness a large percentage of such hiring in the next few years, with the
penetration of a temporary workforce in the segment being expected to increase from 10% to ~20%
1
.
3.2.3 Emerging key trends
The growth the IT and engineering sectors, along with increased staffng, is expected
to drive the growth of the professional staffng market in India.
General staffng companies are looking at entering the professional staffng space,
while professional staffng organizations are slowly moving up the value chain to
managed services.
• Manpower, which was focused more
on recruitment and general staffng,
has acquired WDC, which is a large
player in professional staffng.
• Ikya, which was largely focused on
recruitment and general staffng,
has acquired Magna, which is only
engaged in IT professional staffng.
• Staffng companies such as Allegis
and Adecco are moving up the value
chain and have entered managed
services. They undertake supervision
of leased employees as well as
accountability of results of the facility
or function that have been leased.
• Professional staffng companies have high
margins.
• IT companies are pioneers in engaging
temporary employees, and therefore,
companies do not need to educate them
about the benefts derived from availing
of these services.
• IT companies are gradually increasing
the share of temporary staff in their total
workforce.
• Staffng companies are moving up the
value chain and have entered managed
services to earn increased margins.
Recruitment
companies
providing RPO
as an offering
Staffng
companies
entering
managed
services
Human resources solutions industry
20
3.3 General staffng
3.3.1 Introduction
The general staf?ng industry is estimated at INR119 billion
1
with around 890 thousand
1
employees staffedthrough organized players. The industry has grown due to companies in the
ITES, retail and telecom sectors increasing the share of temporary staff in their total workforce.
General staf?ng can be broadly divided into blue collar and white collar recruitment. White collar
staf?ng is generally at the graduate level and blue collar staf?ng for laborers and workers.
The general staf?ng market is estimated at
INR88–INR92 billion
1
, with 590 thousand
1
employees staffed through consultants
in FY11.
General white collar staf?ng has low
margins of 7–10%
2
, since it requires entry
or junior-level personnel with skill sets at
the lower end of the spectrum.
This sector is dominated by some large
unorganized regional players that are able
to source local workforce for odd jobs in
the retail, telecom and hospitality sectors.
The blue collar staf?ng market is estimated
at INR25-27 billion
1
, with 300 thousand
1
staffed through consultants in FY11.
General blue collar staf?ng has high margins
of 15-18%
2
, since these employees have to
manage day-to-day operational issues,
micro-manage political parties and a large
number of workers need to be sourced in a
short span of time.
Blue collar staf?ng is largely dominated by
local unions and labor contractors.
Adecco, Manpower, Team Lease and
Futurz are the large organized players in
the segment.
?
?
?
?
?
?
?
?
?
General staf?ng – white collar General staf?ng – blue collar
Key players:
Team Lease,
Mafoi,
Manpower,
Adecco, Futurz
White collar staffng is estimated to be an INR92 billion
1
market and blue collar staffng
to be an INR27 billion
1
market in FY11.
1 Ernst & Young Analysis
2 Primary discussion
3 IBEF
3.3.2 Growth drivers
1. Growth in retail, telecom and ITES
• India has been ranked the fourth most attractive country for retail investment among 30 emerging markets.
The country’s retail market is estimated at US$435 billion
3
,out of which only 7%
3
is organized. There is
therefore signifcant potential to be explored by domestic and international players, and the industry is
slated to witness increased activity with the Government planning to introduce 51% FDI in retail. The retail
industry is one of the largest employers of temporary staff in its sales team, and given the positive future
outlook, the increased demand in temporary staff is likely to increase exponentially. India’s telecom industry
is the third largest in the world and has grown at a CAGR of 16%
3
between FY06 and FY11. The sector has
witnessed inadequate growth due to macro-economic and regulatory issues, but its long-term outlook is
Human resources solutions industry
21
largely positive. In the short term, telecom companies are tending to reduce their bench strength and are
opting for temporary staff in their sales and maintenance teams.
• India offers a unique combination of services, which has established it as the preferred offshore destination
for IT-BPO. The country’s share in BPO increased from 39-63%
1
over 2001–11. Its outsourcing industry
continues to grow, but faces the challenge of high attrition rates of 40-60%
2
, and the cost of training is as
high as INR40, 000
3
per person on an average. Therefore, companies have been saving on training costs by
successfully using the temporary staff model. Furthermore, there could be sudden spurts of demand from
clients for which temporary staffng companies may be able to provide ready solutions.
2. Shift from unorganized to large organized players
• Most large companies are gradually moving from unions to large organized players since they are expected
to address to governance issues in a scientifc and transparent manner. Furthermore, large players may be
able to provide solutions across locations where small players with their localized reach may not be of
much help.
3. Operational issues and compliance
• Managing labor, operational issues and compliance with the labor Acts often requires liaising with local
authorities. Large organizations may not necessarily have the wherewithal and relationships to manage
such issues. Large organized players would not only offer them fexibility of sourcing workforce in time,
but also ensure compliance to labor laws including gratuity, minimum wages, PF, etc. These factors have
compelled companies to opt for the temporary staffng model.
“… staffng in core industries such as IT and ITeS will continue to be on the rise as long as there are
favorable exchange rates.”
Mid-sized IT staffng company
“Going forward, a change in the labor law will see companies increasingly adopting the temporary
staff model and also witness a gradual shift from unorganized to organized temporary staff.”
Leading staffng company
Growth in key user industries such as retail, ITES and telecom, and the large
companies shifting from unorganized to organized players is expected to contribute
to the growth of general staffng.
1 Dun & Bradstreet report, http://www.cci.in/pdf/surveys_reports/it-ites-sector.pdfhttp://en.wikipedia.org/wiki/Business_process_outsourcing_in_
India,
2 Primary discussion,
3 IDFC report on education and training, January 2009.
Human resources solutions industry
22
1 http://www.adecco.co.in/en-GB/media-relations/PressReleases/Pages/AdeccotakesinorganicroutetoenterbluecollartempingspaceinIndia.aspx,
10 December 2011
2 http://www.teamlease.com/index.php?module=waves&event=view&id=17, 15 December 2011
3 http://www.indiaprwire.com/pressrelease/mining-metals/2011040682846.htm, 30 December 2011
3.3.4 Emerging key trends
• Adecco acquired Ajinkya in FY08 to
enter the blue collar staffng space.
1
• Team Lease acquired IIJT in FY10 to
enter the vocational training space.
2
• Elixir, though its partner GI, has
entered the temporary recruitment
segment.
• A large player in recruitment and
search planning is also planning
to enter the temporary
recruitment segment.
• CandyDate jobs has acquired UK
Steels, which provides temporary
staff to steel companies.
3
• Blue collar staffng have high volumes and
margins
• Training is the starting point for
developing a temporary work-force. A
company with training facilities has an
edge in terms of an employment-ready
and local temporary workforce.
• Recruitment-focused companies are
entering the temporary recruitment
segment to build a healthy top line. A
large balance sheet makes them attractive
from the perspective of investors and
banks and helps them to obtain funds
required for their future growth.
Large
international
players entering
blue collar
staffng
Staffng
companies
entering into
vocational
training
Permanent
recruitment
focused frms
entering
temporary
recruitment
General staffng companies are entering other services such as vocational training
and compliance services as an extension of their staffng business, while players in the
permanent recruitment space are entering the staffng segment to build on their top line.
Human resources solutions industry
23
3.4 Critical success factors
Exhibit 7: Critical success factors
Source: Industry estimate
4.3
2.9
3.4
4.4
3.6
4.1
4.0
-
1.0
2.0
3.0
4.0
5.0
Network of client
relationships
Range of services
offered
Cost of services
delivered
Pan India presence Access to talent
databases
Quality of sales team
Track record of delivery
Critical factors for the success of temporary recruitment companies
1. Pan-India presence
Having a pan-India presence is of prime importance for staffng companies, since clients prefer to have access
to local manpower to meet their general staffng requirements. Staffng companies have offces in industrial
belts or service industry-intensive cities to be close to their clients, to understand their needs, and in close
proximity to local workers to be able to source the right staff in time.
2. Network of client relationships
While staffng, companies outsource part of their activities to temporary staff, and therefore, work closely with
their associate leased and staffng companies. Since the contract is long term in nature, building on trust to
source work is important. Thereafter, maintaining strong ties with the company is of equal importance to retain
business.
3. Quality of sales team
Temporary recruitment is a relationship-driven business, and therefore, requires quality sales teams to source
mandates, which are of long term in nature, from companies. Moreover, having associates with the required
skill sets to perform the given tasks is critical for their success.
Human resources solutions industry
24
3.5 Market opportunity
Exhibit 8: Temporary recruitment market growth (FY11-FY16)
1
The temporary recruitment market
is expected to grow from INR167 billion
1
in FY11 to INR400 billion
1
in FY16
at a CAGR of 19%.
52
65
80
99
122
151
89
104
122
143
167
196
25
29
34
40
47
55
0
50
100
150
200
250
300
350
400
450
FY11 FY12 FY13 FY14 FY15 FY16
I
N
R
B
n
Professional staf?ng General staf?ng Blue collar staf?ng
167
199
237
282
336
400
Source: Ernst & Young Analysis
Growth factors Challenges to future growth
1. Shift to temporary staffng model
Companies across sectors suc as IT, ITES, retail, telecom,
hospitality and manufacturing are increasingly shifting to
the temporary staffng model.
