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With the rise in the amount of jobs, the placement sector of India is booming its way to

success. The extensive range of skilled and talented professionals and with more number
of multinationals entering the market it has become easy for the recruitment firms to meet
the business requirements and candidates preferences. But, which firm should you choose
to get the right job still raises a question. Though you can conveniently find a large
number of placement consultancies existing in the market but, it takes a good eye to
differentiate between an effective and an ordinary recruitment firm. India is rising its way
to ultimate hire and brings in more revenue to the individuals and nation subsequently.

In collaboration with the corporate, top notch MNCs, private organizations and even
through the public sector these recruiters are contributing their bit to meet the Indian
manpower demand. Indian candidates are not only in high demand by the national
companies but, are also gaining recognition internationally. Thus, you might find 3 out of
10 people working abroad as Indians. Their innovative thoughts, undying talent and skill
to work harder make them the favorite among all. Besides, Indian manpower is easily
accessible and are ready to put in their 100% in their work. Their dedication has no limits
which make them so popular across the world.

The Indian recruitment firms are well versed with these qualities of Indian manpower
thus, they proficiently deliver the right candidate to the right company. No matter
whether you are thinking of outsourcing human resource services from India or simply
seeking for Indian manpower you will get it all as per your requirements in this very

One of the main reasons the raised the level of placement industry in India is this very
aspect of outsourcing the HR services. As you know India is a place where you can find
knowledgeable and professional manpower without any hassle and even the recruitment
firms are well aware of the tactics that are required to fulfill a companys requirement and
ultimately make the client satisfied. Thus, out of 10 almost 5 companies find it easier to
outsource their HR services from India and meet their organizations needs. This not only
raises the Indian manpower demand but actually gives them a gratifying and rewarding

Besides, big organizations have a widely spread human resource department and
operations thus, if you hire any reputed recruitment firm from India you can not manage
your companys HR needs but can keep it well organized.

Meeting Recruiting and Retention

Challenges in India
Meeting Recruiting and Retention Challenges in India
By Ames Gross and John Minot
May 2008
Published in SHRM Global Forum

India’s economic growth is continuing at a rapid pace, with gross domestic product
growing at 9.3% in 2007. This country of 1.1 billion people is now a major player in the
world economy and is an important destination for Western companies.
However, as more and more foreign firms enter India, its tight labor market is a major
hurdle. White-collar salaries rose by an average of 15% in 2007. HR management has
become a central part of doing business and can cause rapid business deterioration if
handled poorly.
The fast development of Indian HR makes it vital to keep up with standard practices. This
article will introduce the current state of recruiting and retention practices to help
businesses run smoothly in India.
HR Challenges
The pool of experienced professionals in India is smaller than its large population would
suggest. Out of its 1.1 billion people, about 350 million use some English, but there may
be as few as 20 million who are fully fluent. And although over 2.5 million new college
graduates are produced every year, their education is often not up to the hiring standards
of Western firms.
Due to the high demand for qualified people, Indians from top colleges or with
experience in reputable firms often have two or three job offers at any given time.
Therefore, although salaries in India are still much lower than those in the West, they are
steadily increasing. For example, a recently-graduated accountant might be offered a
starting salary of $16,000 today, up from $12,000 two years ago. For graduates of top
business schools, starting salaries have been rising by as much as 50% annually in some
In addition, attrition rates are extremely high in India. Estimates of attrition rates in the
industries most affected (business process outsourcing, IT, retail, pharmaceuticals, etc.)
range from 20% to 60%. Some individual companies have seen attrition as high as 80%.
This revolving-door hiring costs a company severely in terms of lost training as well as
reduced efficiency. According to some estimates, a resigning employee might cost the
employer twice his or her yearly salary.
In short, HR professionals must deal with two main types of problems for India: first,
attracting good employees despite fierce competition; and second, keeping these
employees satisfied so that they do not leave.
Obviously, it is important to carefully follow standard best practices in HR, including:
• Designing competitive compensation packages, with performance incentives like
bonuses and stock options as appropriate
• Implementing transparent performance review systems
• Making sure employees are well supervised and respected
• Providing good working conditions with flexible hours if necessary
Below are a number of additional strategies and trends specific to India that should also
be considered.
Broad Sourcing
Since the heaviest competition is for candidates who are already qualified for positions,
an increasingly common strategy is to broaden the pool of candidates past the ideal of
“someone already doing a similar job.” This may include hiring from outside a
company’s own industry; hiring from second-tier colleges and universities; and hiring
less skilled people with the intention of training them up.
One company doing this is Genpact, a major business process outsourcing (BPO)
provider in India originally started up by GE Capital. Genpact has set up a “pre-hire
training” institution to train Indians from second-tier and third-tier cities. These people
are often highly motivated and capable, but may not know English well or lack degrees
from good schools. Other major companies with similar programs include EXL (also a
BPO provider) and Amway.
Training employees not only expands the candidate pool, but it also helps reduce future
turnover, since it helps candidates clearly understand beforehand what their job will
Formerly, if Indian employees quit their jobs, they were not likely to be taken back later.
However, this is changing with the increased sophistication of Indian HR practices. Now,
in the tight job market, more companies are welcoming former employees back. This is
occurring at mid-level as well as upper-level ranks. Not only do former employees often
have the skills companies are looking for, but they can also be re-integrated into the
workplace quickly.
Examples of Western firms actively reaching out to former employees in India include
ADP, a global financial services company, and Cairn Energy, a British oil exploration
company. Many companies, including Cairn, are creating online “alumni portals” to keep
in touch with their former employees. Some companies are also expanding their referral
commission systems (where employees get payments for referring new hires) so that
former employees as well as current employees can receive referral commissions.
Employee Satisfaction
Many workplaces in India offer various leisure activities on-site. These can help retain
employees by letting them relax and reduce stress. The methods are not unfamiliar to
Western HR professionals. Infosys, an IT/BPO firm with about 90,000 employees
worldwide, hosts music and sports competitions, clubs, and an art gallery at its India
campus. It also has other more conventional perks like gyms and food courts. These types
of benefits are especially suited to the IT industry, where employees may have significant
down-time between intensive periods of work.
In India, it is relatively common to hold activities which both employees and their
families can attend. This helps integrate employee more fully into the workplace
However, leisure activities and perks can only go so far. If you oversell a workplace as
“fun,” candidates may view their actual work unfavorably. Candidates should have an
understanding of their work as valuable to the company and to themselves personally.
Career Development
Surveys show that salary is one of the top considerations of Indians in choosing jobs, but
it is only a minor factor in employee satisfaction. If you want employees to stay at their
jobs, one of the best motivators is career development.
Therefore, the best employers in India carefully track career development. They hold
regular one-on-one meetings on the subject, set and track goals, and provide training.
Large companies tend to have in-house training facilities, and smaller companies are also
increasingly providing funding for external training. Training might be for specific
technical skills, or for more general skills like learning a new language. This makes
employees more productive in the long run and also gives them the signal that the
company sees them as a worthy investment.
One career-development incentive used by larger companies in India is internal company
transfers. The Tata Group, a major conglomerate with business including cars, finance,
steel, and BPO, tracks its talent and facilitates employee transfers across all companies in
the group. This motivates employees by showing that they will not be trapped in one
industry if they want to expand their marketability as an employee. With foreign
companies, the possibility of transferring to an overseas job is also alluring.
Companies with these internal transfer programs often specify that employees cannot
transfer until they have been employed for a set period of time, such as 18 months.
HR Operations
HR departments of major companies in India are being forced to expand. According to
some estimates, HR staff is increasing from 1 in 500 total employees to 1 in 100. This is
partly because the ratio of applications to new hires is very high, giving recruiters a heavy
workload. In addition, keeping employees satisfied with their jobs is increasingly time-
consuming. Insufficient HR capability may be a strong liability for Western companies
operating in India.
In India, many HR functions can be outsourced as an alternative to increasing staff.
Nokia India, for example, uses vendors for most HR functions except for functions
integral to the company, like mentoring and culture building. India’s strength in business
process outsourcing means most of these services can be found locally. Background
screening, for example, was almost nonexistent in India in 1995; today, there are dozens
of Indian companies specializing in it.
Recruiting and retention in India today leaves little margin for error. It is a challenge to
make sure that new employees are right for the job, and to make the best employees stay.
However, by being proactive and thorough in addressing these challenges, it is possible
for foreign companies to keep good people and achieve their business goals.

