Shilputsi Consultants

Shilputsi in the News
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Slowdown@jobs.com - Business Standard: June 17, 2003

Recruiters in India rate conventional recruitment channels miles above e-recruitment. How are job portals trying to change that?

Gouri Shukla in Mumbai
Published : June 17, 2003

An Indian corporate client of search consultants Shilputsi was on the lookout for a new CEO with wide-ranging international marketing experience.

Shilputsi roped in a US-based job portal for the task — even though it had a branch in the US.

Says Purvi Sheth, strategy consultant at Shilputsi, “Internationally, job portals are easier recognised in various categories and levels of placement, apart from industry-specific headhunting.”

In this case, a large number of senior professionals applied directly through the portal. The consultancy’s branch also shortlisted a few candidates.

The candidate who ultimately filled the vacancy was shortlisted by both the consultancy as well as the portal.

Would Indian job portals like Naukri, JobsAhead, Jobstreet, JobsDB and others deliver such high accuracy rates? HR professionals are sceptical on this score.

Despite more than half-a-decade in business, e-recruitment (that is, recruitment through job portals) is still a supplementary database source in India.

There are around 50-odd job portals in India and they get approximately 2 per cent of the recruiting business between the top four or five portals.

“The Indian market for e-recruitment is still at least five years behind the West,” says Jeffery Taylor, founder and chairman of the global job site Monster.

This shows in the big numbers. According to industry estimates, the top four or five job portals account for only 1.5 to 2 per cent of total recruitments currently.

Internationally, online recruitment is almost neck-to-neck with other recruiting channels.

In the US, for instance, the online recruitment market already accounts for 15 per cent of total recruitment advertising; by 2007, according to the global Web-tracking agency Forrester Research, it is expected to increase to 29 per cent.

What are the roadblocks that put Indian job portals behind their international counterparts? One problem is that conventional (offline) recruitment channels still win hands down with companies.

Says Vinit Durve, senior vice president, human resources, Kodak, “We use databases from jobs portals and post our vacancies on the sites. But our experience was contrary to expectations.”

When Kodak advertised on a job portal for a sales position, the portal shortlisted 100-odd resumes for the position; only 30 candidates were found to be actually suitable.

Durve states that if the applications had been routed through consultants, the hit rate would have been 70.

A high hit rate is important for high-profile companies that tend to attract many applications. Star TV, for instance, does not refer to job portals at all.

Says Shalini Kamath, senior vice-president-HR, Star TV, “Since portals generate huge volumes, they can be used only for mass recruitments but not for specific replacements, given the limited services they offer.”

Another problem is perception. Job portals seem impersonal in a country where guestimates say at least 35 per cent of referrals come through employee referrals.

HR managers prefer hiring placement agencies, who in turn refer to the databases offered by the job portals.

In fact, close to 70 per cent of the vacancies advertised on Indian job sites are posted by placement consultants on behalf of their corporate clients.

The flip side for portals is the perceived lack of a brick-and-mortar presence.

To tackle this, the portals are trying to forge direct relationships with corporations. While JobsAhead has increased its sales force from four to 22 in four metros in three years, Naukri has expanded its sales team to 120 in 12 cities in five years.

Additionally, they have set up client retention teams across the country to offer after-sales service.

Now, armed with a substantial offline presence, the job portals are upping the ante on cost-effectiveness.

They claim that software generates the widest range and choice of candidates at a click of the mouse and is at least 50 per cent cheaper than conventional mediums.

Says Prashant Bhaskar, regional head (west) JobsAhead, “We point out the cost differentials of hiring a consultant vis-à-vis a portal to companies.”

For example, a company would have to shell out at least Rs 30 lakh to Rs 40 lakh to post a single vacancy in a newspaper and then hire a placement consultant who would charge his fees.

At JobsAhead, a basic product like a database is priced at about Rs 2 lakh.

Further, it offers a whole basket of services for Rs 5 lakh to Rs 6 lakh, the contract period for which is usually one year or more.

These services include database access, developing a microsite for the company on the portal’s homepage and unlimited advertising on the site for the contract period.

Cost-effectiveness is just the secondary benefit that job portals try to sell.

“An empty seat is huge business and opportunity loss to any business. The time advantage offered by e-recruitment is the main selling point,” emphasises Nilanjan Roy, senior manager, JobsAhead.

Normally when a company hires placement consultants to hunt for candidate profiles, the basic shortlisting of profiles takes anywhere between 10 and 15 days.