1. Compliance with laws applicable to permanent staff
Staffng companies need to comply with the laws
applicable to employers of permanent staff, e.g., gratuity,
bonus, PF, etc., which makes them less competitive
as compared to unorganized players, since the cost of
services is not only high, but the in-hand component paid
to workers is less as compared to that paid to unions.
2. Temporary staffng prospers in downturn
During a downturn, companies avoid subscribing to fxed
costs and prefer opting for temporary staff to bring in
effciency in their operations. Companies in the retail and
hospitality industry generally hire temporary staff since
demand varies with economic activity, In the case of a
downturn, when demand for their products is likely to be
slow, they avoid fxed costs and prefer to replace these
with variables.
2. Contract Labor Regulation and Abolition Act
The Act applies to every establishment or contractor
in which 20
2
or more workmen are employed. Every
contractor is required to obtain a licence and undertake
or execute work in accordance with the licence issued by
the licensing offcer.
3. Working capital
Staffng companies have to pay salaries on a monthly
basis to their associates, whereas they offer a 30- to 60-
day credit period to their clients and require
working capital.
4. Local presence increases cost of operations
A local presence is one of the critical success factors for
a general staffng company. However, having multiple
offces results in increased operating expense and it may
not always be possible to pass this on to clients.
5. Attrition
Staffng companies tend to lose a signifcant part of their
lease employees to client organizations. Therefore, they
need to keep recruiting trained manpower to sustain their
business.
1 Ernst & Young Analysis, refer appendix
2 CLRB Act
Human resources solutions industry
25
4. Other segments of
the industry
Human resources solutions industry
26
Recruitment process outsourcing (RPO)
The provider acts as a company’s internal recruitment function for all or part of its recruitment activities, e.g.,
sourcing of the right candidates, screening candidates through tests and/or interviews, selection of candidates
based on screening results, and on-boarding and training.
While the global scenario in RPO is evolving rapidly, offshoring in India has been relatively slow to take off. There
are very few homebred companies that prominent in this space (Elixir Web Solutions, MaFoi Consultants and People
Strong). Several other RPOs are extensions of recruitment agencies that offer their services to prevent RPO from
having a cannibalizing effect on their recruitment business. RPO contracts generally extend for six months to a year,
unlike recruitment, which is based on successful referral, and it is an annuity. However, most recruitment companies
do not have the wherewithal to support the large-scale nature of such contracts and global clientele.
Most of the recent newsmakers in the Indian RPO space are global players that are setting up or expanding their
Indian delivery base. Some of these include Alexander Mann Solutions, which has tied up with ABC Consultants, and
Kelly Services, which is launching its RPO services in the country.
Large international players have entered the Indian market as they are of the view that small and medium-sized
companies will increase their outsourcing of non-core activities. Moreover, with the market becoming increasingly
more competitive, large players are also expected to begin outsourcing to reduce costs and increase their effciency.
“The RPO business is complex, technology-intensive, has the longest sales cycle and is like an annuity
as contracts are generally for six months to a year.”
Mid-sized company
“Outsourcing recruitment processes for a sector, e.g., BPO, which faces attrition of almost 50–60%,
can help companies in the BPO sector substantially save costs and focus on other issues such as
retention.”
Mid-sized company
RPO as a service offering has not yet evolved signifcantly in India, but consultants
expect companies to adopt the outsourcing model to withstand competition during a
downturn. Since RPO is an annuity, most large recruitment companies are expected
to offer it as a part of their portfolios.
Human resources solutions industry
27
Payroll processing and compliance
Payroll outsourcing largely involves analysis of organizational data, computation of gross salaries, TDS, allowances,
reimbursements of expenses and fling of TDS.
Organizations have the option to establish their payroll systems, but it is time-consuming and requires expertise. Increasing
workloads, strategic roles gaining in importance, low costs and the enhanced quality of outsourcing is driving organizations
to outsource their processes. According to a survey conducted by the Society for Human Resource Management, 49%
1
of
organizations are outsourcing their payroll processes due to their increasing headcount.
This space is dominated by large established players such as Hewitt and Mafoi and small players fnd it diffcult to enter the
space, since not all of them provide end-to-end solutions and last-mile compliance, which is an extremely important factor.
Furthermore, organizations are not comfortable sharing sensitive information with less established and known players.
Contracts in payroll outsourcing are generally offered for fxed fees in the range of INR100–INR150
2
per employee. Some
of the key success factors in any payroll agreement include technology, security, last mile compliance, business continuity
and web-enabled query-handling capabilities.
Payroll being a complex and noncore activity, companies generally outsource
it. The space is dominated by large MNCs due to concerns relating to sensitive
personal data sharing and the ability to provide end-to-end solutions.
Online job portals are successful for sourcing resumes at the junior level, where
quick turnaround time is of prime importance, but at the mid level, companies
prefer consultants.
Online job portals
These are job sites that list jobs according to different classifcations and post job requirements for a position to be flled.
Through a job website, an employee can locate and fll out a job application, submit resumes on a database, which is
accessed by recruitment consultants for any job opening that has not been advertized.
Naukri, Monster, Head Honchos, and Times Jobs are some of the large online job portal players. They earn revenues in the
form of fees for every successful referral. Online job portals face stiff competition from recruitment agencies and
internal referrals.
Large recruitment companies such as ABC Consultants, Michael Page and Vito have launched their own job portals to have
a presence across the value chain, increase their margins and establish their brands.
Employment training
Defned by high value corporate training to upgrade the skills of employees and make them productive from the time they
come on board.
Although corporate organizations are realizing the benefts of training, they cut down on their training spend signifcantly
during a downturn. Training contracts with the private sector are not long term in nature in nature and revenues earned are
“non-sticky.”
1 http://payroll.naukrihub.com/compensation/payroll-outsourcing/
2 Industry estimate
Human resources solutions industry
28
5. The road ahead
Human resources solutions industry
29
The HR solution industry
The HR solutions industry is highly competitive and is poised for enormous growth in the next 10 years as
companies increase their investment in their HR infrastructure.
Changing market dynamics and global competitive pressures has resulted in business becoming more complex.
This has made companies realize the importance of getting the right candidates to undertake complex tasks and
outsourcing non-core activities. Companies that were earlier reluctant to engage external vendors now consider HR
consultants their partners in achieving their organizational growth strategy.
Search
The search market, which evolved in the late 2000s, is expected to continue growing on the back of the expansion
and entry plans of large domestic and international companies into new sectors and geographies.
Recruitment
Recruitment is expected to evolve from a fragmented ecosystem to players adopting ways to work closely with
clients’ requirements, where “resume pushers” (who do not add signifcant value to their clients) will eventually get
marginalized. Recruitment companies are likely to move away from sourcing relevant candidates to accessing the
right ones by using psychometric and other robust tests to shortlist them.
Temporary staffng
Temporary staffng, one of the leading HR trends today, is expected to increase its penetration signifcantly, given
the current uncertain economic conditions. Companies and captive units are likely to increasingly depend on
agencies to lease them with the required manpower in time, to meet sudden demand from clients.
Other segments
Organizations are fast realizing the benefts of outsourcing non-core activities and focusing on enhanced value-
added activities. Outsourcing non-core activities enables HR professionals to move away from routine administration
to a more strategic role. As a result, the number of companies outsourcing HR activities is expected to continue to
rise and the scope of outsourced HR activities to expand.
