Slower hiring, falling commissions, force over 7,000 job search firms to shut shop
India’s economic slowdown has forced well over 7,000 selection firms to shut their businesses according to the Executive Recruiters Association (ERA), which represents the head-hunting industry.business Updated: Nov 26, 2013 11:32 IST
The ones that helped you get jobs are now looking for jobs themselves.
India’s economic slowdown, which led to a drop in hiring in the last two years, has hit recruitment firms hard. Thousands of selection firms, which recruit candidates for mid-and-junior level positions, have shut down hit by employers pruning commissions and bill payments getting delayed, said industry officials.
In fact, well over 7,000 selection firms have shut their businesses according to the Executive Recruiters Association (ERA), which represents the head-hunting industry.
"As costs are under pressure and recruitment is moving in-house, about 7,800 staffing firms have shut their businesses in the last two years," Deependra Nigam, vice chairman, ERA, told HT.
The slowdown has hit every genre of the human resource market place, including freelancers, start-ups, small and medium-sized firms and giant multinationals. "We have seen no growth in ‘generalised’ recruitment business," said Kamal Karanth, managing director of the Indian unit of US-based manpower outsourcing firm Kelly Services.
Companies are using internal talent and social media to fill "vanilla" (general skill) positions and staffing firms like TeamLease that supply temporary workers to fill specialised positions.
"Most companies have started auditing the group of placement firms they were dealing with," said V Suresh, executive vice-president at job portal Naukri.com.
In fact, head-hunters do not expect spurt in financials before the third quarter of next fiscal year (2014-15). "The third quarter of the next year may bring back the healthy growth in recruitment business," Karanth said.