Corporate India is hoping that the New Year will usher in a better economic environment, but manpower search firms see no sign of growth in business prospects in 2009. On the contrary, revenues are expected to dip by almost 45% in the first quarter ending March 2009, say industry players. Search firms are also witnessing shrinkage of fees by about 15-20%, as competition gets intense.
?Revenues from recruitment business will drop by about 40-45% in January to March this year. We are also witnessing a dip in fees as well. For example, at the executive level, the charges used to be about 25-33% of the CTC (cost to company) of the potential candidate. It has now fallen to about 15-16% of CTC,? revealed
Tapash Sengupta, MD, CHR Global HR Consultancy.
The business revenues in recruitment business got hit by almost 50-60% by the end of 2008 and search firms are seeing no sign of revenue generation for the next two quarters.
?In the last three months, our recruitment business dipped by almost 20-25%. And 2009 will be the most challenging year in the last two decades,? said Shiv Agrawal, CEO, ABC Consultant Pvt Ltd.
Search firms have also started cost control measures where some of the consulting firms have also told their employees to work from home to cut down on overheads. Moreover, layoffs are also likely as firms may look at reducing manpower cost going ahead due to dip in revenues.
?New mandates at the top level have taken a hit. However, there is some hiring being witnessed in pharma, insurance, etc. Going ahead, small firms are likely to perish in the long term and those who are surviving are due to cash or savings still available with them,? said Ashish Arora, MD, HRAnexi.
According to Arunimma Sharrma, principal consultant, Execuzen Search & Consulting Pvt Ltd, ?The next three months are going to be very critical as it will bring about a clear idea of the year ahead.
The revenues are going down everyday. The situation now is of the ?survival of the fittest?.?
Big blow
• Almost 45% dip in revenues expected
• Search firms? fees shrink about 15-20%
• Revenues in recruitment biz hit 50-60% by 2008 end
• New mandates at the top level take a hit