New Manager

How entrepreneurial innovation is helping HR solve complex problems

Utkarsh Joshi | Updated on March 10, 2018


Players like Mynoticeperiod, Hackerearth, e-poise and Merajob are expected to play a role in changing the HR start-up ecosystem

Over the years, India Inc. has concentrated on human resource mobilisation and talent management to a greater extent, given the shift in gaining profitability for business through new and innovative HR interventions.

Given such a scenario, HR solution companies have witnessed considerable evolution with increased focus on technological interventions for staffing, recruitment, and other HR-shared services.

Mergers and acquisitions

Besides, with the maturing of several leading Indian HR solution companies in niche sections like recruitment, HR technology and services like payroll, training and development, there has been considerable foothold of specialised international companies in the country. This entry has resulted in some prominent mergers and acquisitions with top HR companies in India.

HR is also increasingly initiating strategic initiatives, such as wellness programmes and workforce analytics. With this focus, organisations have achieved lower turnaround, higher employee engagement, and more productivity, thereby benefiting from better business outcomes.

The advent of social media has considerably helped in the workforce revolution. Incorporating social media in branding and marketing exercises, majority of the companies including start-ups in India have integrated social technologies into HR functions.

With the country struggling to attract and retain top talent, social recruiting and referral hiring are definitely huge opportunities.

The HR solution industry is showing signs of maturity, evident in the news of Ikya and Teamlease preparing for an IPO in India.

Successful listing would signal a new era in the HR industry with coexistence of companies in various stages of growth and expansion.

With organisations increasingly working on employee productivity issues and cost cutting, innovative HR software systems are being accepted and used by the organisations, making it an attractive deal for the investors. In the recent past, HR software solutions from IT companies like Oracle and SAP have been in use by several organisations but new-age software and technology solutions, which could be customised to specific and evolving HR needs are fast replacing them.

These new-age technologies are also being integrated with social media platforms for better outcome.

Talking of HR start-ups,the technology players have consistently made efforts to build niche and innovative systems from scratch. The complex technology system manages employee data, tracks leave, monitors attendance, calculate payroll, generate appraisal reports, and use of data and analytics for recruitment and other strategic HR functions.

A customised solution specific to company and industry needs enhances the scope for research and development for increased market share. Such HR businesses make for lesser risk and substantial gain for the investors.

HR solutions is a highly competitive and fragmented industry that is poised for enormous growth in the coming years as companies increase their investment in HR infrastructure.

The search and recruitment market is expected to grow from ₹29.5 billion in FY11 to ₹62 billion in FY16 in low case at a CAGR of 15 per cent and ₹72 billion in high case at a CAGR of 20 per cent. In terms of temporary staffing, companies and captive units are likely to increasingly depend on agencies to lease them with the required manpower in time, to meet sudden demand from clients. The temporary recruitment market is expected to grow from ₹167 billion in FY11 to ₹400 billion in FY16 at a CAGR of 19 per cent.


Recruitment is expected to evolve from a fragmented ecosystem to players adopting ways to work closely with clients’ requirements, where recruitment companies are likely to move away from sourcing relevant candidates to accessing the right ones by using psychometric and other robust tests to shortlist candidates.

Recruitment process outsourcing (RPO) as a service offering is fast evolving significantly in India, wherein companies are increasingly adopting the outsourcing model to withstand competition. Many recruitment companies are offering it as part of their portfolios.

International players entering India are tapping the potential of the HR ecosystem. These players are working on the problem of matching people to jobs, and jobs to people, as well as coming up with more effective ways for employers to motivate their workforce.

A few players in this space are Mynoticeperiod, Hackerearth, e-poise, Merajob, Grownout, Mettlandmany, which have received funding and expected to play a major role in changing HR start-up ecosystem in India. The change will come with the handholding that investors would take in working with the entrepreneurs to help take the entrepreneurial spirit to grow the company.

The writer is Principal, The HR Fund, a VC fund dedicated to investing in HR solution companies

Published on April 28, 2015

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