He was one of the first, and also among a few, who made it big. How he started off with a ‘princely’ sum of Rs 60,000 way back in 1991 to start of Ma Foi is a part of folklore in the HR industry. On the way, he helped create career opportunities for more than 175,000 individuals in 35 different countries and has coordinated with over 204 Fortune 500 organisations. Yes, we are talking about none other than Mr K. Pandia Rajan, Managing Director, Ma Foi Management Consultants.
While his company was formed out of the desire to fill the gaping hole in the staffing needs in the West, the expert is seeing new trends now in the business. Opportunities when people exit! “What we are witnessing as a growing trend is that companies are outsourcing to recruitment firms, what are called exit interviews. This is a process that employees go through, post-resignation,” he shared with Business Line in a recent interview.
The rationale, he says, is that when an employee is talking about the factors that led to him or her moving out the company, some delicate topics (issues with immediate senior management, etc) may not come out in the open if the process is done in-house. “However, when the process is outsourced, the interviewing people tend to be more neutral and unbiased. At present we conduct close to 50 such interviews every month, and these are timed for about a month after an employee leaves an organisation,” says the maverick, who grew up in a village near Sivakasi.
For aspiring job-getters, he says that the education, training and consulting vertical will see a lot of jobs being created in 2008…
Edited excerpts from the interview:
What got you interested in HR in the first place?
My wife Latha and I started Ma Foi Management Consultants way back in 1992 with a capital of just Rs 60,000. The primary reason we began the company was that whenever we travelled abroad, we saw what a huge industry staffing was in the West. This led us to wonder whether we could start our own staffing company, to cater to the human resource requirements of companies across various sectors.
The recruitment scene in India itself took off mainly in 1994-95, once MNCs started setting up their operations in India post-liberalisation. With Mumbai, Chennai, Bangalore and Delhi, amongst others, becoming very vibrant, this largely helped fuel our growth that time. Today, Ma Foi has a global presence with 106 offices in 14 countries. We have truly emerged as a one-stop shop for all HR requirements of clients worldwide.
How do you see the current job scene, from the demand and supply perspectives?
We have been conducting the Ma Foi Employment Survey (MEtS) annually for the last four years in an effort to identify the sectors that are likely to see a lot of growth in the coming year. The report captures the employment scenario in 22 different sectors as of December 2007 and predicts the future employment trends of 2008 in the organised component of these sectors.
Conducted across 2006 units spanning all major industry segments from all over the country, MEtS 2008 shows that there will be a 3 per cent increase in employment this year, and as many as one million new jobs will be created.
The survey showed that the health sector will register the highest growth in recruitment at 8.9 per cent, followed by IT at 7.3 per cent, ITES at 7.2 per cent and hospitality at 6.9 per cent. In terms of actual number of jobs, the hospitality sector is likely to generate as many as 4,26,688 jobs, while the health sector and the education, training and consultancy vertical would generate close to 2,95,829 jobs and 1,66,005 jobs respectively.
Are there any shifts happening?
Clearly, there has been a significant shift from IT and ITeS being the largest job-creators, to sectors that were not expected to offer so much opportunity. Today’s youngsters have en entire plethora to choose their career options from. The Common Wealth Games in 2010 are likely to create many job opportunities in the aviation and hospitality sectors. The education, training and consulting vertical will also see a lot of jobs being created in 2008.
Current indications show that the impact on expected employment over the next one year is mixed. Some sectors such as mining, minerals, food products, furniture, and textiles are expected to turn in negative growth in employment while there are many such as health, hospitality, IT and ITES, real estate and construction that are expected to generate jobs.
India’s growth trajectory has changed considerably and both stakeholders — the corporate world and the government — are aware of the responsibility on them to uphold the new standards of growth and employment.
Do you think we need innovative solutions to handle attrition?
Just as it is vital for a company to attract the right talent, it is equally important for them to retain that talent. Today’s situation is such that companies are constantly vying with each other to offer better perks to their employees. While the nature of these perks may differ across levels, there is a need to offer something beyond just the pay packages.
