BANGALORE: Outsourced hiring, or hiring through third party recruiters, will be an over $1 billion industry this year. And it's growing extremely rapidly.
Such hiring is only a decade old in India. It grew slowly initially, but in 2005-06, the business saw exponential growth, posting a turnover of Rs 3,922.32 crore, against Rs 630.98 crore in the year before. The industry this year is seen to be growing at about 40%. So by the fiscal-end, it would go well past $1 billion, according to a study by the Executive Recruiters' Association (ERA).
Although there is no clear break-up of which sector would contribute to what extent, it is estimated that IT will claim the largest chunk at 30%, followed by telecom/infrastructure, retail/realty and manufacturing/utilities spaces each at 15%, ITES at 10% and others at 15%.
No data is easily available to determine the size of the industry. The ERA has culled out information on manpower recruitment in consultation with 93 different service tax collection points across the country, the major commissionerates being Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Pune and Hyderabad. Since recruitment firms pay service tax, the annual figures are arrived at on the basis of the tax paid.
"The service tax commissionerates figure for fiscal 2005-06 was Rs 3,334 crore. For more accuracy we worked out a minimum 15% set off on account of service taxes paid separately for hiring related services like candidate reference checks and market research," said BR Muralidharan, ED, ERA. The study looked at performance of the recruitment industry for last nine years.
BS Murthy, CEO, Human Capital, said the figures reflect not just the extent of economic growth and the industry's yearly turnover.
"It's about change in mindsets about outsourcing of hiring, it's about how people moved and improved in careers, it's about how a new market has grown and matured, it's about how the industry perfected the art of maintaining a repository of over 100 different sets of skills against traditional vanilla talent," he said.
Anjan Dutta, CEO, Careergraph, said entire demography of hiring and talent has changed over the last decade. "The last five years have witnessed a flurry of de-skilling, re-skilling and skill upgradation exercises, large number of high-end, speciality jobs have happened, new industry verticals emerged, hiring numbers have moved from dozens to thousands and more, salaries have multiplied," he said.