The HR solutions industry is seems poised for interesting times; with 11 deals in the last three years, the overall
sector is expected to keep innovating and evolving toward exponential growth
Human resources solutions industry
30
6. Appendix
Human resources solutions industry
31
6.1 Market size estimation of permanent recruitment in FY11
=
Total organized
workforce in
Private sector share
in organised workforce
Organised private
sector workforce
FY10 (mn): 11.2
Manufacturing
sector share in
the organised
workforce
FY10: 59%
1
Organized recruitment market size (INR bn)
Organised
workforce split
Organised white
collar force in
manufacturing –A
0.15 mn
31
Total organised
white collar jobs
in a year (C=A+B)
1.18 mn
X
Addition during
FY11
0.05 mn
White collar
share in
manufacturing
FY11 (mn) : 11.7 FY11 (mn) : 33%
1
FY11: 59%
1
White collar in
manufacturing
(mn)
= X
Attrition (10%)
0.11 mn
+
=
Service sector
share in the
organised
workforce
FY10: 29%
1
Organised white
collar force in
services-B
1.03 mn
Addition during the
FY11
0.23 (mn)
White collar
share in services
FY10: 80%
2
FY11: 29%
1
FY11: 80%
2
White collar in
services (mn)
FY10: 5.3
FY11: 5.5
= X
Attrition (15%)
0.8 (mn)
+
=
+
Recruitment
consultants
share (%)
30%
2
X X X
Organised workforce
avg. salary (mn)
Organised
workforce market
size (bn)
Executive: 2%
2
Mid: 30%
2
Junior: 68%
2
Executive: 4.4
2
Mid: 1.14
2
Junior: 0.33
2
Executive: 7
Mid: 18
Junior: 6
FY10: 33%
2
FY11: 33%
2
FY10 1.08
FY11: 1.12
FY10 (mn) : 34.5
1
FY11 (mn): 36.1
1
FY10 (mn) : 33%
1
1 DGET, Employment in organised sector 2009
2 Industry estimate
Human resources solutions industry
32
6.2 Market size estimation of temporary recruitment in FY11
Organised labour
workforce (mn)
36.1
1
Estimated total organised
temp staff in FY11 (in million)
1.00
% Split of organised temp staff
Professional staff: 11%
2
General staff : 59%
2
Blue collar staff : 30%
2
Average salary (INR)
Professional staff: 39,375
2
General staff : 12,733
2
Blue collar staff : 7,169
2
X
X
Temp staff of organised
workforce ( %)
2.77%
2
=
=
172 Organized temp staf?ng market size (INR bn)
1 DGET, Employment in organised sector 2009
2 Industry estimate
Human resources solutions industry
33
Players Primary services Sales
1
(INR mn)
Mafoi Recruitment, search and staffng 8,434
Adecco Recruitment and staffng 7,050
Manpower Staffng 2,863
Kelly Services Recruitment, search and staffng 2,045
Ikya (including Magna) Recruitment, search and staffng 2,043
Global Innov Recruitment and staffng 1,861
Genius Consultants Staffng 1,412
WDC Staffng 715
Egon Zehnder Search 570
Allegis Staffng 542
ABC Consultants Recruitment and search 493
Heidrick & Struggles Search 480
Team Lease Recruitment and staffng 421
Future Focus Staffng 336
Korn Ferry Search 314
T&M Service Staffng 272
Spencer Stuart Search 266
Transearch Search 156
Amrop Intl. Search 143
Personnel search services Search 83
6.3 Key players and their revenues
MCA website, ROC fnancials
Note: 1 FY 10 Sales fgures
2 Revenue provided in ROC at net level, i.e., excluding pass through costs of salary in staffng
2
Human resources solutions industry
34
6.4 Private equity and M&A deals
Year Acquirer Target Segment Type
2011 Deberry Ventures CandyDate Jobs Recruitment and online job portal PE
2011 CandyDate Jobs UK Steels Staffng M&A
2011 ICICI Venture Team :Lease Recruitment and staffng PE
2011 PeopleStrong Summit HR India Recruitment M&A
2011 Lumis Partners PeopleStrong Recruitment and HR outsourcing PE
2011 Manpower WDC Professional staffng M&A
2010 Ikya Magna Professional staffng M&A
2010 Team Lease IIJT Job training M&A
2010 Randstad Mafoi Recruitment and staffng M&A
2009 Ikya Coachieve Recruitment M&A
2009 AAA Ventures People Strong Recruitment and HR Outsourcing PE
2009 Gaja Capital Advisors Team Lease Recruitment PE
2008 Adecco Ajinkya General staffng — blue collar M&A
2008 IEP Ikya Recruitment and staffng PE
2008 Ikya Avon Management Services Facility management M&A
2007 Hat Pin Plc Executive Access (India) Pvt. Ltd. Recruitment M&A
2005 Manpower ABC Consultants Recruitment M&A
2004 Adecco Peopleone Recruitment M&A
2004 Vedior NV Mafoi Recruitment and staffng M&A
Source: mergermarket.com, http://dealcurry.com/search.htm?search=Deberry%20Ventures, 12 December 2011, http://www.indiaprwire.com/
pressrelease/mining-metals/2011040682846.htm, 15 December 2011, http://www.peoplestrong.com/news_pr.htm#pr_acquisition_hr_frontline,
16 December 2011, http://www.peoplestrong.com/news_pr.htm#pr_private_equity_fund, http://dealcurry.com/2011041-Manpower-Buys-
74-Stake-In-Kolkata-Based-WDC.htm, 20 December 2011, http://www.teamlease.com/index.php?module=waves&event=view&id=17, 22
December 2011, http://www.dealcurry.com/20091107-Ikya-Human-Capital-Acquires-Coachieve-Solutions.htm, 26 December 2011, http://
www.peoplestrong.com/news_pr.htm#pr_a2, 29 December 2011, http://www.adecco.co.in/en-GB/media-relations/PressReleases/Pages/
AdeccotakesinorganicroutetoenterbluecollartempingspaceinIndia.aspx, 28 December 2011 http://www.dealcurry.com/20101112-IKYA-Human-Capital-
Acquires-Tech-Staffng-Firm-Magna-For-Rs-100-Cr.htm, http://www.alacrastore.com/mergers-acquisitions/ManpowerGroup-1010447, 3 January 2012,
http://www.alacrastore.com/mergers-acquisitions/People_One_Consulting-3640520, 7 January 2012
EY offce
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doc_519042904.pdf
Temporary recruitment has a share of 73%1 of the overall market, since it includes the pass-through salary costs of employees that are leased to customer organizations
Stepping into the next decade of growth
January 2012
Human resources
solutions industry
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 staffng 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 Executive Recruiters Association (ERA) is a non-proft chamber of
commerce representing Indian executive recruitment consulting frms. ERA
was formed with the objective of creating professional and ethical standards of
recruitment and establishing the recruitment process as an industry.
ERA and Ernst and Young are pleased to present to you the frst comprehensive
report on the Indian recruitment and HR services industry. I would like to express
my gratitude to Ernst and Young and all the industry people who contributed to
making this report.
Vipul Varma
Chairman
ERA
Foreword
Human resources solutions industry
1
1. Introduction ..................................................................................................3
1.1 The Human Resources (HR) solutions industry: an introduction ............................4
1.2 Market size ........................................................................................................5
1.3 Industry structure ..............................................................................................6
2. Permanent recruitment ..........................................................................................7
2.1. Introduction ......................................................................................................8
2.2. Executive search ...............................................................................................9
2.3. Recruitment ....................................................................................................11
2.4. Critical success factors ....................................................................................14
2.5. Market opportunity .........................................................................................15
3. Temporary recruitment ........................................................................................16
3.1. Introduction ....................................................................................................17
3.2. Professional staffng .......................................................................................18
3.3. General staffng ..............................................................................................20
3.4. Critical success factors ....................................................................................23
3.5. Market opportunity .........................................................................................24
4. Other segments of the industry ..........................................................................25
5. The road ahead ......................................................................................................28
6. Appendix ................................................................................................................30
C
o
n
t
e
n
t
s
Human resources solutions industry
2
Over the past few years, the Indian HR solutions industry has grown signifcantly. This is largely attributed to the change in
the mindset of large Indian companies in two ways:
1. Companies have started increasingly engaging consultants to meet their HR requirements on account of the growing
complexity of doing business and talent challenges.
2. 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 INR228 billion in FY11 and has grown at a CAGR of
21% between FY08 and FY11.
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.
Executive summary
Human resources solutions industry
3
1. Introduction
Human resources solutions industry
4
1.1 The HR solutions industry: an introduction
While there is no uniform defnition for the HR solutions industry, for the purpose of this report, we may defne it
as the rewards derived from any decision on buying services for any part of the human capital value chain. The
HR solutions industry can be broadly divided into two main functions — permanent recruitment of executives and
professionals, and temporary recruitment, specializing in professional and general staffng.
HR solutions are being increasingly viewed as a distinct industry with the role of HR consultants evolving with
changing market dynamics.
• Large Indian companies are diversifying into new sectors and prefer candidates with relevant experience.
However, since their HR function fnd it diffcult at times to source candidates from the large and geographically
dispersed talent pool, companies are increasingly looking at external help. This change in approach and mindset
has made sourcing a relatively complex activity, resulting in companies increasingly partnering with recruitment
consultants with a global footprint or access to global databases to source the right candidates.
• The service industry is a people-driven one and is clocking double-digit growth. The service industry has a large
manpower requirement, which facilitates the need for a large HR function to fulfll its growing needs. Since
recruitment is not a recurring activity and is a function of economy and a company‘s growth plans, companies
prefer to partner with consultants to source the right candidates as and when required, and have their HR
function focus on the core and strategic activities of selection, planning and retention.
• Temporary staffng is a growing human resource trend and the phenomenon is fnally catching up in India. While
industry experts estimate employee leasing to be a US$140 billion business worldwide, the domestic staffng
industry has yet to witness large fgures. The scenario is however set to change as companies are increasingly
partnering with consultants, and experts expect that in the near future, 2.5%-3%
1
of the workforce in the country
will be hired on a temporary basis.
HR consultants are now increasingly been viewed as partners in an organization’s
growth strategy rather than just being vendors.
1 Industry estimate
Human resources solutions industry
5
1.2 Market size
The overall organized HR solutions industry grew at a CAGR of 21% between FY08–FY11 from INR127 billion to
INR228 billion
1
.
127
170
202
228
0
50
100
150
200
250
FY08 FY09 FY10 FY11*
I
N
R
b
n
Exhibit 1: Human resources solutions industry revenues and growth rate
1
FY08-FY11(E)
Source: Service tax revenue numbers under the service tax head “Manpower recruitment or supply agency”
Note: As per service tax man power recruitment or supply agency includes any person engaged in providing any service,
directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person”
* FY11 numbers have been calculated by using the 8 months collection numbers upto Nov,2010 and assuming collection to
be proportionate over 12 months
“Although the industry grew at a slower pace in
the recession of 2008-09, larger players were
able to capture business from smaller and
unorganized players to show overall growth.”
