A firm getting 66 times what it was trying to raise from investors is big news at any time, but when it happens while the stock market has fallen 7%—since January 1—the news is stupendous. And unlike tech start-ups that are getting huge valuations, temping firm TeamLease is never going to be hugely profitable—on revenues of R1,215 crore for FY15, it made profits of R10 crore. And yet, it offers the most comprehensive solutions to India’s employment problem. While 1,200 or so employment exchanges provide around 2 lakh jobs a year, TeamLease provides this number on its own—over 8 years, it has provided employment to around 14 lakh people, making it one of India’s largest private sector employers.
TeamLease’s success lies in its early recognition of the fact that India’s organised sector employment market was getting more temporary in nature and, at the same time, those using the temporary workers didn’t want the bother associated with this—that is, firms don’t want to interview candidates to identify suitable ones and, once they leave, to quickly find replacements so that their work doesn’t suffer; or to quickly roll out distribution networks in Tier II and III towns. If firms want these solutions, what TeamLease provided workers was equally ingenuous—it took workers on its rolls and promised them a monthly salary between the time their contracts with one firm ended and before they got another one. If it were a simple matching service to end information asymmetry—that’s what Peter Diamond won the Nobel for—a Naukri or a
Monster would have sufficed. TeamLease’s USP was taking on the role of a clearing house, to set up 50-60 training centres to repair-and-prepare the work force, a vocational university to provide educational credits to apprentices … that’s more than a temporary solution to India’s permanent problems.