My colleague Promit Mukherjee is the co-author of this story which first appeared in DNA Money edition on Tuesday, January 24, 2012.
The slowdown appears to be pushing corporates to cut corners anywhich way possible.
That includes filling key positions with in-house talent rather than go for lateral hires.
The idea, experts believe, is mainly to save on costs they would otherwise incur by outsourcing the process to professional staffing and executive search firms.
The phenomenon is picking up slowly.
However, staffing and executive search firms operating in the outsourced recruitment business feel it is a matter of concern as it is eventually going to impact their business, which is already under pressure owing to a decline in the overall recruitment activity.
Dony Kuriakose, director, Edge Executive Search P, said more and more companies appear to be taking this route and that is likely to take shape of a trend as other companies are following suit.
“There were fewer companies earlier using internal human resources talent to do the sourcing and recruitment of candidates. Our interaction with a host of companies, however, indicates that the number of such companies is increasing and is likely to increase if the economic environment continues to deteriorate further,” said Kuriakose on the sidelines of the Seventh CEO Conclave organised by Executive Recruiters Association (ERA), which is a non-profit Chamber of Commerce representing more than 200 Indian executive recruitment consulting firms.
While using internal resources to hire people is being done across levels, the approach is more visible while filling entry-to-mid level positions.
“In fact, there are a few companies which have used this approach to identify and recruit top-level positions as well, though the number of such organisations is very small,” said Nikhilesh Mehta, CEO of the Pune-based Krehsst Recruitment Solutions.
While companies operating in the information technology and information technology enabled services sectors appear to be doing it more often, others in the pharma and life sciences, among others, have begun using internal HR resources to fill positions in their respective organisations.
Amit Zutshi, partner - commercial advisory services and transaction advisory services, Ernst & Young P, however, feels the outsourced recruitment fraternity should not worry much about this development.
“I think it is a very sporadic and seasonal trend adopted with a short-term view of saving on costs. There are companies who have tried doing it under stressed business environment in the past and there will be a few who will try doing it again,” he said.
Another challenge faced by the staffing and recruitment firms is the fact that companies have started asking them to scale back their fees per candidate.
The reduction, according to industry players, is 10-15% of the earlier agreed sum.
Vipul Varma of Focus Management Consultants P chipped in, saying companies indeed are bringing down fees for staffing and recruitment services. “For instance, if a company was using more than one recruitment consultant to fill the vacant positions earlier, consultants have started taking the assignments as an exclusive mandate while reducing their charges. The reduction in remuneration to a great extent gets hedged by the increase in the number of candidates being hired,” he said.
The slowdown appears to be pushing corporates to cut corners anywhich way possible.
That includes filling key positions with in-house talent rather than go for lateral hires.
The idea, experts believe, is mainly to save on costs they would otherwise incur by outsourcing the process to professional staffing and executive search firms.
The phenomenon is picking up slowly.
However, staffing and executive search firms operating in the outsourced recruitment business feel it is a matter of concern as it is eventually going to impact their business, which is already under pressure owing to a decline in the overall recruitment activity.
Dony Kuriakose, director, Edge Executive Search P, said more and more companies appear to be taking this route and that is likely to take shape of a trend as other companies are following suit.
“There were fewer companies earlier using internal human resources talent to do the sourcing and recruitment of candidates. Our interaction with a host of companies, however, indicates that the number of such companies is increasing and is likely to increase if the economic environment continues to deteriorate further,” said Kuriakose on the sidelines of the Seventh CEO Conclave organised by Executive Recruiters Association (ERA), which is a non-profit Chamber of Commerce representing more than 200 Indian executive recruitment consulting firms.
While using internal resources to hire people is being done across levels, the approach is more visible while filling entry-to-mid level positions.
“In fact, there are a few companies which have used this approach to identify and recruit top-level positions as well, though the number of such organisations is very small,” said Nikhilesh Mehta, CEO of the Pune-based Krehsst Recruitment Solutions.
While companies operating in the information technology and information technology enabled services sectors appear to be doing it more often, others in the pharma and life sciences, among others, have begun using internal HR resources to fill positions in their respective organisations.
Amit Zutshi, partner - commercial advisory services and transaction advisory services, Ernst & Young P, however, feels the outsourced recruitment fraternity should not worry much about this development.
“I think it is a very sporadic and seasonal trend adopted with a short-term view of saving on costs. There are companies who have tried doing it under stressed business environment in the past and there will be a few who will try doing it again,” he said.
Another challenge faced by the staffing and recruitment firms is the fact that companies have started asking them to scale back their fees per candidate.
The reduction, according to industry players, is 10-15% of the earlier agreed sum.
Vipul Varma of Focus Management Consultants P chipped in, saying companies indeed are bringing down fees for staffing and recruitment services. “For instance, if a company was using more than one recruitment consultant to fill the vacant positions earlier, consultants have started taking the assignments as an exclusive mandate while reducing their charges. The reduction in remuneration to a great extent gets hedged by the increase in the number of candidates being hired,” he said.
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