–Large recruitment solutions ?rm
The HR solutions market was affected by the global economic slowdown, and slowed a year on year (y-o-y) rate of
34%
1
in FY09 to 13%
1
in FY11. The slowdown forced customer organizations to defer their hiring plans and reduce
their spend on HR.
HR solutions industry market sizing:
Inclusions Exclusions
Permanent recruitment, introduced in 1997 under manpower
recruitment service.
Players fling returns under other service heads
Other services (added in FY07) include services in relation to
pre-recruitment screening, verifcation of the credentials and
antecedents of candidates and the authenticity of documents
submitted by candidates
Players providing services to SEZs
Temporary recruitment — defnition added in FY08 Players with a turnover of INR1 million and below
The overall size of the industry may be marginally higher, given some of the exclusions in service tax defnition.
1The market size has been calculated by dividing the service tax collected during the year from the service tax records with the service tax rate
Human resources solutions industry
6
1.3 Industry structure
The HR solution industry comprises:
• Permanent recruitment
• Temporary recruitment
• Other segments
Temporary and permanent recruitment are estimated to contribute 86%
1
to the overall market size. Temporary
recruitment (staffng) 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:
• Payroll administration (producing checks, handling taxes, dealing with sick-time and vacations), employee
benefts (health, medical, life insurance, cafeteria, etc.)
• Recruitment process outsourcing,
• HR management and consulting (beneft consulting, hiring and fring, background interviews, exit interviews and
wage reviews),
• Employment training
• Online job portals (sourcing of candidates)
Exhibit 2: Structure of HR solutions industry
Market size of HR solutions industry in FY11
1
Permanent
recruitment
Search
Recruitment
Professional
staf?ng
General staf?ng
Human
resources
solution
industry
RPO
Employment
training
Payroll processing
and compliance
Online job portal
HR consulting
Others
14%
Permanent
recruitment
13%
Source: Ernst & Young Analysis
Temporary
recruitment
73%
Temporary
recruitment
Others
Temporary recruitment has a share of 73%
1
of the overall market, since it includes the pass-through salary costs of
employees that are leased to customer organizations.
1 Ernst & Young Analysis, refer appendix
Human resources solutions industry
7
2. Permanent recruitment
Human resources solutions industry
8
2.1 Introduction
The permanent recruitment market is estimated to be in the range of INR28–INR31 billion
1
. This segment can be
divided into executive search
#
and recruitment
#
. “Search,” being a niche category, is focused on hiring of CXO-level
positions in an organization, while recruitment is for mid- and junior-level positions.
Exhibit 3: Permanent recruitment market split in FY11 %
Source: Ernst & Young Analysis
80%
20%
Recruitment
Search
Permanent recruitment is a four-step process of sourcing — screening, selection and on-boarding of candidates —
with sourcing being one the most critical steps, since it involves short listing and attracting the right candidates from
the pool.
Sourcing of the right candidates takes place through campus recruitment programs, employment agencies, internal
referrals and job portals. However, employment agencies and referrals account for more than 65%
2
of the candidate
sourcing process. Sourcing of candidates through employment agencies is now gaining traction and currently has a
30%
2
share.
In FY11, around 360 thousand
1
candidates got placed through employment agencies across various levels.
Permanent recruitment is estimated to be an INR30 billion
1
market.
Exhibit 4: Sourcing share
Employment agency
Source: Ernst & Young Analysis
Employee referral
Campus
Others
30%
35%
15%
20%
1 Ernst & Young Analysis, working given in appendix
2 Industry estimate
Note: # Search is for positions drawing an average salary of 40 lakhs and above, recruitment is for positions drawing salary of 1.8 lakhs and above
Human resources solutions industry
9
2.2 Executive search
2.2.1 Introduction
Search market is estimated to be in the range of INR6 –INR7
billion
1
and is largely
dominated by global companies.
“It will take us at least 10 more years to become a prominent player within the executive search space.”
— Mid-sized recruitment solutions company
In the early 90s, “executive search” was less prevalent, and small placement agencies
dotted the landscape. It was all about database recruiting. The transformation was
noticed after the economy opened up with multinationals setting up shop in the
country. Business for the Indian search industry largely emanated from global MNCs
and accounted for 85–90%
3
of their revenues. The space was dominated by HR
consultants such as ABC consultants and Mafoi.
The end of the 90s and the early 2000s saw the entry of some global search
companies such as Amrop, Egon Zehnder, Korn Ferry, Transearch and Heidrick
& Struggles into India. At that time, these MNCs followed the policy of their
international CXOs heading their India operations.The mid 2000s saw the
emergencies of new industries and the need for local talent led multinationals to
demand a more scientifc approach to top-rung hiring. Large search companies
began importing their knowledge base, global best practices and proprietary tools to
their Indian subsidiaries. There were also new entrants such as Russel Reynolds and
Spencer Stuart.
The search market is estimated to be INR6–7 billion
1
,with about 6,000
1
placements
through consultants, in FY11. At the CXO, board and top levels, business is
traditionally defned as a retained search (with the client paying a fee at the beginning
of the service, and is not linked to the success of the search) and a contingency
search, with fees in the range of 25–30%
2
.
Currently, the search market, being a niche category, is dominated by large
global search companies like Egon Zehnder, Korn Ferry, Transearch, Heidrick &
Struggles, Russel Reynolds, Spencer Stuart, Amrop, etc., that have a market share
of ~40%
2
. Small companies fnd it diffcult to get search mandates as MNCs prefer
large international search organizations .Furthermore, being a relationship-driven
business, it also requires years of experience and credibility in the recruitment space
to move higher into the search category.
Key players:
Egon Zehnder,
Heidrick &
Struggles, Russel
Reynolds, Spencer
Stuart, Korn Ferry
and Transearch,
Amrop
1 Enrst & Young Analysis, refer appendix
2 Industry estimate
3 ‘The Hunted Turn Hunters’, Economic times, 6 Jan 2011
Human resources solutions industry
10
2.2.2 Growth drivers
1. Large companies diversifying into new sectors
Large Indian conglomerates are now diversifying from their core businesses and venturing into new emerging
industries. This has opened up opportunities for search companies to bring in people at the top level, who have
relevant experience in these sectors.
2. Large MNCs in automobiles, luxury goods, and agricultural and food business setting up shop in India
A large number of MNCs are trying to gain a share of the robust and growing Indian economy. The gloomy
outlook for most of developed economies has forced companies operating in these to shift their focus to
emerging economies such as India. Large automobile companies have entered the Indian market in the last
three years and are in the process of expanding their footprint to withstand competition and capture the
market. Large agri food players have entered the Indian market and are looking at expanding their presence
across different categories inorganically. Large luxury goods companies are expanding their portfolio and
presence in India to be a part of the consumption story and ride on the growth momentum. MNCs extensively
use search companies to source the right people to head their India operations, and with the infow gaining
momentum, we expect their growth to be robust.
3. Acceptance and adoption of search companies by large family owned conglomerates
In most emerging countries such as India, a signifcant component of GDP is contributed by family-run
companies. It is therefore vital to ensure that these organizations are adequately resourced, both fnancially
and with human capital. Earlier, in large family owned business conglomerates, top level hiring was primarily
through referrals, but changes are now being observed in the new generation at the helm. The family run
businesses are increasingly using the services of search frms to bring in the right candidates with the required
experience and skill sets.
2.2.3 Emerging trends
The search market is growing on the back of domestic and international companies
‘expansion and entry plans into new sectors and geographies.
• Large executive frms have started
providing CXOs for short tenures
of one to three years to stressed
investee companies, to enable them
to turn around their operations, or to
companies looking for subject matter
experts to guide them through their
roll-out plans to enter new sectors.
• Huge demand for CXOs on hire by
private equity investors for their investee
companies
• Demand from large corporate
organizations planning to enter new
sectors and conducting pilot testing to
fulfll the need for CXOs on hire
Large executive
search frms
providing CXOs
on hire for a
short term
Human resources solutions industry
11
2.3 Recruitment
2.3.1 Introduction
India’s recruitment industry has grown with the rising prominence of industries such
as IT, telecom, retail, pharma, ITES and hospitality. These industries have shown
signifcant growth on the back of strong demand from the rising Indian consumer
class and the dominance of Indian companies in the outsourcing space.
The recruitment industry has evolved on the back of the increase in the demand for
workforce on the talent acquisition and the client fronts. On the talent acquisition
front, the change has been signifcant, from a mere match-making function and
career counseling to competency-based assessment hiring. On the client side, it has
moved from a requirement- based fulfllment system to turnkey project-based hiring
to hiring for value added services (VAS).
The recruitment market is estimated at INR23–INR25 billion
1
, with about 350
thousand
1
placements through consultants in FY11.
The market for mid-level recruitment is dominated by large Indian players such as
ABC Consultants and Mafoi. Large MNCs such as Michael Page, CandyDate Jobs,
Hunt Partners, Kelly and Korn Ferry have also entered this space. The segment
also faces competition from small recruitment companies that cumulatively have a
signifcant share in the pie.
The segment is evolving from an unstructured and fragmented ecosystem to
players that are adopting new norms of productivity and cost effciency, where
“resume pushers” (who do not add value to clients) will eventually get marginalized.
At the middle management level, business is mostly contingent in nature. Clients
pay a fee of 12–16%
2
(of the annual cost-to-company salary) once candidates join
organizations.
