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Recruitment industry's revenues are about to fall 40-50 percent
By siliconindia
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Monday, 19 October 2009, 21:28 IST |
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Bangalore: As the slowdown hit India, recruitment firms saw their clients stop hiring or delay the process. Also, the clients have started asking for discounts. "The recruitment industry's revenues are likely to fall 40-50 percent by March 2010," said Pramod Thilakan, Associate Director at industry body, Executive Recruiters' Association (ERA).
As reported by the livemint, from 2002 to 2008, the recruitment industry galloped at 30-40 percent year-on-year as new firms entered and crowded the market. Existing players expanded in tandem with clients, fuelled by new projects and investments against the backdrop of a robust and growing economy. But, Thilakan now expects that several human resources (HR) firms, particularly smaller ones, to disappear, though he could not quantify the number, given the unorganized nature of the sector.
In July, Jaya Kumar B rolled down the shutters on the recruitment firm she set up 12 years ago. "It was definitely not easy," said Jaya, Founder and Managing Director of JK Management Consultants. "I was emotionally drained every time I closed down a branch." Until January, she employed 120 people across offices in Bangalore, Chennai, Hyderabad and New Delhi, all of whom have been sent home. She has now rented out the office building in Bangalore and is taking time out to think up her next business idea.
Also, Kannan Kasi, Founder-Director of recruitment firm Gyanagni Consulting, is lying low, waiting for a rebound. "The moment the market picks up, we will be back in the market," said Kasi. His Bangalore-based firm has seen revenues fall 50-60 percent over the past year as his clients cut costs and turned to job portals.
However, the recruitment industry now hopes for signs of a quick revival. Some of the players that have closed now "might come back when things get better," said Priya Chetty Rajagopal, Vice-President at the Indian arm of U.S.-based executive search firm Stanton Chase International. Stanton Chase's India revenue too has dipped, she said, without giving details.