Franchising: a better option
An interview with Doug Bugie, president – Antal International Network on the recruitment franchising scene of India
By: Yasmin Taj
What are the growth prospects of the franchising industry in India?
Franchising as a concept is related to all fast growing businesses. According to a report by KPMG India Pvt. Ltd, this industry is expected to quadruple in volume in the next five years, accounting for almost 4% of India’s gross domestic product (GDP) in 2017. The industry is projected to provide almost 11 million employment opportunities by 2017 and has a growth rate of 25-30 per cent – the second fastest growing industry.
Today, with the current financial scenarios, investors are looking for a business model which has less risk and faster growth prospects. Franchising as a concept is a way to be an entrepreneur within a tried and tested framework and Indian consumer market is really very buoyant due to an increasing burgeoning middle class and brand awareness.
Against other service franchisees, what is the USP of recruitment franchising?
Talent is always going to be in demand. The current trend is that the big companies, as well as small and medium enterprises want to hire internationalists and candidates who want to get an international experience. Also, highly skilled mid-level talent is becoming more difficult to find: an aging workforce, skills shortages and globalisation are just a few of the markets pressures making it complicated for companies to identify, recruit and retain the best talent. Recruitment business is straightforward to operate in. You may recruit in any industry you understand, so you don’t need to learn anything new. If you come from an IT background, you can place IT candidates and if you come from finance you can place finance candidates. The only thing you need is to learn how to do recruitment.
Please share your views on the recruitment franchise scenario in India? Is it a popular mode of franchising and is it growing?
The Indian recruitment market is less than 10 per cent the size of the American market. It will take less than 10 years to cover the gap; The Indian recruitment industry is approximately worth Rs 12000-13,000 crore and growing at around 22% per year.
The recruitment industry is seeing a paradigm shift; today, clients need specialist recruiters to help them find the best people for specific roles. Recruiters handle almost 60 -70% of the corporate hiring today. There is a high need for specialised recruitment business wherein the experienced corporate
professionals as recruitment business owners can help employers to source outstanding candidates from the global talent pool.
Why corporates need professional recruiters to source the best talent?
It’s a fact that finding and attracting the top talent is not an easy task; however, companies don’t go by this fact and continue to take on this tedious task of recruiting; assuming that it will save them time and capital.
HR managers depend on referrals, job boards, etc to source talent, which can get them good but not great talent. There is a rare chance that the HR manager will fill that position with a star performer because at most times, an A list performer is not on any job portal but at your competitor’s office performing extremely well. These individuals are not actively looking for a job on job portals and are not keen at looking at the ads in the classified sections of newspapers, job portals or social networking sites. This leaves the HR managers with the average lot and they are forced to hire these candidates. An agency recruiter headhunts; this is their everyday job – to headhunt and build their talent pipeline. Yes referrals, job portals are an easy way out, however qualifying these candidates, getting them interested in the job, screening the candidates, the entire procedure is extremely tiresome and time-consuming. Bringing in a recruitment agency just simplifies the process and the results yield the best candidate out of the massive talent pool.
When looking for franchising option for a business, what kind of a checklist must a prospective franchisee have OR what are the expectations from a franchisor?
Before any prospective business owner decides on their business strategy, it is important to consider how they would like to be recognised in the market. Taking up a franchisee will help them to leverage on the brand name and their expertise will add bottom-line value to the vision of their venture. People usually look for the methodology and culture the franchiser offers. They look for post-sales support such as training, IT, etc
What is the potential in hiring activity in 2014?
The 15 Antal Global Snapshot survey found that the percentage of companies currently hiring in India stands at 38%, a 2% drop year-on-year and down on predictions made in June 2013. However, the level of companies shedding staff has also fallen, decreasing by half. This indicates a more measured approach to recruitment from Indian businesses, as organisations look to develop the managerial and professional talent they already have on their books. The outlook is set to improve as the number of organisations planning on hiring in the next quarter is set to rise to 39%, hopefully indicating a return to optimism from Indian business.
While setting up a new business and expanding it, what are the challenges that can be faced by a franchisee in this business?
The major challenges are that establishment is very tough and one has to jump and search for opportunities. Getting into an aggressive sales environment, recruiting staff to work under your leadership and retaining that staff is difficult. Recruitments is still not a sought after career in India; hence, high-achieving, smart young graduates do not step into this career. The move from a corporate where you have teams working under you to just being by yourself in the first initial months, can be very taxing.