By Staff Writer
High attrition rates may be a blot on the great Indian BPO success story, but this problem has helped spin off a niche industry - Recruitment Process Outsourcing (RPO)- which is expected
to grow by a billion dollar this fiscal to about 3.5 billion dollars. The
industry is set for rapid growth with a large number of companies in India and
from abroad seeking to outsource their hiring-related jobs to third-party
vendors here in order to save costs as well as time.
"India has been a hub of global outsourcing activities and RPO is the sunrise
segment in this sector," hiring industry umbrella body Executive Recruiters
Association's Executive Director B R Muralidharan told. "In India, RPO is
already a 2.5 billion dollar market and is expected to grow at a rate of 30 to
40 per cent during this financial year," he said.
This new buzzword is already enjoying taste of success with a number of
corporate giants adopting the RPO model for their hiring needs inside and
outside India. The hiring needs of British mobile major Vodafone is taken care
of by RPO provider Alexander Mann Solutions, which also handled accounts of
clients like Credit Suisse, HP, Prudential and Capgemini.
Closer home in India, the BPO arm of the country's third largest IT firm Wipro
has outsourced its recruitment process to MeritTrac and aims to reduce its
hiring costs by 15-20 percent by this move. "Right hiring is the first and the
most important step toward reducing attrition. Our objective is to move to a
'hands-free' recruiting process and this is the first step towards it," Wipro
BPO CEO T K Kurien said. Kanika Vaswani, Associate Partner at city-based RPO
service provider Elixir Web Solutions said: "RPOs have been a well accepted
tool especially in the mature markets. This allows an HR manager to focus on
other core functions.
Elixir started its RPO business about six years back, catering mostly to the
information technology clients. However, the market has expanded considerably
and now its clients come from across the sectors, Vaswani said. "We are now
hiring in hundreds for many Fortune 1000 companies across sectors and 80 per
cent of all the hirings we are doing are for US-based companies and the
remaining 20 percent are for companies from Europe, Australia and Canada," she
added.
Another Indian RPO service provider Blue Square Consultancy Services' CEO Madhu
Khanna said India has managed to get a leverage in the business with its rich
outsourcing experience. "The future of RPO sector is bright with a chunk of the
US workforce retiring in the next 5 to 10 years, thus creating a severe problem
of talent acquisition. "At present, the US-based recruiting and staffing
agencies outsource their back-end operations to India on a revenue sharing
basis and will continue to do so, but a significant difference would be seen
going forward with a large number of vacancies coming on board," Khanna added.
Besides saving costs and reducing cycle time, RPOs also help companies improve
quality of hiring, the industry players believe.
While companies had reservations initially about outsourcing their recruitment process -- one of
the mostimportant human resource practice in an organisation - rising attrition
rates and expanding sphere of overall HR functionshave made. All that a firm
seeking to outsource its hiring functions needs to do is to provide an RPO with
the details of job openings and the salary range in the offering.
From here the RPO takes over, going through the process of advertising for the
position, to screening resumes, shortlisting candidates and finally going to
the employers with the right kind of professionals. The openings can range from
a fresher to a very senior employee of a company. At the same time, the shift
in the trend has been lapped up by the outsourcing service providers with an
additional area of operation leading to a growing number of niche firms focused
on HR outsourcing business.
RPOs have also come as a new lease of life for smaller companies with a workforce of around 100 to 150 people, who may not have a human resource
department at all, Vaswani said. Initially, the RPO business was limited to the
IT sector and only recently non-IT companies have begun outsourcing their HR
functions, domestic IT and outsourcing firm Birlasoft's global HR Vice
President Narendra Puppala said.
However, the industry players are not worried about the BPO sector's current
nemesis in form of high attrition rates denting the growth story. This sector
will not feel the heat of attrition so much as the BPOs as there, the people
were only able to use their hand and feet, wherein in this process they get the
satisfaction of using their minds as well, Puppala said.
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