In the case of portals, technology enables filtering and final shortlisting of resumes according to specified criteria and also intimating selected candidates within a day or two.

But there are reservations. “E-recruiting has certain advantages like cost-efficiencies and high volume generation. But it cannot substitute for offline recruitment channels,” says Santrupt Misra, director, Birla Management Corporation.

Opinions like these stem largely from the all snafus involved in using infotech.

While job portals employ software to sift the relevant candidates on the basis of objective criteria, placement consultants employ people skills to identify suitable candidates.

Software suffers limitations in terms of gauging leadership, communication skills and other intangibles.

Consultants claim to judge which candidate would fit the company culture on the basis of personal interactions with the candidate.

“If job portals offer personalised services similar to placement agencies, HR professionals will consider this channel seriously,” comments Visty Banaji, executive director, corporate HR, Godrej Industries.

Some reality issues obstruct the penetration of e-recruitment. Internet usage is higher in age groups below 30. So companies use this medium only if they are looking for younger candidates.

“E-recruitment will transcend age groups only if Internet usage proliferates,” says Arun Tadanki, country manager, Monster India.

Also, job searches at the senior level tend to be infrequent. A senior manager would fear confidentiality issues and normally shy away from posting his or her resume online.

“So he is more likely to respond when he receives a cold call from a placement consultant with a lucrative offer,” says Sheth of Shilputsi.

Then, job portals merely follow economy trends rather than lead them.

For example, when the IT sector boomed in the mid-1990s, job portals tailored themselves to suit their purpose. Naukri started in 1997 with almost no insurance or IT-enabled service sector clients.

“Today we provide end-to-end recruitment solutions to a large number of clients in these industries,” says Hitesh Oberoi, director-sales and marketing, Naukri.

But HR professionals complain that the job portals are still not sensitive enough to other industries’ needs.

“In most cases, the software used by job portals is developed by IT professionals who may have little knowledge of what HR professionals really need,” says Vijay Mahajan, partner and president, Hunt-Partners, an HR consultancy firm.

To increase their saliency for non-IT companies, they are learning to serve in different plates. JobsAhead now separates its offering for non-IT companies that are not looking for IT-related skill sets.

So the database culled for non-IT companies excludes IT-related resumes for the IT companies and is 50 per cent cheaper too.

The efforts are paying off. Naukri, launched in 1997, has grown from a turnover of just Rs 92 lakh in 1999-2000 to Rs 10 crore in 2002-03 and expects to grow to Rs 20 crore by next year.

Similarly, JobsAhead, launched in 2000, has grown from Rs 4 crore in 2001-02 to Rs 10 crore in 2002-03 fiscal, and claims to have broken even.

Portals are playing safe by positioning themselves as only providers of e-recruitment products whereas consultants position themselves as recruitment specialists and service providers.

“We see ourselves as a media company that offers an easy platform to recruiters and job-seekers for exchanging information,” explains Oberoi of Naukri.

Industry insiders point out that this positioning restricts the cause of e-recruitment especially when the concept can boom in the era of slashed budgets and cost-effectiveness.

Even if companies do buy database directly from job portals, they are not swearing loyalty to any one portal.

Typically, a company buys databases from two or three portals. “They fear missing out on wider choice.

Also, even if a client buys products from two or three portals, it still works out to be cheaper for him,” explains Bhaskar of JobsAhead.

But then, each job seeker (for whom registration is free) would have registered on at least two portals.

So companies or consultants spend more time in sieving the duplicated resumes from the hired portals.

“Managing e-recruitment is a task in itself,” says Mahajan.

Normally, an HR manager or a consultant runs after reams of faxes, couriers, e-mails, referrals, all of which are stored in different formats (hard copy, soft copy, Web version) in one or many of the company’s offices. Resumes coming from portals is a headache.

“To tackle this problem, we developed a Web-based knowledge management tool called Symphony, which becomes a common record holder for all the parties — company, consultants and portals,” says Bhaskar of JobsAhead.

The company and consultants are given a password for the Web page that is powered by the portal.

“Integration from all sources prevents information loss,” adds Bhaskar. Except for these sparks, technology has become the greatest leveller.

“The portals need to specialise and offer services rather than just products,” states Mahajan of Hunt-Partners.

Monster India is trying this out.

Says Tadanki, “We now specialise as a database provider of IT and operations skills. Within that we provide candidates with super-specialised skills such as enterprise resource planning and supply chain management.”

He also adds that the future of job portals depends on the acceptance and adoption time that clients will take.

Till then, the connection with the client is still a few clicks away.