The recruitment market for the junior level is dominated by a large number of small
companies and job portals from which companies generally source profles. Being
a volume- driven segment, the focus is more on the turnaround time than quality.
Hence, having a large data base is of prime importance. Given the volume nature of
this industry sub-segment, fees for consultants may be lower (in the range of 7-10%
2
of the annual cost-to-company salary) per recruitment.
Key players:
ABC Consultants,
Mafoi and Kelly
“Bulk recruitment is generally at a lower level as compared to the mid-level
recruitment process. At the low level, the industry continues to be volume-
driven.”
“Entry-level hiring is characterized by large volumes with a focus on quick
turnaround time rather than on quality hiring.”
Recruitment is evolving from an unstructured and fragmented ecosystem to players
adopting new norms of productivity and effciency.
1 Ernst & Young Analysis, refer appendix
2 Industry estimates
Human resources solutions industry
12
2.3.2 Growth drivers
1. Growth in key customer industries
India’s economy has been growing at an average rate ~8% on the back of growth in its key customer industries,
e.g., IT, ITES, retail, banking, health care, hospitality and others, which have been witnessing signifcant
growth.
The country’s economy has been maintaining its growth momentum on the back of a large middle class, their
increased their spending and the Government opening up sectors such as aviation , fnancial services and retail
for FDI. Companies operating in these industries and other ancillary industries are expected to recruit robustly.
India’s retail sector, after hitting a road block in 2009, is expanding again on the back of falling real estate
rentals, a burgeoning middle class and the Government’s plan to bring FDI in retail. Foreign banks that have
obtained banking licenses in FY11 are slowly increasing their workforce.
2. New emerging sectors
The economy has grown robustly in the last decade on the back of sunshine sectors that emerge every few
years. In the early 90s, it was IT, then ITeS, telecom, retail and banking, and now it is consumer goods and
health care.
“Sectors such as retail, BFSI and life sciences continue to need talent.”
HR solutions provider
“Every year, there is a new sector that does a lot of hiring, resulting in attrition across other
industries. This has a cascading effect, which benefts recruitment companies.”
Large recruitment player
Human resources solutions industry
13
2.3.3 Emerging trends
• ABC has formed a JV with Alexander
Mann Solutions.
• Elixir and People Strong are other
players that have entered the
segment.
• Other small players also offer RPO as
a service.
• Recruitment frms such as ABC
Consultants have their own online
portal, called “Head Honchos,” on
which they post jobs for senior- level
positions only.
• Michael Page has its own website, on
which it has job listings, and requires
users to register themselves to have
their own database.
• Korn Ferry
2
, through its subsidiary
Future Step, has entered the mid-
level recruitment segment.
• RPO can have a cannibalizing effect on
traditional forms of recruitment; hence,
to avoid any loss of business, most
recruitment providers have themselves
begun providing RPO as a service
offering.
• RPO as a service is an annuity and the
term of contracts vary from six months
to a year, providing a defnitive revenue
source to recruitment-focused companies,
wherein revenue is only earned on
successful referrals.
• Mid-level recruiters have ready access
to a database of relevant profles and
therefore have a quick turnaround time.
• Recruitment agencies can have higher
margins because they do not need to
share their revenues with online portals to
source profles.
• They help recruitment frms build credible
brand.
• The mid-level recruitment segment,
which provides an opportunity of
INR16.5–INR18 billion
1
, is characterized
by average margins (lower than in
executive search), but higher volumes.
Recruitment
frms providing
RPO as an
offering
Recruitment
frms with their
own online
portals
Large executive
search frms
entering
mid-level
recruitment
1 Ernst & Young Analysis, refer appendix
2 http://http://www.kornferry.com/futurestep, 10 January 2012
Recruitment frms have entered RPOs, which require large setups and online job
portals to build a brand, to increase their market share and withstand competition
from small players.
Human resources solutions industry
14
2.4 Critical success factors
Exhibit 6: Critical success factors
4.2
2.8
3.4
3.6
3.6
4.0
4.1
-
1.0
2.0
3.0
4.0
5.0
Cost of
services
delivered
Range of
services
offered
Network of
client relationships
Track record of
delivery
Quality of
sales team
Access to talent
database
Pan India
presence
Source: Industry estimate
Critical factors for the success of permanent recruitment frms
1. Network of client relationships
Having strong ties with companies and maintaining them in this crowded space is the key to obtaining business.
This industry is characterized by low entry barriers and large volumes. Therefore, companies need to build
on their existing relationships to prevent their market share from shrinking. They should also foster new
relationships to grow.
2. Track record of delivery
Quick turnaround time and quality of candidates sourced are important factors on which the track record of
delivery is measured. This track record is critical for increasing business from existing clients and also to attract
new clients.
3. Quality of sales team
Permanent recruitment is a relationship-driven business. Having a quality sales team to source mandates
from companies and to be able to successfully make a pitch to the right candidates is critical for the success of
companies.
Human resources solutions industry
15
2.5 Market opportunity
Exhibit 5: Permanent recruitment market growth
1
(FY11-FY16)*
The search and recruitment market is
expected to grow from INR29.5 billion
1
in FY11 to INR62 billion
1
in FY16 in low
case at a CAGR of 15% and INR72 billion
1
in high case at a CAGR of 20%.
35
41
47
54
62
29.5
36
43
51
61
72
0
10
20
30
40
50
60
70
80
FY11
Source: Ernst & Young Analysis
* "High case is based on the assumption of a higher economic growth and activity which is likely to result in higher rate of growth in the private
sector organized work force, as well as, higher rate of increase in the average salary across organization levels"
FY12 FY13 FY14 FY15 FY16
I
N
R
B
n
Low case High case
Growth drivers Challenges to future growth
1. Growth of the economy
India’s economy is expected to grow at a CAGR of ~8% on
the back strong domestic demand,
1. Attrition of talent
The attrition rate in search or recruitment agencies is at
40% –50%
2
, which is the highest across industries.. Being
a people-driven business, frequent changes in employees,
who end up becoming the face of companies, affect the
relationships of these companies with their large clients.
2. Focus on human resource
Challenges relating to talent that organizations
face today are manifold. There is an increasing cost
implication in fnding and hiring talent, which is exerting
considerable pressure on most businesses, especially
people-intensive ones.
Top managers in India are increasingly paying close
attention to their people interventions as well as their
HR spending. HR budgets are growing as the quality of
talent, attraction and retention concerns drive business
growth more than ever before.
2. Growth of online portals
With the growth of online portals, companies’ HR
functions now prefer to directly connect with these to
source relevant candidates’ profles from their large
databases or advertise openings on job portal websites
and obtain the profles of interested candidates. This
eliminates the need for recruitment consultants who now
face tough competition from online portals.
3. Companies considering HR agencies as their partners
Increasing complexity in the nature of business has
led companies to partner with HR agencies. They now
consider these agencies as not just mere vendors, but
partners in their long-term growth strategies.
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
Human resources solutions industry
16
3. Temporary recruitment
Human resources solutions industry
17
3.1 Introduction
The temporary recruitment market is estimated to be INR172 billion
1
. Temporary recruitment takes place when
a temporary work agency fnds and retains workers, while other companies in need of short-term workers enter a
contract with the agency to send temporary workers on assignment. Temporary employees are generally used in
industries that are cyclical in nature and require frequent adjustment of staffng levels.
The temporary recruitment market can be broadly classifed on the basis of the skill set of temporary workers.
Professional staf?ng:
A staf?ng company provides temporary skilled professionals on their payrolls to
large companies that typically operate in the IT and engineering sectors. These
are technically pro?cient workers such as web developers, planners, etc.
General Staf?ng - White collar:
A staf?ng company provides temporary skilled labor on their payrolls
to large companies operating in the ITeS, retail and telecom sectors.
These may be people with basic training for generic training, e.g.,
front -ending a retail store, BPO employees, etc.
General staff salaries typically range between ~INR 10,000
and 13, 000
2
pm.
General Staf?ng - blue collar:
A staf?ng company provides a large number of
temporary employees to factories or plants. These
typically include workers. Blue collar staff are paid
the minimum wages applicable in the state where
the company operates around ~ INR 5,000
to 8,000
2
pm.
Professional
staf?ng
General staf?ng: white collar
General staf?ng: blue collar
The temporary recruitment market is estimated at INR172 billion
1
, with professional
staffng accounting for INR53 billion
1
and general staffng INR119 billion
1
.
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
Human resources solutions industry
18
3.2 Professional staffng
3.2.1 Introduction
The professional staffng market was estimated at INR49- INR53 billion
1
in FY11, with
110 thousand
1
staffed through consultants. Professional staffng companies have
higher margins than general staffng ones, since the employees they source have higher
specialized skill sets. Their margins typically range from 30–35%
2
(of the salary paid by the
client organization to the staffng company for the resource).
Key players
Team Lease,
Manpower,
Adecco, Mafoi,
Ikya, Kelly,
Allegis, WDC and
Future Focus
1 Ernst & Young Analysis, refer appendix
2 Industry estimate
3 IBEF,
4 EEPC
The professional staffng market is estimated at INR49–53 billion
1
with companies
having high margins of 30-35%
2
.
3.2.2 Growth drivers
1. Growth in IT and engineering industries
• Over the past few years, the Indian IT industry has been on a steady growth trajectory. It has played a
pivotal role in placing India on the world map as a major knowledge-based economy and outsourcing hub.
