The Promising Outlook of the Indian HR industry

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It is a time of transformation for the HR industry in India. Disruptive developments, both from the
demand side as well as the supply side, are changing the shape and nature of services. Some of the
demand side factors that have (and will continue to) shape the developments of the HR industry
include the macro-economic environment, HR’s increased need for strategic partnership with the
business, more influx of global players and best practices, and the increasing awareness and
adoption of technology.
From the supply side as well, many changes have altered the course of the HR industry in India,
starting from growth of niche services, such as assessment and temporary staffing, to innovation in
terms of how services are packaged and delivered. The industry will continue to grow and technology
will drive the next level of evolution of HR services in India.
THE TURNING POINT
By Vikram Choudhury

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By Vikram Choudhury

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By Vikram Choudhury

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“While the present scenario looks positive, future
innovations in HR Technology will depends on the
investments that the industry is willing to make.”
Industry Speaks…
“Economic development and new technological advances
have impacted the HR services industry and at the heart of it,
how employers relate to their employees and how employers
relate to candidates for an appointment.”
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The consumption of HR services depends on how well HR professionals, both from
the buyer and the supply side, build a strong business case for the CEO.
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THE OPPURTUNITIES:
Broad spectrum of available services
Richer high value-added services expected in the future
Large opportunity in L&D technology to scale-up skilling programs
THE THREATS:
Inability to drive the business case
Lack of substantial successful implementation case examples
Low maturity of the market

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“The need of the hour is for service providers to offer
integrated services, such as recruiting that includes
employer branding, social media advertising, and
management of the recruitment process with delivery that
is focused on outcomes.”
“The HR community has to
learn to talk business to the
CEO”
“HR departments play a role of being a contact point, a
change agent, project manager and facilitator in people
management.”
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The recruitment market , globally and in India, is dominated by staffing that
comprises around 75 percent of the market.
THE OPPURTUNITIES:
Sizeable growth opportunities in staffing
Specialized talent search in STEM, pharma, and IT
Recruitment process outsourcing (RPO)
Managed solutions
THE THREATS:
Longer recruiting cycles
Stagnant growth outlook
Question on ability to scale
Availability of talent pool
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“As companies increase their
requirements and scope of
activities, they will look for
partners that have the scale,
structure and aggressive
outlook.”
“Recruiting industry is almost
like a barometer of the way
the economy functions. When
the economy is doing well,
companies are willing to
invest in capital and people;
they want to hire.”
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With the Government policy fuelling changes, the L&D industry in India has a positive
growth outlook in the coming months.
THE OPPURTUNITIES:
Government and academic partnerships
Asia-pacific market
New technology space, particularly in social media and consumer technologies
THE THREATS:
Low maturity of the buyer
Longer sales cycles
Lack of qualified trainers
Moving buyers from commodity to value
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“In the management space there is high competition
given the number of niche players. And as you move
towards the frontline, there is less competition because
there are very few players that can deliver large scale
training programs.”
“Today , there is a clear understanding
that leadership development is process
and not an event.”
“The mass approach to training has made it necessary
to adopt technology to impart learning, along with
enabling consistency in training quality standards.”
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Deeper understanding of the market and ability to offer value-added services will be
the key for outsourcing and niche players.
THE OPPURTUNITIES:
Players in India will continue to leverage the labor arbitrage advantage
Emergence of large homegrown players
Large opportunities in the SME sector
THE THREATS:
Sales conversations are typically difficult in less mature markets, such as India
Talent and skills shortage
Increase in competition
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“India is an unmatched ground to see the impact of
HR interventions and experiments unfold within
compressed time-frames as growth in this market is
exponential and telescopic.”
“Leveraging technology including social media etc. for
HR products and services is certainly an area of
opportunity.”
“Complete the loop of assessments
with learning solutions and talent
management.”
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Economic conditions and cost pressures have shrunk consulting budgets in
organizations, thereby making it difficult for small players to sustain.
THE OPPURTUNITIES:
PSUs and homegrown companies
SMEs and Indian multinationals
Consolidation in the market
Analytics and people-based services
THE THREATS:
Relative low maturity compared to other markets
Dearth of quality talent
Demand side cost pressures
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“The Indian large conglomerates are doing wonders
where there is a huge focus on leadership
development with an increased in-road of
assessments leading to successors.”
“Leadership development services are seeing increased
acceptance because companies are clear that the cost
of replacement of talent is much higher than the cost of
retention.”
“Companies have realized that they
need more capability in internal
resources on implementation.”
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While the outlook for 2013 for HR technology will not be of exponential growth, the
space will see companies trying to establish presence and build a base for the future.
THE OPPURTUNITIES:
Sectoral opportunities in retail, hospitality, retail, and PSUs
Emergence of disruptive technologies, such as gamification
Larger HR technology budgets from the demand side
Cloud-based and analytics services
THE THREATS:
Low maturity on the demand side
Market skepticism from failed implementations
Lack of use-case scenarios to drive business expansion
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“We see a trend from services to products. When you
make this shift, you go from commodity to value. This
is happening in every space of HR today and most
rapidly in the learning space”
“There are many more players looking at this space,
from the global ERP giants, that are investing is
building capabilities in this specialized space either
organically or inorganically, to the local product
companies.”
“Product players are expanding
portfolios to enable companies manage
coverage and outreach with
employees.”
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+91 (124) 4148102
info@peoplematters.in
www.peoplematters.in
January 2013
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