Wipro’s India and Middle-East division is expected to handover its entire staff recruitment responsibilities to HR solution provider People Strong in a deal valued over Rs 100 crore, people with knowledge of the matter said.
Talks are in the final stages and a deal is expected as early as this week, they said. According to the proposal, the Gurgaon-based recruitment process outsourcer (RPO) would handle Wipro Infotech’s hiring for five-seven years.
In recruitment process outsourcing, the employer transfers the entire hiring mandate to a third party, which takes control over the complete process unlike a traditional recruitment firm — from screening the candidate’s profile to interviewing and making the selection. Although this service was nascent in India until a few years ago, it is now expected to grow 40-50% because of an expected uptick in hiring over the next six months, according to a report by Randstad India.
More than 70% of Indian employers are expected to outsource complete or parts of their recruitment process over the next five years, the report says. Globally, the RPO market is estimated to be worth about $1.8 billion (Rs 11,450 crore) and in India, it is around Rs 400 crore. India and China are the emerging RPO markets in the Asia-Pacific region.
PeopleStrong said it cannot divulge customer-specific details.
Wipro said it is “considering partnering with leading service providers for specialized services in recruitment technology and processes” at Wipro Infotech. “We constantly evaluate innovative models to administer various functions and processes within the organization, it said in an emailed statement.”
Based on Wipro’s results for the quarter through September, Wipro Infotech contributed 9.2% to the more than Rs 10,000-crore revenue posted by India’s third largest IT firm.
Business is already growing quickly for recruitment process outsourcers.
“RPO will grow exponentially now that companies need workforce to scale up and there is insufficient manpower strength within the firms to hire in large numbers. We started our RPO around two years ago and business has doubled and enquiries from clients are up four times,” said Moorthy K Uppaluri, chief executive of Randstad India.
Although Rs 100 crore is a big-ticket deal, a lot depends upon the tenure of the deal and how many employees the client wants to recruit, he said.
Since Wipro doesn’t divulge the number of employees per business, the headcount at Wipro Infotech or the hiring plans for the unit are not known.
Outsourcing hiring will help Wipro Infotech reduce costs because the fee per position can be altered according to the business demand. “PeopleStrong with its analytics and sourcing techniques will conduct video interviews, online tests, match profiles, track the candidate till he accepts the offer, generate leads, complete the on-boarding and be responsible for any drop out,” said one of the people with knowledge of the matter. The employees hired by PeopleStrong will be on the payrolls of Wipro.
PeopleStrong in the past has taken up hiring work for Mahindra & Mahindra and HDFC Life, but the proposed deal with Wipro Infotech will be bigger than those. “This is good news and shows a step in right direction that big firms want to outsource their HR work.
If PeopleStrong delivers, we can expect more such clients to sign up,” said Shiv Agrawal, managing director and chief executive of ABC Consultants. The staffing firm’s fouryear-old RPO business is its fastest growing vertical, expanding at 60% a year.