The Indian market for IT products and services is expected to consolidate the growth it achieved in 2010
and increase from US$19.7 billion
3
in 2010 to US$41.2 billion
3
by 2015. Indian IT companies have been
pioneers in temporary recruitment. They are now increasing their temporary staff in non-core activities and
services (where the revenue fow is not recurring) to focus more on core activities and cut down on costs to
withstand competition from other emerging markets and become more competitive.
• India’s engineering industry is primarily engaged in designing, manufacturing and operation of structures,
machines or devices. Design, although an integral part of engineering, is a onetime activity in a project
and is largely outsourced by most companies to save the fxed cost of maintaining a separate team. The
engineering sector is the largest of all industrial segments in India and accounts for about 12%
4
of its gross
domestic product (GDP). According to the Engineering Export Promotion Council (EEPC) India, the apex
body of engineering exporters, engineering exports recorded a growth of 94%
4
and 60%
4
during 1QFY11
and 2QFY11, respectively. The increasing use of temporary staff in the engineering sector is expected to
lead to growth in the demand for professional staff.
Human resources solutions industry
19
1 Industry estimate
2 http://retail.franchiseindia.com/articles/Retail-Operations/HR-and-People/Contracting-trends-419/, 18 December 2011
Company websites, merger market, http://dealcurry.com/2011041-Manpower-Buys-74-Stake-In-Kolkata-Based-WDC.htm, 29 December 2011
2. Shift to staffng model
• What has been rated as a leading HR trend worldwide, temporary staffng, is fnally catching up in India.
While industry experts estimate employee leasing at US$140 billion
2
globally, the domestic staffng industry
is yet to witness signifcant fgures. However, this scenario is set to change, given the fact that in the near
future, 2.5–3%
1
of the country’s workforce is likely to be hired on a temporary basis. The IT industry, being
a pioneer in staffng, is expected to witness a large percentage of such hiring in the next few years, with the
penetration of a temporary workforce in the segment being expected to increase from 10% to ~20%
1
.
3.2.3 Emerging key trends
The growth the IT and engineering sectors, along with increased staffng, is expected
to drive the growth of the professional staffng market in India.
General staffng companies are looking at entering the professional staffng space,
while professional staffng organizations are slowly moving up the value chain to
managed services.
• Manpower, which was focused more
on recruitment and general staffng,
has acquired WDC, which is a large
player in professional staffng.
• Ikya, which was largely focused on
recruitment and general staffng,
has acquired Magna, which is only
engaged in IT professional staffng.
• Staffng companies such as Allegis
and Adecco are moving up the value
chain and have entered managed
services. They undertake supervision
of leased employees as well as
accountability of results of the facility
or function that have been leased.
• Professional staffng companies have high
margins.
• IT companies are pioneers in engaging
temporary employees, and therefore,
companies do not need to educate them
about the benefts derived from availing
of these services.
• IT companies are gradually increasing
the share of temporary staff in their total
workforce.
• Staffng companies are moving up the
value chain and have entered managed
services to earn increased margins.
Recruitment
companies
providing RPO
as an offering
Staffng
companies
entering
managed
services
Human resources solutions industry
20
3.3 General staffng
3.3.1 Introduction
The general staf?ng industry is estimated at INR119 billion
1
with around 890 thousand
1
employees staffedthrough organized players. The industry has grown due to companies in the
ITES, retail and telecom sectors increasing the share of temporary staff in their total workforce.
General staf?ng can be broadly divided into blue collar and white collar recruitment. White collar
staf?ng is generally at the graduate level and blue collar staf?ng for laborers and workers.
The general staf?ng market is estimated at
INR88–INR92 billion
1
, with 590 thousand
1
employees staffed through consultants
in FY11.
General white collar staf?ng has low
margins of 7–10%
2
, since it requires entry
or junior-level personnel with skill sets at
the lower end of the spectrum.
This sector is dominated by some large
unorganized regional players that are able
to source local workforce for odd jobs in
the retail, telecom and hospitality sectors.
The blue collar staf?ng market is estimated
at INR25-27 billion
1
, with 300 thousand
1
staffed through consultants in FY11.
General blue collar staf?ng has high margins
of 15-18%
2
, since these employees have to
manage day-to-day operational issues,
micro-manage political parties and a large
number of workers need to be sourced in a
short span of time.
Blue collar staf?ng is largely dominated by
local unions and labor contractors.
Adecco, Manpower, Team Lease and
Futurz are the large organized players in
the segment.
?
?
?
?
?
?
?
?
?
General staf?ng – white collar General staf?ng – blue collar
Key players:
Team Lease,
Mafoi,
Manpower,
Adecco, Futurz
White collar staffng is estimated to be an INR92 billion
1
market and blue collar staffng
to be an INR27 billion
1
market in FY11.
1 Ernst & Young Analysis
2 Primary discussion
3 IBEF
3.3.2 Growth drivers
1. Growth in retail, telecom and ITES
• India has been ranked the fourth most attractive country for retail investment among 30 emerging markets.
The country’s retail market is estimated at US$435 billion
3
,out of which only 7%
3
is organized. There is
therefore signifcant potential to be explored by domestic and international players, and the industry is
slated to witness increased activity with the Government planning to introduce 51% FDI in retail. The retail
industry is one of the largest employers of temporary staff in its sales team, and given the positive future
outlook, the increased demand in temporary staff is likely to increase exponentially. India’s telecom industry
is the third largest in the world and has grown at a CAGR of 16%
3
between FY06 and FY11. The sector has
witnessed inadequate growth due to macro-economic and regulatory issues, but its long-term outlook is
Human resources solutions industry
21
largely positive. In the short term, telecom companies are tending to reduce their bench strength and are
opting for temporary staff in their sales and maintenance teams.
• India offers a unique combination of services, which has established it as the preferred offshore destination
for IT-BPO. The country’s share in BPO increased from 39-63%
1
over 2001–11. Its outsourcing industry
continues to grow, but faces the challenge of high attrition rates of 40-60%
2
, and the cost of training is as
high as INR40, 000
3
per person on an average. Therefore, companies have been saving on training costs by
successfully using the temporary staff model. Furthermore, there could be sudden spurts of demand from
clients for which temporary staffng companies may be able to provide ready solutions.
2. Shift from unorganized to large organized players
• Most large companies are gradually moving from unions to large organized players since they are expected
to address to governance issues in a scientifc and transparent manner. Furthermore, large players may be
able to provide solutions across locations where small players with their localized reach may not be of
much help.
3. Operational issues and compliance
• Managing labor, operational issues and compliance with the labor Acts often requires liaising with local
authorities. Large organizations may not necessarily have the wherewithal and relationships to manage
such issues. Large organized players would not only offer them fexibility of sourcing workforce in time,
but also ensure compliance to labor laws including gratuity, minimum wages, PF, etc. These factors have
compelled companies to opt for the temporary staffng model.
“… staffng in core industries such as IT and ITeS will continue to be on the rise as long as there are
favorable exchange rates.”
Mid-sized IT staffng company
“Going forward, a change in the labor law will see companies increasingly adopting the temporary
staff model and also witness a gradual shift from unorganized to organized temporary staff.”
Leading staffng company
Growth in key user industries such as retail, ITES and telecom, and the large
companies shifting from unorganized to organized players is expected to contribute
to the growth of general staffng.
1 Dun & Bradstreet report, http://www.cci.in/pdf/surveys_reports/it-ites-sector.pdfhttp://en.wikipedia.org/wiki/Business_process_outsourcing_in_
India,
2 Primary discussion,
3 IDFC report on education and training, January 2009.
Human resources solutions industry
22
1 http://www.adecco.co.in/en-GB/media-relations/PressReleases/Pages/AdeccotakesinorganicroutetoenterbluecollartempingspaceinIndia.aspx,
10 December 2011
2 http://www.teamlease.com/index.php?module=waves&event=view&id=17, 15 December 2011
3 http://www.indiaprwire.com/pressrelease/mining-metals/2011040682846.htm, 30 December 2011
3.3.4 Emerging key trends
• Adecco acquired Ajinkya in FY08 to
enter the blue collar staffng space.
1
• Team Lease acquired IIJT in FY10 to
enter the vocational training space.
2
• Elixir, though its partner GI, has
entered the temporary recruitment
segment.
• A large player in recruitment and
search planning is also planning
to enter the temporary
recruitment segment.
• CandyDate jobs has acquired UK
Steels, which provides temporary
staff to steel companies.
3
• Blue collar staffng have high volumes and
margins
• Training is the starting point for
developing a temporary work-force. A
company with training facilities has an
edge in terms of an employment-ready
and local temporary workforce.
• Recruitment-focused companies are
entering the temporary recruitment
segment to build a healthy top line. A
large balance sheet makes them attractive
from the perspective of investors and
banks and helps them to obtain funds
required for their future growth.
Large
international
players entering
blue collar
staffng
Staffng
companies
entering into
vocational
training
Permanent
recruitment
focused frms
entering
temporary
recruitment
General staffng companies are entering other services such as vocational training
and compliance services as an extension of their staffng business, while players in the
permanent recruitment space are entering the staffng segment to build on their top line.