Stock options, exposure to other markets, substantial incentives on meeting targets, foreign trips — these are all initiatives that have gained a lot of acceptance in the last few years. And this does go a long way in retaining people. It is important for one to keep in mind that it is not healthy for organisations to face attrition on a reasonably regular basis.
There are reasons why people choose to move jobs and it is the responsibility of the corporates to understand why these people are moving, and to address those issues accordingly.
What are the key metrics of your performance as a HR player? Are there barriers to your scaling up?
The way we see it, the efforts undertaken by HR consultancies towards personnel identification and placement must have a direct positive impact on the realisation of our clients’ overall corporate objectives. This calls for a clear understanding of what the candidates should have and a clearer picture of how exactly the new candidates will bring about the desired objectives to the organisation.
This being said, key parameters based on which HR companies are rated include the time taken to fill key positions; how long these positions were open; how many candidates were presented before the final selection; the profile of the candidates who are presented; the clients’ satisfaction with the new hires; turnover levels amongst the new hires, etc. We at Ma Foi follow the credo: Raise the Bar. While it is important for us to analyse what we are doing better than others in this industry, and look to constantly evolve the services that we offer, it is more important for us to constantly improve on our own performance.
If we have made a certain number of placements this year, we should do a significantly higher number next year. If we have trained a certain number of people in terms of career skills this year, then we should look at reaching out to more number of people next year; our career training division should be able to identify what more we need to offer to enhance the current employability rate of the workforce.
However, beyond all these, we constantly look to scale up the levels of our own offerings. More often than not, the challenge is for us to perform better than ourselves, than to perform better than our competitors.
You speak of how the rejection rate is as high as 97 per cent...
Despite the fact that there are millions of job opportunities in India today across various sectors, the fact is that industry is witnessing a serious talent crunch. Though hiring has been taking place on a regular basis, low employability of the hired resources is a serious issue. While there are instances where the workforce may be competent in their chosen areas of expertise and falling short only where the soft-skills are concerned, there are also cases where the recruits don’t even have the basic skills. The question that is being raised is whether this is due to an obsolete education system, which is not being refurbished to suit the changing needs of the economy.
What matters in today’s dynamic scenario is an aptitude to adapt to new working environments and an ability to understand the client’s needs and deliver accordingly. Employers no longer believe in fancy degrees and high percentages. The need of the hour is talent, which will lead to innovative thinking and creative delivery.
The combined phenomena of globalisation and technological progress do present the scope for economic growth and increased employment opportunities, but unless the workforce is well-equipped to deal with the requirements of the natures of the job, unemployment will continue to remain an issue.
What can be done to increase the rate of employability?
Today, almost every industry is staring at the employability challenge. Demand is outstripping supply of employable candidates — innumerable reports are being published on the interview-to-hire (campus/non-campus) conversion ratios. Our educational system locks millions of students in the bottom berth of employability depriving the country of its true potential.
The problem (as we all know) lies in a classroom environment that infantilises students well into their 20s emphasising silent note-taking and discipline at the expense of career skills. A few large houses have chosen to set up their own campuses/finishing schools as a backward integration mechanism for their own manpower needs and also supply talent to the industry.
Organisations feel more committed towards charting out the career path of potential employees from the very beginning of their career track. Candidates are attracted towards such opportunities as they are virtually guaranteed absorption. Leading players in industries seeking candidates with strong technical skills will set up their own campuses sooner than later.
Also, we are likely to soon see a few foreign business schools setting up operations in India. This will be a dream come true for those that could not afford going abroad. The future workforce (a larger section of it now) will get the opportunity to learn the best of both worlds — eastern and western practices, provided the course fees are kept at affordable levels for the mass.
For employers this would mean a larger pool of competent candidates to choose from. It could also raise entry level pay packages. More alliances will be struck between the industry and academia, a dire need of the hour. It could also mean more entrepreneurs will emerge out of these schools.
What are the geographic patterns of significance to the prospective employers and job-seekers?
