Job freeze now hits headhunters | business | Hindustan Times
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Job freeze now hits headhunters

The global economic uncertainty and its impact on business sentiments have claimed a new victim — headhunters or recruitment agencies. With companies turning choosy both on hiring and spending, staffing firms are facing pricing pressures, said industry experts. Himani Chandna Gurtoo reports.

business Updated: Aug 29, 2012 21:54 IST
Himani Chandna Gurtoo

The global economic uncertainty and its impact on business sentiments have claimed a new victim — headhunters or recruitment agencies.

With companies turning choosy both on hiring and spending, staffing firms are facing pricing pressures, said industry experts.

“Costs are under pressure as the cycle to close the recruitment process has become longer,” said Manish Sabharwal, CEO, staffing firm TeamLease.

“Recruiters have become selective while closing the final inductions.”

“Our billing cycle has been stretched from 15 days to 3 months,” said Sabharwal. “It is corrupting the cash flow cycle of recruiters.” (see graphics)

Many companies including technology major Infosys has delayed bringing on board final candidates hired from campuses during August-September 2011 to as late as September 2010-July 2013. "The recruiters involved in such projects may only get their money once the batch of candidates join," said Arun Varma, executive director, industry body Executive Recruiters Association.http://www.hindustantimes.com/Images/Popup/2012/8/30-08-12-biz-02.jpg

Companies, too, are leveraging their internal manpower rather than spending too much on outsourced hiring. “Most of the companies have started auditing the group of placement firms they were dealing with,” said V Suresh, executive vice-president, Naukri.com. “Only top 20% of the firms would survive competition.”

Generally, internal recruiters deal with easy positions and source out the niche vacancies to agencies.

Industry analysts see the slowdown percolating to the “candidate level” soon.

“Due to the negative sentiments around candidates are not ready to experiment with their careers. They prefer to follow the popular saying that the known devil is better than the unknown angel,” said Uday Sodhi, CEO, HeadHonchos.com.