Wanted! CEOs for a 20 Billion Dollar industry!
Anil Ethanur |
When you graduated and were looking to make it big in life, what kind of opportunities did you have in mind? Perhaps IT, FMCG, Telecom, Consulting, Auto, Pharma CEOs, to name a few? I bet you never thought of a career in the Recruitment/Staffing Industry? Neither had I.
Recruitment agencies have been around for well over four decades in India. But, I would say it’s only the last 15 years or so that it became broad-based when Flexi Staffing was added. This caused the transition from pure Recruitment to the broad Staffing Industry. Staffing industry has a rich 70-year history globally with a market size close to half a trillion dollars. Whereas, in India, it’s still in its nascent stage. The Indian Staffing industry started to take shape during the early 2000s. During that time, Indian entrepreneurs achieved significant scale. This brought Fortune 500 Staffing MNCs to India, who acquired many of them. Out of the Top 20 global staffing companies, only 11 have a significant presence in India. It would be difficult for the remaining to keep away from this growing market.
Some data points:
- Today, Indian Staffing Market is a healthy $6 billion market growing at 15-20%
- Its expected to touch $20 billion by 2025.
- It is estimated that there are close to 23,000 recruitment and staffing players
- This sector employs close to 200,000 people
- The Staffing Industry has 5 companies in excess of 1000 Crore revenue
- Two Indian companies have had successful IPOs in the last 2 years with one of them even crossing a billion-dollar valuation
- Over 15 companies currently have revenues over 200 crores
- Last year 5 Staffing companies had new CEOs
The journey from $6 billion to $20 billion looks ambitious, but the demographics and growth indicators make it achievable. There is one aspect though, that our industry has been grappling with: the talent for its own growth. One can’t help wondering if there are enough professionals to make this growth happen. It’s ironical that the industry that offers to bridge the talent gap for the rest of the world, suffers from deprivation.
The talent shortage is felt across the board but is acute at leadership levels. There are on-going examples of CEOs appointments from outside the industry; in a few cases, even expats have been brought in. This further drives home the point of the talent deficit. To top it all, the industry is suffering from a high staff turnover. A dipstick study of the top staffing companies reveals that attrition rates are as high as 40%. This is not because the staffing industry is not seen as an attractive career proposition!
It’s the growing pains the emerging industry is going through. The sheer number of opportunities that are being created across industries for recruiters is unmatchable. If the industry is growing at 15-20% you are looking for the significant addition of staffing consultants every year. With the growth of the many start-ups, large organisations scaling up and the average tenure of executives reducing, the demand for recruiters on the corporate side is also increasing. Recruiters are having the time of their life, and it looks like it’s going to last for another decade.
So, why should one stick to the staffing industry when marquee brands are calling you to work in their HR/TA department? In the staffing industry, you are a line function and not a cost-centre resource :). The industry has demonstrated speedy career progression; therefore, opportunities to develop one’s business and leadership skills. I can recall numerous examples of my colleagues who made successful transitions from consultants to managers to business heads quickly. Many have also moved overseas and few even became CEOs! Several of them have turned into successful entrepreneurs too. The top 15 Staffing companies in India today have been actually started by entrepreneurs not too long ago. The financial rewards are very attractive for professionals in this industry. Successful consultants make bonuses in excess of 30-50% of their annual salaries and have direct control over their earnings.
My last 17 years in this industry has been exciting, filled with great learning and have been highly rewarding. In my view, there are very few jobs that create such a positive impact on a variety of ecosystems – in this case on organisations, candidates and in turn, the society.
Another fascinating statistic of the staffing industry is that over 60% of its workforce are women. I will elaborate on this some other time. But, if the industry is able to nurture their Women managers to leadership roles then we could see the best women-leadership ratio in any industry in the days to come. Another interesting diversity strength of this industry comes from its ability to absorb diverse pools of talent. I have had colleagues who came from a wide range of functions and industries. From Sales, Finance, Journalism, Medical Reps, HR professionals, Bankers, Engineers, Teachers, Dieticians, etc. the mix has a wide range.
Take a moment to think about the opportunity:
- 20-billion-dollar Industry in the making
- 40% attrition, industry not producing enough leaders
- Many billion-dollar global MNCs yet to enter India
- No specific qualifications required. Relevant skills are unique but can be developed with experience
- There would be a few more billion-dollar companies in the making with a need of many CEOs
You can either be a CEO of some of these billion dollar companies or the next millionaire entrepreneur in the Staffing Industry.
Take your pick!