Outsourced hiring is a $1 billion business 

Outsourced hiring, hiring through third party recruiters, will be an over $1 billion industry this year. And itís growing extremely rapidly.

Such hiring is only a decade old in India. It grew slowly initially, but from 2005-06, the business saw exponential growth, posting a turnover of Rs.3,922.32 crore, against Rs. 630.98 crore in the year before.

The industry this year is seen to be growing at about 40%. So by the end of the fiscal, it would go well past $ 1 billion, according to a study conducted by The Executive Recruiters Association. (ERA)

Although there is no clear break-up of which sector would contribute to what extent, it is estimated that IT will claim the largest chunk at 30% followed by telecom/infrastructure, retail/realty and manufacturing/utilities spaces each at 15%, ITES at 10% and others at 15%.

No data is easily available to determine the size of the industry. The ERA has culled out information on manpower recruitment in consultation with 93 different service tax collection points across the country, the major commission rates being Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Pune and Hyderabad. Since recruitment firms pay service tax, the annual figures are arrived at on the basis of the tax paid.

ďThe service tax commission rates figure was Rs 3, 334 crore. But for more accuracy we worked out a minimum 15% set off on account of service taxes paid separately for hiring related services like candidate references checks and market research,Ē said B R Muralidharan, executive director, ERA. The study looked at the performance of the recruitment industry for the last nine years.

B.S. Murthy, ECO Human Capital, said the figures reflect not just the extent of economic growth and the industryís yearly turnover. ď Itís about change in mind-sets about outsourcing of hiring, itís about how people moved and improved in their careers, itís about a new market has emerged, grown and matured, itís about how the industry perfected the art of maintaining a repository of over 100 different sets of skills against traditional vanilla talent. ďHe said.

Anjan Dutta, CEO, Career graph, said the entire demography of hiring and talent has changed over the last decade. ďThe last five years have witnessed a flury of de-skilling, re-skilling an skill up gradation exercises, large number of high-end, specialty jobs have happened, new industry verticals emerged, hiring numbers have moved from dozens to thousands and more, salaries have multiplied, ď he said.