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More HR cos may go for global tie-ups

Anjali Prayag

"The Indian sub-continent forms a huge reservoir of human capital. This is a key attraction to gain a quick go-to-market advantage through existing Indian organisations."

Bangalore , Dec. 30

WILL the small-time HR consultant become a thing of the past? Will the HR staffing solutions industry see more marriages between Indian and global HR companies in the coming year? If the year 2004 is anything to go by, global tie-ups in the Indian HR industry may well be a trend in the coming year.

This has been a year of takeovers for the Indian HR industry. Vedior acquired a 76 per cent stake in Ma Foi Management Consultants, Adecco, a Swiss-based global staffing and HR services company, picked up a 67 per cent stake in Bangalore-based Peopleone Consulting, Monster Worldwide Inc bought Jobsahead, a job portal. Globally too, there were tie-ups: Hewitt Associates merged with Exult Inc, a worldwide HR company.

Explaining the reason for global majors setting foot in India, Mr N. Muralidharan, Managing Director and VP, Jobstreet.com India says, "The Indian sub-continent alongside some ASEAN countries forms a huge reservoir of human capital. Hence, mergers and acquisitions take place. This is a key attraction to gain a quick go-to-market advantage through existing Indian organisations."

Global staffing majors such as Vedior, Adecco, Manpower get Request for Proposal (RFPs) to meet staffing requirements in India, from their key transnational clients, according to Mr Pandia Rajan, Managing Director and CEO, Ma Foi Consultants. "To be globally competitive, like in other industries, staffing companies have to be strong `locally' - in most cases the talent requirements are met locally," he said, adding, "It is easier to acquire strong local players with established processes and intrinsic knowledge capital, than build it from scratch."

According to Mr Dale Gifford, Hewitt Chairman and CEO, the merger between Hewitt and Exult will create a true leader with the most flexible and broad HR solutions.

Mr Sudhakar Balakrishnan, COO and Director, Peopleone Consulting, says that the Adecco takeover has helped the company adopt best practices followed across the globe and also get global clients as reference.

But will this quiet shakeout mean the end of the road for smaller players in the industry? Mr Balakrishnan is of the view that in the next three-four years, there would be three large national players having a dominant market share with a few regional players co-existing because of their local and domain strength. Increasingly, smaller players will experience a rising entry barrier to MNC companies and even large Indian companies with global practices, predicts Mr Pandia Rajan. "The concept of `one-man HR consultant' is likely to wean when the industry consolidates," he says.

On the other hand, Mr Muralidharan of Jobstreet feels that as long as smaller companies can offer value to a client, they need not worry about getting lost in the shadow of the giants.

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