Sourcing in India: Focus on HR Services
The HR industry size in India is approx. €5.7 billion and is dominated by talent acquisition in the form of recruitment, temporary staffing and executive search
In India the HR sector is very complex, fragmented and unorganized*. With globalization and increase in competition the emphasis in HR services is on five main aspects viz., grievance-handling, engagement, appraisals, retention and sourcing (GEARS).
Structure of the Industry
The HR industry size in India is approx. €5.7 billion and is dominated by talent acquisition in the form of recruitment, temporary staffing and executive search.
Indian companies, who have global operations, especially IT sector companies are now realizing that better productivity also requires the wellbeing/overall health of their employees however they do not know have the in-house solutions/resources/lack experts, and are slowly opening up to take professional consulting services.
Due to easy availability of ‘low cost labour’ in India, the Indian companies have abundant workforce and even a small size co can have >100 employees. And these numbers are humongous for big players. For ex Infosys (leader in IT space) has around 200,000 employees (March, 2017) and similar are the workforce numbers for other top IT players. However labour productivity in India is very low, and this coupled with fast rising wages/salaries have thrown a complex HR problem which creates a good opportunity for HR consulting firms to provide long lasting HR solutions.
In India, HR consulting is sunrise segment and poised for growth in near future. Earlier the consulting concept was not mature in terms of solutions/services for modern day global HR issues, however with globalization of services and incoming of global consulting firms the awareness has increased and the potential for consulting services is huge. However as clear from the above chart, the Recruitment segment still has major share of HR services accounting for 37% and the Consulting segment in India has very miniscule 2% of overall business. The main segments under HR Consulting in India are as below:
- Benchmarking services
- Metrics and measurement
- Process optimization
- Human Capital Management
- Organization Design
- Talent Management
Changing perspective: In India, till very recent times, companies used to look at “HR performance” consulting as limited to designing performance based variable salaries, regular skills trainings (related to their day to day job), Team building events and Leadership only, and it did not address the complex issues of “modern day mobile world” like Efficiency, Happiness levels, Diversity, Social cost, Wellbeing etc. (And though many companies do mention about having Diversity, Work Life balance, HSE in their HR policy but very few have systems/structures, resources, methods or tools to implement these practices) .
With globalization and growth of sectors like Retail and Hospitality, plus India’s increasing share in knowledge based sectors like IT, the companies in India are now actively looking to explore HR Performance consulting on broader base. They are willing to implements modern consulting solutions like process optimization, efficiency, diversity, innovation et al to attract, manage and improve the ever changing and complex needs of HR.