Labour Force In India
India's labour force exhibits extremes ranging from large numbers of illiterate
workers unaccustomed to machinery or routine, to a sizable pool of highly
educated scientists, technicians, and engineers, capable of working anywhere in
the world. A substantial number of skilled people have left India to work
abroad; the country has suffered a brain drain since independence.
Nonetheless, many remain in India working alongside a trained industrial and
commercial work force. Administrative skills, particularly necessary in large
projects or programs, are in short supply, however. In the mid-1990s, salaries
for top administrators and technical staff rose sharply, partly in response to the
arrival of foreign companies in India
Labour Relations
The Trade Unions Act of 1926 provided recognition and protection for a nascent
Indian labour union movement. The number of unions grew considerably after
independence, but most unions are small and usually active in only one firm.
Union membership is concentrated in the organized sector, and in the early
1990s total membership was about 9 million. Many unions are affiliated with
regional or national federations, the most important of which are the Indian
National Trade Union Congress, the All India Trade Union Congress, the Centre
of Indian Trade Unions, the Hind Mazdoor Sabha, and the Bharatiya Mazdoor
Sangh. Politicians have often been union leaders, and some analysts believe
that strikes and other labour protests are called primarily to further the
interests of political parties rather than to promote the interests of the work
The government recorded 1,825 strikes and lockouts in 1990. As a result, 24.1
million workdays were lost, 10.6 million to strikes and 13.5 million to lockouts.
More than 1.3 million workers were involved in these labour disputes. The
number and seriousness of strikes and lockouts have varied from year to year.
However, the figures for 1990 and preliminary data from 1991 indicate declines
from levels reached in the 1980s, when in some years as many as 35 million
workdays were lost because of labour disputes.
The isolated, insecure, and exploited labourers in rural areas and in the urban
unorganized sectors present a stark contrast to the position of unionized
workers in many modern enterprises. In the early 1990s, there were estimates
that between 10 per cent and 20 per cent of agricultural workers were bonded
labourers. The International Commission of Jurists, studying India's bonded
labour, defines such a person as one who works for a creditor or someone in the
creditor's family against nominal wages in cash or kind until the creditor, who
keeps the books and sets the prices, declares the loan repaid, often with
usurious rates of interest. The system sometimes extends to a debtor's wife and
children, who are employed in appalling working conditions and exposed to
sexual abuse. The constitution, as interpreted by India's Supreme Court, and a
1976 law prohibit bonded labour. Implementation of the prohibition, however,
has been inconsistent in many rural areas