Human resources solutions industry
23
3.4 Critical success factors
Exhibit 7: Critical success factors
Source: Industry estimate
4.3
2.9
3.4
4.4
3.6
4.1
4.0
-
1.0
2.0
3.0
4.0
5.0
Network of client
relationships
Range of services
offered
Cost of services
delivered
Pan India presence Access to talent
databases
Quality of sales team
Track record of delivery
Critical factors for the success of temporary recruitment companies
1. Pan-India presence
Having a pan-India presence is of prime importance for staffng companies, since clients prefer to have access
to local manpower to meet their general staffng requirements. Staffng companies have offces in industrial
belts or service industry-intensive cities to be close to their clients, to understand their needs, and in close
proximity to local workers to be able to source the right staff in time.
2. Network of client relationships
While staffng, companies outsource part of their activities to temporary staff, and therefore, work closely with
their associate leased and staffng companies. Since the contract is long term in nature, building on trust to
source work is important. Thereafter, maintaining strong ties with the company is of equal importance to retain
business.
3. Quality of sales team
Temporary recruitment is a relationship-driven business, and therefore, requires quality sales teams to source
mandates, which are of long term in nature, from companies. Moreover, having associates with the required
skill sets to perform the given tasks is critical for their success.
Human resources solutions industry
24
3.5 Market opportunity
Exhibit 8: Temporary recruitment market growth (FY11-FY16)
1
The temporary recruitment market
is expected to grow from INR167 billion
1
in FY11 to INR400 billion
1
in FY16
at a CAGR of 19%.
52
65
80
99
122
151
89
104
122
143
167
196
25
29
34
40
47
55
0
50
100
150
200
250
300
350
400
450
FY11 FY12 FY13 FY14 FY15 FY16
I
N
R
B
n
Professional staf?ng General staf?ng Blue collar staf?ng
167
199
237
282
336
400
Source: Ernst & Young Analysis
Growth factors Challenges to future growth
1. Shift to temporary staffng model
Companies across sectors suc as IT, ITES, retail, telecom,
hospitality and manufacturing are increasingly shifting to
the temporary staffng model.
1. Compliance with laws applicable to permanent staff
Staffng companies need to comply with the laws
applicable to employers of permanent staff, e.g., gratuity,
bonus, PF, etc., which makes them less competitive
as compared to unorganized players, since the cost of
services is not only high, but the in-hand component paid
to workers is less as compared to that paid to unions.
2. Temporary staffng prospers in downturn
During a downturn, companies avoid subscribing to fxed
costs and prefer opting for temporary staff to bring in
effciency in their operations. Companies in the retail and
hospitality industry generally hire temporary staff since
demand varies with economic activity, In the case of a
downturn, when demand for their products is likely to be
slow, they avoid fxed costs and prefer to replace these
with variables.
2. Contract Labor Regulation and Abolition Act
The Act applies to every establishment or contractor
in which 20
2
or more workmen are employed. Every
contractor is required to obtain a licence and undertake
or execute work in accordance with the licence issued by
the licensing offcer.
3. Working capital
Staffng companies have to pay salaries on a monthly
basis to their associates, whereas they offer a 30- to 60-
day credit period to their clients and require
working capital.
4. Local presence increases cost of operations
A local presence is one of the critical success factors for
a general staffng company. However, having multiple
offces results in increased operating expense and it may
not always be possible to pass this on to clients.
5. Attrition
Staffng companies tend to lose a signifcant part of their
lease employees to client organizations. Therefore, they
need to keep recruiting trained manpower to sustain their
business.
1 Ernst & Young Analysis, refer appendix
2 CLRB Act
Human resources solutions industry
25
4. Other segments of
the industry
Human resources solutions industry
26
Recruitment process outsourcing (RPO)
The provider acts as a company’s internal recruitment function for all or part of its recruitment activities, e.g.,
sourcing of the right candidates, screening candidates through tests and/or interviews, selection of candidates
based on screening results, and on-boarding and training.
While the global scenario in RPO is evolving rapidly, offshoring in India has been relatively slow to take off. There
are very few homebred companies that prominent in this space (Elixir Web Solutions, MaFoi Consultants and People
Strong). Several other RPOs are extensions of recruitment agencies that offer their services to prevent RPO from
having a cannibalizing effect on their recruitment business. RPO contracts generally extend for six months to a year,
unlike recruitment, which is based on successful referral, and it is an annuity. However, most recruitment companies
do not have the wherewithal to support the large-scale nature of such contracts and global clientele.
Most of the recent newsmakers in the Indian RPO space are global players that are setting up or expanding their
Indian delivery base. Some of these include Alexander Mann Solutions, which has tied up with ABC Consultants, and
Kelly Services, which is launching its RPO services in the country.
Large international players have entered the Indian market as they are of the view that small and medium-sized
companies will increase their outsourcing of non-core activities. Moreover, with the market becoming increasingly
more competitive, large players are also expected to begin outsourcing to reduce costs and increase their effciency.
“The RPO business is complex, technology-intensive, has the longest sales cycle and is like an annuity
as contracts are generally for six months to a year.”
Mid-sized company
“Outsourcing recruitment processes for a sector, e.g., BPO, which faces attrition of almost 50–60%,
can help companies in the BPO sector substantially save costs and focus on other issues such as
retention.”
Mid-sized company
RPO as a service offering has not yet evolved signifcantly in India, but consultants
expect companies to adopt the outsourcing model to withstand competition during a
downturn. Since RPO is an annuity, most large recruitment companies are expected
to offer it as a part of their portfolios.
Human resources solutions industry
27
Payroll processing and compliance
Payroll outsourcing largely involves analysis of organizational data, computation of gross salaries, TDS, allowances,
reimbursements of expenses and fling of TDS.
Organizations have the option to establish their payroll systems, but it is time-consuming and requires expertise. Increasing
workloads, strategic roles gaining in importance, low costs and the enhanced quality of outsourcing is driving organizations
to outsource their processes. According to a survey conducted by the Society for Human Resource Management, 49%
1
of
organizations are outsourcing their payroll processes due to their increasing headcount.
This space is dominated by large established players such as Hewitt and Mafoi and small players fnd it diffcult to enter the
space, since not all of them provide end-to-end solutions and last-mile compliance, which is an extremely important factor.
Furthermore, organizations are not comfortable sharing sensitive information with less established and known players.
Contracts in payroll outsourcing are generally offered for fxed fees in the range of INR100–INR150
2
per employee. Some
of the key success factors in any payroll agreement include technology, security, last mile compliance, business continuity
and web-enabled query-handling capabilities.
Payroll being a complex and noncore activity, companies generally outsource
it. The space is dominated by large MNCs due to concerns relating to sensitive
personal data sharing and the ability to provide end-to-end solutions.
Online job portals are successful for sourcing resumes at the junior level, where
quick turnaround time is of prime importance, but at the mid level, companies
prefer consultants.
Online job portals
These are job sites that list jobs according to different classifcations and post job requirements for a position to be flled.
Through a job website, an employee can locate and fll out a job application, submit resumes on a database, which is
accessed by recruitment consultants for any job opening that has not been advertized.
Naukri, Monster, Head Honchos, and Times Jobs are some of the large online job portal players. They earn revenues in the
form of fees for every successful referral. Online job portals face stiff competition from recruitment agencies and
internal referrals.
Large recruitment companies such as ABC Consultants, Michael Page and Vito have launched their own job portals to have
a presence across the value chain, increase their margins and establish their brands.
Employment training
Defned by high value corporate training to upgrade the skills of employees and make them productive from the time they
come on board.
Although corporate organizations are realizing the benefts of training, they cut down on their training spend signifcantly
during a downturn. Training contracts with the private sector are not long term in nature in nature and revenues earned are
“non-sticky.”
1 http://payroll.naukrihub.com/compensation/payroll-outsourcing/
2 Industry estimate
Human resources solutions industry
28
5. The road ahead
Human resources solutions industry
29
The HR solution industry
The HR solutions industry is highly competitive and is poised for enormous growth in the next 10 years as
companies increase their investment in their HR infrastructure.
Changing market dynamics and global competitive pressures has resulted in business becoming more complex.
This has made companies realize the importance of getting the right candidates to undertake complex tasks and
outsourcing non-core activities. Companies that were earlier reluctant to engage external vendors now consider HR
consultants their partners in achieving their organizational growth strategy.
Search
The search market, which evolved in the late 2000s, is expected to continue growing on the back of the expansion
and entry plans of large domestic and international companies into new sectors and geographies.
Recruitment
Recruitment is expected to evolve from a fragmented ecosystem to players adopting ways to work closely with
clients’ requirements, where “resume pushers” (who do not add signifcant value to their clients) will eventually get
marginalized. Recruitment companies are likely to move away from sourcing relevant candidates to accessing the
right ones by using psychometric and other robust tests to shortlist them.
Temporary staffng
Temporary staffng, one of the leading HR trends today, is expected to increase its penetration signifcantly, given
the current uncertain economic conditions. Companies and captive units are likely to increasingly depend on
agencies to lease them with the required manpower in time, to meet sudden demand from clients.
Other segments
Organizations are fast realizing the benefts of outsourcing non-core activities and focusing on enhanced value-
added activities. Outsourcing non-core activities enables HR professionals to move away from routine administration
to a more strategic role. As a result, the number of companies outsourcing HR activities is expected to continue to
rise and the scope of outsourced HR activities to expand.