Over the last few years, we’ve seen many people being a lot more flexible to moving across cities — sometimes even countries — if the job prospects are lucrative and exciting. We’re talking about a scenario today where even the process of recruitment is being taken to the virtual level.
Recruiters sit in one location while candidates from distant locations are interviewed via video-conference. So, in such a scenario, the willingness to move to different locations for job prospects is significant. What candidates do look for is challenging role, good remuneration, key responsibilities, a clear career path and good opportunities for growth.
Any specific insights about expats and returning Indians in the job scene?
We are seeing a strong trend of expats coming to India for work. Rough estimates say that close to 30000 expats are working in India. The primary reason for expats coming into India for employment reasons is the first-hand exposure to a rapidly growing business economy, as well as the quality of the work experience that they will get here.
They also come in when the opportunities in their own countries or the pay packages are not up to their expectation levels. We must also bear in mind that working in a foreign country makes a candidate look very efficient, as this proves them to be adaptive to new environments and cultures. Previously, it was only the IT and ITeS sectors that saw many expats coming into India. Today, many more sectors are opening up in terms of job options for the expats. These include retail, hospitality, manufacturing, analytics, infrastructure and the pharmaceutical sector, among others.
We are also seeing an increasing number of Indians returning to India for employment opportunities. This is especially true in the cases of the IT and ITeS sector, as well as the retail, telecom, banking, financial services and the automotive sectors. With the infrastructure boom in the country, many NRIs associated with the infrastructure sector are also looking to come back and head and handle construction projects.
Growth stories of these and good pay packages are the factors that are attracting the NRIs back to India. Some others cite personal reasons such as family, aging parents and education of children as reasons for relocation. Going into this scenario a little further, the South Indian cities of Chennai, Bangalore and Hyderabad are being preferred by those returning to India.
For example, while the number of people who returned to the South was about 600 in 2000, this grew to 2500 in 2006, with a further 25 per cent growth in 2007. However, the global slowdown may bring this down to 20 per cent in 2008.
Can you tell us about the temp market in the country?
The global temporary staffing industry is estimated at $140 billion. The industry size in India is estimated to be $111 million. Currently, the top five employers in India account for nearly 1,20,000 temp employees in the organised sector. Temporary staffing accounts for 0.03 per cent of India’s total organised workforce of 40 million. In developed countries, it is around five per cent of the total workforce. These figures offer a clear window into the size and potential of this industry.
It is said that within the next couple of years, companies across different sectors will have at 3 per cent of their workforce on a temporary basis. The primary reason for corporate to opt for temp staffing is the current scenario where talent has become scarce and expensive. According to people across HR strategy firms, temp staffing will be increasingly used as a mechanism to offset costs by companies across different sectors.
This also allows the companies control over output as well as the cost of hiring. In fact, companies are known to have saved anywhere between 25 and 40 per cent, by opting for temp staffing. This kind of contract staffing also helps companies to identify talent with specific skills, as per the requirements of the corporate.
Of late, verticals other than the traditional IT have started opting for temp staffing, including the infrastructure and pharma verticals. An allied factor is that youngsters today are also looking at flexible working hours, which increases the available talent pool.
Globally also the current ratio between permanent and temporary employees is 50:50 in the US and Europe, from 70:30, a few years ago. While the contract working staff in India is less than 10 per cent, this is expected to go up by another 5-10 per cent in the next couple of years.
The visible trend is that people who want short-term options, freshers wanting to gain experience, experienced people for specific experience and, of late, even top management resources for interim management options, form the temp staffing pools. However, the fact remains that the biggest gainers from this option are the freshers.
The attitude of today’s workforce is being shaped by rewarding employment opportunities that are coupled with career guidance and flexibility to choose the nature and duration of work. Temporary employment has often been an effective entry route into big companies. Temporary staffing is expected to grow exponentially in the near future. The quality and ease of availability of manpower will gradually lead to the absorption of this workforce into certain core business areas of the organisations also.
In a recruitment market where the concept of full-time employment is increasingly becoming a thing of the past, temporary staffing is emerging as the viable option.