“RPO In India Is Growing At 30% Every Year”

India is mirroring the global trend in recruitment process outsourcing (RPO), which is on a steady growth trajectory. In fact, many leading organisations in India have already outsourced their entire recruitment process except for the CXO-level hiring. Francis Padamadan, country director, KellyOCG India talks to BW Businessworld’s Ayushman Baruah about the trends in RPO in India, the benefits it has offer, and how Kelly differentiates itself in the crowded market. Excerpts:

What is the RPO market size globally and in India and how is Kelly services growing along?
Globally, the RPO market is seeing exponential growth. Research by NelsonHall — the industry’s leading analyst firm — indicates that the global RPO market will hit $4.4 billion by 2017. We are seeing this reflecting in the India’s RPO growth story as well. Out of the Rs 7,000 crore permanent staffing market in India, about Rs 450 crore is expected to be spent on RPO this year.

Kelly’s RPO solutions aim to source qualified permanent and contractual employees quickly, while minimising operational complexity, cost and risk for a strategic advantage. KellyOCG is a fast growing business for Kelly and our India business has scaled up rapidly in the past year or so.

The maximum traction is from large enterprises and not from small & mid-sized companies. Why?
We are seeing greater traction for RPO in IT, financial services and pharmaceuticals verticals from large enterprises. The bulk of the RPO business comes from large greenfield projects, wherein companies do not have full-fledged HR departments in place and are looking for staffing partners, who offer end-to-end recruitment solutions. The reason is simple — RPO provides speed, scale, cost advantages for large organisations without compromising on quality of hiring.

What is the current average cost savings RPO is offering right now and how do you see this change in the coming years?
It is difficult to put a number as the savings vary on the components that are outsourced — sourcing, recruiting, and onboarding. RPOs provide more efficiency in the first two years. Organisations end up saving significant external spend on recruitment from the third year onwards.

Do you see the possibility of a trend where the entire recruitment process, including hiring of top-level talent is outsourced? What are the pros and cons?
Many leading organisations have already outsourced their entire recruitment process except for CXOs hiring. Most of the enterprises in India choose the RPO route for the speed that brings into the recruitment process, as per a report on HR Outsourcing by Everest Group. On the other hand, there is innovation happening in the recruitment industry as staffing companies are now taking the scale, quality and cost efficiency route at a higher level. The RPO segment in India is growing at 30 per cent every year and is expected to double over the next three years. So, it is definitely on the rise and finding wide acceptance particularly in the IT sector. It would be far-fetched to say that even senior level hires would be done via RPO as they have completely different methodology.

The pros of complete outsourcing are speed, scale, quality and price. The only perceived downside is that you have to make the arrangement work as you can’t have any alternative. Some organisations though feel internal recruitment teams understand business better.

How does Kelly differentiate itself from the others? Does it offer any value-added services?
KellyOCG’s advantage lies in our ability to understand local needs. Flanked by decades of global expertise as well as our long standing presence in India, we are able to provide global practices customised to local requirements.

In India, having an in-depth understanding of geography and industry vertical is key to success. KellyOCG has recruitment domain experts in IT and financial services, who have the ability to map onto core needs of the customer and cater to them accordingly, thus making us leaders in this space. Kelly also has specialised consultant teams catering to solutions and change management, focused on providing solution design and implementation for our customers.

ayushman@businessworld.in; @ayushmanb