In conversation with Moorthy K. Uppaluri, the CEO of Randstad India
“Let’s assume you and I are travelling in a chopper. As we look at the landscape below, I’ll paint two pictures of the current state of the Indian workforce,” starts Moorthy K. Uppaluri, the CEO of Randstad India as we begin the interview. For the next few minutes, I’m taken through the sky highs and land lows of the industry with the grand finale still reflecting an air of positivity and promising growth. Here’s what we saw.
From the current (Indian) population of 1.2 billion people, the working-age population is around 700 million. But, the actual number of people working in this age-group is a little over 400 million. Within this, the regularised workforce is close to 40 million, or a mere four per cent (this includes the 20 million who have permanent jobs) and the third party flexible workforce is 1.6 million people or one in 1,000 people. If you compare this with the workforce penetration in developed economies, you’ll notice that there are four to five per 1,000 in these regions. Which means, we have to grow by 50 times before we say that were on par with developed economies.
Now, let’s look at the brighter side. In the past decade, we have seen an increasing number of women join the Indian workforce, specifically the top management positions. To put a value to it, this number currently stands at nine per cent. While this may seem like an insignificant statistic, the real growth is reflected in this example Moorthy shares about women graduating from business schools in India as compared to the U.S. “At Harvard, the women joining an MBA has increased from 25 per cent to 40 per cent in the last three decades, with the past decade showing a six per cent increase. As compared to that, in India, women joining top management schools have grown by 10 per cent year-on-year. This shows a positive change in the way our country is beginning to perceive gender equality at workplace,” reasons Moorthy.
Overall, he believes that the Indian workforce shows a promising growth aided by the fact that the GDP current stands at north of seven per cent. “As the economy grows, more job opportunities open up and there’s higher demand for workforce,” says Moorthy and adds, “But, there’s a catch here. Companies usually test the waters to see if the growth is constant before they hire permanent employees.” For example, if a company approaches Randstad India to recruit 100 employees for a project, it monitors their and the industry performance over a period and recruits up to 30 people on Randstad’s rolls.
In fact, a recruitment trend that is fast growing in this industry is RPO or recruitment process outsourcing, which means, a company (or client) outsources a part of or all of its recruitment activities to external service providers. This form of outsourcing can be done in four ways; recruitment on-demand, process RPO, project RPO and end-to-end RPO. “Some companies may want to hire quickly but outsource the entire process, from mapping, filtering to on-boarding to an external provider. Some others may want to outsource only a part of the recruitment process and some others may want to hire whenever there is a project. This shows that companies don’t want to recruit and wait for business to come. They hire on a need-to or demand basis only,” explains Moorthy. According to him, some of the sectors that are growing well and hiring at an aggressive pace are ecommerce, retail, pharma and healthcare, and IT & ITES to an extent.
Randstad India currently works with a diverse set of companies, which include Pidilite, Volkswagen, Tata Steel, Panasonic, Nokia and more. It has 60,000 employees on its payroll and its RPO order book has grown by three times since last year.
Shaping the industry
Among the foremost challenges that Moorthy points out is that HR doesn’t have an industry status in India, today. “Human resource is often looked at as a last resort when choosing a career path. Additionally, there is a general lack of awareness around the expertise and skills required to grow and succeed in this industry,” he cites. Seeing it from a competition perspective, he adds that while there are hundreds of registered and unregistered HR companies, there are only four to five large players that too with a single digit market share.
A second challenge he shares is in the need for Government to deregulate the industry policies. “Today, despite being an employer with over 60,000 flex workers on my payroll, if I employ a client who has over 20 workers, I have to file a labour license,” he points out and adds, “The regulations are outdated and not friction-free. This restricts the industry from growing aggressively.”
The company has taken several steps to create awareness about the industry and its practices. For example, every year, the Randstad India Award recognises best practices and best employees in the industry and the Workforce 360 conference educates CEOs and senior leaders about ongoing trends in the industry. “We’ve conducted 12 sessions in each city until now. Apart from this, we also work with industry bodies such as CII to identify key challenges the industry is faced with and channelise all efforts to drive change,” he shares.
Going forward, in Moorthy’s words, as we move towards becoming a service-driven economy, people resources will play a key role in shaping the business and industry. As a result, there is a dire need to reinforce this segment to fuel the growth of India Inc. “For us, it’s not a volume game but an impact game. In fact, in three years, we envision ourselves as a market leader in the human resource consulting and outsourcing industry,” he states, on a parting note.