The HR solutions industry is seems poised for interesting times; with 11 deals in the last three years, the overall
sector is expected to keep innovating and evolving toward exponential growth
Human resources solutions industry
30
6. Appendix
Human resources solutions industry
31
6.1 Market size estimation of permanent recruitment in FY11
=
Total organized
workforce in
Private sector share
in organised workforce
Organised private
sector workforce
FY10 (mn): 11.2
Manufacturing
sector share in
the organised
workforce
FY10: 59%
1
Organized recruitment market size (INR bn)
Organised
workforce split
Organised white
collar force in
manufacturing –A
0.15 mn
31
Total organised
white collar jobs
in a year (C=A+B)
1.18 mn
X
Addition during
FY11
0.05 mn
White collar
share in
manufacturing
FY11 (mn) : 11.7 FY11 (mn) : 33%
1
FY11: 59%
1
White collar in
manufacturing
(mn)
= X
Attrition (10%)
0.11 mn
+
=
Service sector
share in the
organised
workforce
FY10: 29%
1
Organised white
collar force in
services-B
1.03 mn
Addition during the
FY11
0.23 (mn)
White collar
share in services
FY10: 80%
2
FY11: 29%
1
FY11: 80%
2
White collar in
services (mn)
FY10: 5.3
FY11: 5.5
= X
Attrition (15%)
0.8 (mn)
+
=
+
Recruitment
consultants
share (%)
30%
2
X X X
Organised workforce
avg. salary (mn)
Organised
workforce market
size (bn)
Executive: 2%
2
Mid: 30%
2
Junior: 68%
2
Executive: 4.4
2
Mid: 1.14
2
Junior: 0.33
2
Executive: 7
Mid: 18
Junior: 6
FY10: 33%
2
FY11: 33%
2
FY10 1.08
FY11: 1.12
FY10 (mn) : 34.5
1
FY11 (mn): 36.1
1
FY10 (mn) : 33%
1
1 DGET, Employment in organised sector 2009
2 Industry estimate
Human resources solutions industry
32
6.2 Market size estimation of temporary recruitment in FY11
Organised labour
workforce (mn)
36.1
1
Estimated total organised
temp staff in FY11 (in million)
1.00
% Split of organised temp staff
Professional staff: 11%
2
General staff : 59%
2
Blue collar staff : 30%
2
Average salary (INR)
Professional staff: 39,375
2
General staff : 12,733
2
Blue collar staff : 7,169
2
X
X
Temp staff of organised
workforce ( %)
2.77%
2
=
=
172 Organized temp staf?ng market size (INR bn)
1 DGET, Employment in organised sector 2009
2 Industry estimate
Human resources solutions industry
33
Players Primary services Sales
1
(INR mn)
Mafoi Recruitment, search and staffng 8,434
Adecco Recruitment and staffng 7,050
Manpower Staffng 2,863
Kelly Services Recruitment, search and staffng 2,045
Ikya (including Magna) Recruitment, search and staffng 2,043
Global Innov Recruitment and staffng 1,861
Genius Consultants Staffng 1,412
WDC Staffng 715
Egon Zehnder Search 570
Allegis Staffng 542
ABC Consultants Recruitment and search 493
Heidrick & Struggles Search 480
Team Lease Recruitment and staffng 421
Future Focus Staffng 336
Korn Ferry Search 314
T&M Service Staffng 272
Spencer Stuart Search 266
Transearch Search 156
Amrop Intl. Search 143
Personnel search services Search 83
6.3 Key players and their revenues
MCA website, ROC fnancials
Note: 1 FY 10 Sales fgures
2 Revenue provided in ROC at net level, i.e., excluding pass through costs of salary in staffng
2
Human resources solutions industry
34
6.4 Private equity and M&A deals
Year Acquirer Target Segment Type
2011 Deberry Ventures CandyDate Jobs Recruitment and online job portal PE
2011 CandyDate Jobs UK Steels Staffng M&A
2011 ICICI Venture Team :Lease Recruitment and staffng PE
2011 PeopleStrong Summit HR India Recruitment M&A
2011 Lumis Partners PeopleStrong Recruitment and HR outsourcing PE
2011 Manpower WDC Professional staffng M&A
2010 Ikya Magna Professional staffng M&A
2010 Team Lease IIJT Job training M&A
2010 Randstad Mafoi Recruitment and staffng M&A
2009 Ikya Coachieve Recruitment M&A
2009 AAA Ventures People Strong Recruitment and HR Outsourcing PE
2009 Gaja Capital Advisors Team Lease Recruitment PE
2008 Adecco Ajinkya General staffng — blue collar M&A
2008 IEP Ikya Recruitment and staffng PE
2008 Ikya Avon Management Services Facility management M&A
2007 Hat Pin Plc Executive Access (India) Pvt. Ltd. Recruitment M&A
2005 Manpower ABC Consultants Recruitment M&A
2004 Adecco Peopleone Recruitment M&A
2004 Vedior NV Mafoi Recruitment and staffng M&A
Source: mergermarket.com, http://dealcurry.com/search.htm?search=Deberry%20Ventures, 12 December 2011, http://www.indiaprwire.com/
pressrelease/mining-metals/2011040682846.htm, 15 December 2011, http://www.peoplestrong.com/news_pr.htm#pr_acquisition_hr_frontline,
16 December 2011, http://www.peoplestrong.com/news_pr.htm#pr_private_equity_fund, http://dealcurry.com/2011041-Manpower-Buys-
74-Stake-In-Kolkata-Based-WDC.htm, 20 December 2011, http://www.teamlease.com/index.php?module=waves&event=view&id=17, 22
December 2011, http://www.dealcurry.com/20091107-Ikya-Human-Capital-Acquires-Coachieve-Solutions.htm, 26 December 2011, http://
www.peoplestrong.com/news_pr.htm#pr_a2, 29 December 2011, http://www.adecco.co.in/en-GB/media-relations/PressReleases/Pages/
AdeccotakesinorganicroutetoenterbluecollartempingspaceinIndia.aspx, 28 December 2011 http://www.dealcurry.com/20101112-IKYA-Human-Capital-
Acquires-Tech-Staffng-Firm-Magna-For-Rs-100-Cr.htm, http://www.alacrastore.com/mergers-acquisitions/ManpowerGroup-1010447, 3 January 2012,
http://www.alacrastore.com/mergers-acquisitions/People_One_Consulting-3640520, 7 January 2012
EY offce
Ahmedabad
2
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foor, Shivalik Ishaan
Near. C.N Vidhyalaya
Ambawadi,
Ahmedabad – 380 015
Tel: + 91 79 6608 3800
Fax: + 91 79 6608 3900
Bengaluru
12
th
& 13
th
foor
“U B City” Canberra Block
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Tel: + 91 80 4027 5000
+ 91 80 6727 5000
Fax: + 91 80 2210 6000 (12th foor)
Fax: + 91 80 2224 0695 (13
th
foor)
Chandigarh
1
st
Floor
SCO: 166-167
Sector 9-C, Madhya Marg
Chandigarh – 160 009
Tel: + 91 172 671 7800
Fax: + 91 172 671 7888
Chennai
Tidel Park,
6
th
& 7
th
Floor
A Block (Module
601,701-702)
No.4, Rajiv Gandhi Salai
Taramani
Chennai – 600 113
Tel: + 91 44 6654 8100
Fax: + 91 44 2254 0120
Hyderabad
Oval Offce
18, iLabs Centre,
Hitech City, Madhapur,
Hyderabad – 500 081
Tel: + 91 40 6736 2000
Fax: + 91 40 6736 2200
Kochi
9
th
Floor “ABAD Nucleus”
NH-49, Maradu PO,
Kochi – 682 304
Tel: + 91 484 304 4000
Fax: + 91 484 270 5393
Kolkata
22, Camac Street
3
rd
Floor, Block C”
Kolkata – 700 016
Tel: + 91 33 6615 3400
Fax: + 91 33 2281 7750
Mumbai
6
th
Floor Express Towers
Nariman Point
Mumbai – 400 021
Tel: + 91 22 6192 0000
Fax: + 91 22 6192 2000
14
th
Floor, The Ruby
29 Senapati Bapat Marg
Dadar (west)
Mumbai – 400 028
Tel + 91 22 6192 0000
Fax + 91 22 6192 1000
5
th
Floor Block B-2,
Nirlon Knowledge Park
Off. Western Express Highway
Goregaon (E)
Mumbai – 400 063
Tel: + 91 22 6192 0000
Fax: + 91 22 6192 3000
NCR
Golf View Corporate
Tower – B
Near DLF Golf Course,
Sector 42
Gurgaon – 122 002
Tel: + 91 124 464 4000
Fax: + 91 124 464 4050
6
th
foor, HT House
18-20 Kasturba Gandhi Marg
New Delhi – 110 001
Tel: + 91 11 4363 3000
Fax: + 91 11 4363 3200
4
th
& 5
th
Floor, Plot No 2B,
Tower 2, Sector 126,
Noida – 201 304
Gautam Budh Nagar, U.P. India
Tel: + 91 120 671 7000
Fax: + 91 120 671 7171
Pune
C—401, 4
th
foor
Panchshil Tech Park
Yerwada (Near Don Bosco School)
Pune – 411 006
Tel: + 91 20 6603 6000
Fax: + 91 20 6601 5900
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