How Recruitment Industry Generates wealth?

Existence of Recruitment Industry –

Organisations delegate recruitment process to recruitment agencies so that they can focus on the main issues of the company. Recruitment agencies look into the minute details of the client’s need and use their various sources like job portals to craft their requirement. The process may seem simple on the outside, yet in-practice it is complex and requires considerable industry knowledge and emotional intelligence as a ‘strong fit’ goes beyond the requirements and requires chemistry.

Delegating the recruitment process enables the organization to leverage the time and thereby increases the productivity of the organization as the HR has other key roles to play like performance appraisal, employee engagement activity, etc. It is better to pay 10-15% to a recruitment agency and have six weeks to build a feature which would generate millions in revenue.

How Recruitment Agency Functions  –

Becoming an excellent recruiter requires a cross-section of passion between relationship-building, research, process, and persistence.  

• The recruitment companies Understand the client requirement and apply the recruiting basics  for sourcing the resumes, scrutinizing each profile , interview the candidates and also communicate key components of the work and firm involved, as well as how the particular position fits within the greater scheme of an organization.
• Schedule interviews, conduct interviews, repeating the process, qualifying or judging the interviews, new-hire paperwork, etc. The amount spent increases if the process is rescheduled.
• The best recruitment agencies have their finger on the pulse of their specialist markets, and can give the hiring team insight into what is happening. They know the available talent, where they are and how to reach out to them, salary rates, career expectations, available skill-sets and current hiring complexities.

Revenues Earned

Working for a recruitment agency is challenging. Not only in the sense that there are so many agencies out there fighting for the same business, but at the end of the day, it’s all about profit these days.

When we get a call from the hiring company, then the first thing we need to work out is, what the salary is going to be for the candidate.

An agency would then charge the hiring company a percentage of the salary. For example most agencies can charge up to 8.33 % of the salary. Therefore, if a salary was  Rs. 6,00,000/- and a company was charging up to 8.33% of the salary then an agency would be given  Rs.49,000

Growth of Recruitment Agencies

There are so many external factors influencing the growth of the staffing industry. Economics is the big variable. It is more cost effective for companies to outsource a certain percentage of their workforce,  – on-boarding costs, off-boarding costs, reducing unemployment expenses and healthcare expenses, etc. From a dollars point of view, it makes sense.

The drivers working in favor of the recruitment industry  

(a) companies saw the benefits to flexible staffing during many recessions.
(b) technology continues to mitigate the need for as many full-time employees, onsite.
(c) social networking and technology has enabled teams, alliances and work to be created and performed more expeditiously.
(d) outsourcing is not going away.
(e) the cost of real estate.

Work is changing. People want more control over their employers, duties, schedules, and lives. This is a HUGE opportunity for staffing firms to play the role of the true workforce partner, enabling organizations to find creative, on demand solutions to talent acquisition

Future of Recruitment Agencies:-

There is a  growth of India’s key industries such as IT, retail and banking, and also as well as the country’s continued focus on innovation, the Indian economy is growing at an attractive rate. As a result, the demand for talent is increasing across many sectors to deliver rapid and sustained growth.

Therefore, Indian recruiters will be facing significant pressure in attracting and retaining top talent. In fact, Aon Hewitt and People Matters found that 79% of Indian organisations project increased hiring for 2016-17

More staffing companies will operate on a global basis in 2020. Your clients are looking more for economies of scale. Mid-sized players will be forced to look into more globalization. They’re going to need companies that will support them globally.

Besides the consultant aspect, the delivery models themselves will change in 2020. Many staffing firms, with the help of the next waves of technology, will change their model from “providing people” to “getting the work done.” This may look something like the project-based assignments pioneered by IT staffing.

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