We provide both staffing and permanent placement, where we place candidates in client organisations. For our staffing business, we hire the people in our payroll, but they are deputed to clients.
Staffing firm Randstad India is a 100% subsidiary of Randstad NV — headquartered in Diemen, Netherlands. In 2020, the company earned €293 million revenue, growing 7% over the previous year. Randstad India MD & CEO Paul Dupuis and its chief financial officer Viswanath PS share the company’s plans for India with Surya Sarathi Ray.
Q: How long has the company been into India?
Viswanath: If you look at our legacy, we have been there since 1992 under the Ma-Foi brand. Randstad acquired a major portion of the business in 2008 and we became Ma-Foi Randstad and in 2012, we became Randstad India. We are not listed here in India.
Q: How much revenue did you earn last year and what kind of growth are you looking in the current year?
Viswanath: Our revenue last year was €293 million, which grew by 7% over the previous year. Paul and I put up a business plan for this year. And at that time, we didn’t know that the second wave is going to come and it’s going to be this severe.
Paul: If you were to look at all of the listed staffing companies, both global and domestic players operating in India, we outgrew everyone last year. Quarter one of the current (calendar) year just has finished. Quarter two visibility looks solid for us as well. So, we see high single-digit growth again this year now. That’s the plan.
Q: What is your revenue model?
Viswanath: We provide both staffing and permanent placement, where we place candidates in client organisations. For our staffing business, we hire the people in our payroll, but they are deputed to clients. We bill for their cost and a service fee. In a permanent placement, we identify and source a candidate to the client. The client makes the recruitment and these employees are in their payroll. We charge them a fee for sourcing the candidate.
Q: So how many people are there on your payroll now?
Viswanath: We have close to 65,000 people, who are deployed in client locations. Around 90% of them are white-collar. Blue-collar is something which we have stayed away from in the past, because it comes with its own challenges. But, if we have the right value sets that match with us, then we are good to go.
Q: Which are the sectors do you cater to?
Viswanath: If you look at the profile of our candidates, it could be people who are doing low-level entry jobs like from accountants, HR professionals to doctors, pilots, to even expatriates. We also do engineering, technology staffing. We have quite a few IT professionals, who work for us. Our clientele is very diverse.
Q: Government has legalised fixed-term employment. Do you foresee surge in fixed-term employment in the coming days?
Viswanath: I would say in companies all CHROs and HR teams and managers are going to start looking at their workforce very differently. Right now, permanent employees form a predominant portion of the workforce. I think in the new normal, it could be very different. So, there would be a right mix of permanent employees, more contract employees. They will also have fixed-term employees and gig workers. The mix is dramatically going to shift.
Paul: Over the past year, we’ve seen a trend of strategic workforce planning. It was not the case earlier. We are seeing a shift — companies that were very heavy on core full-time employees are now shifting the scale more towards temps, contractors, even gig and freelancers. But, I don’t think you’re going to see a company go under 50% on core full-time employees — that’s risky. We would never advise it, unless the company is a feet-on-street sales model.
Q: What should be the ideal ratio?
Paul: There is not one ideal ratio. In the fast-moving consumer goods industry, you wouldn’t want to have more than two-thirds of your employees as core full-time. But if you’re going to manufacturing, if you’re heavy on low-skilled to semi-skilled manufacturing, which is also seasonal, then you can go higher, you could probably go almost 50%.
Q: Of the sectors that you cater to, which are downsizing?
Viswanath: People who are in the hospitality segment, travel, tourism and aviation are downsizing. Food and restaurants sectors are also affected. They are the ones who are letting go. Exactly during the same time last year, newspapers were flooded with companies downsizing, people were losing jobs, some of them have still not got regular jobs. But companies have also learned to become a little bit more compassionate. They are dealing with people with a lot more empathy and trying to keep them, may be not giving them a pay raise. But they are still protecting jobs.
Q: As a company, are you looking for inorganic growth?
Viswanath: We came to India with a big acquisition of Ma-Foi, we had some other acquisitions at the global-level, which had presence in India. So, by default, they came as part of the Randstad family and so on. But our strategy is never just to go for inorganic.
Paul: We already have a strong presence across India. Geographically, we’re already one of the largest when it comes to presence. We don’t have any facilities business, we might look at a company that has it. But right now, that’s not in our strategy. In the areas where we play right now, in many of those, we are the leader in India, if we are not the leader; we are in the top three. We are growing at the fastest rate organically than any other company in India in the space. So, we are going to keep on accelerating organically.
Our executive board, in our quarterly report, has said India is growing fast, it’s a spotlight country, and they plan to continue to invest in India. So, we are here, we are here to stay, we are here to grow.