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Hunting the headhunters - Business Standard: November 16, 2002 HR firms are booming as the job market picks up and companies
call, says
Throughout the day Gupta (the name has been changed) juggles resume screenings, assessments and interviews jobhunters. But she’s also on the receiving end of a barrage of job offers. Gupta isn’t an isolated example of how roles are being reversed in the headhunting business. Business is booming for the country’s big headhunters and, inevitably, so has the need for experienced personnel. Says Tarun Bali, chief executive officer, ABC Consultants: “By far, I think we have had our best year yet, with the IT industry and software development companies that are hiring big time.” But it isn’t only the IT boom that is fuelling business for the headhunters and HR consultants. A range of companies across the spectrum in industries like telecom, insurance and retailing are on a hiring spree. Also, they are approaching the headhunters for new and varied tasks that might have been performed in-house in earlier years. ABC Consultants, one of the oldest firms in India, is certainly reaping the benefits of the new trends in the industry. It had about 75 consultants at the beginning of the year and it has already hired 10 to 12 more. By the end of the financial year, ABC plans to add another 15 consultants on its rolls. The firm essentially does middle and senior management recruitment and has over 200 clients. Says Bali: “All headhunters are inundated with excess work. Increasingly we are doing a lot more work than just sourcing resumes.” Look at Chennai-based Ma Foi Management Consultants for an example of how life is changing for the HR firms. Ma Foi is a big player in infotech and IT-enabled services, and it has about 3,000 people on its database who are sent to clients on a temporary or project basis. In an attempt to Hoover up the best talent in infotech and other sectors from around the world, it is now opening offices in Dubai, Singapore and London. It also has offices in nine Indian cities. That’s a long way from the times when headhunters were confined only to the major metros. That isn’t all. Ma Foi, which specializes in junior management and entry-level hiring, has 250 people in India. This year, it plans to increase the number of core employees by about 60 per cent to 70 per cent and the temporary staff by about 300 per cent. Says Sunil Gandhi, principal consultant, Ma Foi Management Consultants: “A lot of companies are looking at scaling up their field force and the shift is towards taking on staff on a temporary basis like we have.” Or, look at Mumbai-based HR firm 3P Consultants. 3P is getting extra work because companies are now calling in outsiders to perform routine HR functions that would have been carried out in-house in earlier years. The 12-year-old firm, which has 35 staffers, has hired 12 additional people in the last two years and will be taking another six in the next few months. “One major difference that has occurred is that companies are outsourcing all staff roles and sticking to their core competencies. This is cost-effective for the company and an opportunity for us,” says Nirmit Parekh, managing director, 3P Consultants. Certainly, HR firms are moving forward in a host of different ways. Shilputsi, one of the veterans on the Mumbai scene, now has an office in California from where it keeps in touch with the latest trends in the IT industry. Shilputsi now offers its around 150 clients executive search, consultancy and training services. In fact, Purvi Sheth of Shilputsi says that today most clients demand both consultancy and recruitment services, whereas five years back the firm would have offered some consultancy for free. Says Sheth: “Today we have donned a different role. The process has changed and so have the expectations of what our clients demand from us.” Obviously, the value-added services have led to a diversification of interests for the HR firms as well as an increase in revenue. A year ago, with the downslide in the economy and recruitment freezes across sectors, HR firms that offered consultancy services in fields like voluntary retirement schemes reaped a windfall. Today, with companies outsourcing non-core functions, like compensation, performance appraisals, HR policies, recruitment, counselling and training, HR firms with different specialties are finding themselves in demand. Adding new expertise has helped the HR firms in more ways than one. Filling one or two jobs can be short-term assignments. But throwing in consultancy services means that the HR firms build a more long-term relationship with their clients. According to some estimates, a firm that offers both recruitment and consultancy as a package fetches close to 30 per cent margins from clients. As a result, today consultancy accounts for almost 40 per cent of most search firms. But as the HR and headhunting firms become more specialized they are developing specialized needs. Look at international search firm Korn/Ferry International. Some time ago, Ketaki Gupte, ex-media head from advertising agency Hindustan Thompson Associates, joined Korn/Ferry to oversee the media and advertising sector. Says Deepak Gupta, country head and managing director of the firm: “The business is getting extremely specialized and we have geared ourselves for this. So we’ve taken senior people with considerable industry expertise to drive our initiatives in various sectors.” Korn/Ferry currently has 21 people out of which nine form the core team of consultants. A year ago, it hired several senior staffers. In the last three months, about three to four more people have been added to the rolls and by the end of the fiscal another three to four will be brought in. Korn/Ferry has more than doubled its clients in the last two years and it now offers a variety of services, including key functions in strategic management assessment. Under this, Korn/Ferry will assess the performance, competence, skill sets, job requirements of personnel and give recommendations to the company if an employee needs to be re-aligned on the basis of the above criteria. Though this is a global service feature, the firm has started aggressively offering the service in India only last year. Of course, the hiring spree and the fast growth phenomenon has touched the larger firms more than the smaller ones. Says one consultant: “Smaller firms lose out since they don’t really offer value additions, so this trend would be specific to the larger firms for now.”
Will
the growth and optimism be sustained? Unfortunately, the industry is
completely dependent on the state of the external environment and
recruitment demand. So Tara Gupta and others like her are enjoying the
rush of being wooed for as long as it lasts |
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