There
are many who are not so lucky to get a job through their personal contacts or recruitment's advertisements. Many try to send applications proactively to the
companies in hope of getting a better job. Many resort to Employment Agencies
or Placement Agencies or other intermediaries for help. But few understand the
difference between the agencies, their role and usefulness. This article will
try to address this need. Broadly
speaking there are following type of agencies categorized in two categories:
Employment
Bureaus / Agencies
Recruiting
Agents
Placement
Agencies
Executive Search Firms / Head Hunters
Job
Portals/ Vortals
Outplacement
Consultants
Staffing
or Deputation Organization:
Non
Managed Onsite Staffing Services
Temp
Staffing
Professional
Employer Organization
Contract
Brokers
Onsite
Manage Staffing Services – Staffing Services
1. Employment Bureaus / Employment Agencies:
These agencies operate on very junior or unskilled workman level. Most of these
agencies charge their fees to Jobseeker. Traditionally, they would have a
Registration Fee and part of salary on getting the job. Government Employment
Exchange also fall in these categories. These agencies cater to small companies & for the workmen or Clerical positions.
Most of these agencies are very small and hardly help jobseekers, generally
thrive on the registration Fee. One should avoid as much as possible. These
days. Job portals would prove better alternative in that regard.
2. Recruitment Agents: These are those
agencies that get a mandate of manpower requirements companies in India from particular employer.
Most of the positions are in short term or temporary in nature. However some of
Recruiting Agents wouldjust act as
intermediaries to select the candidate. Most of the Gulf recruitments especially for unskilled categories are
done like this. Mostly Employer companies are expected to bear the cost, but
for unskilled categories, Recruiting Agent may charge the Job Seeker or Both.
This is most abused category with many unscrupulous operators eager to loot the
gullible. As per government rule maximum charges applicable is Rs 2000/- but
few recruitment agents would agree to that until a free recruitment drive
sponsored by the end Employer.
3. Staffing Services/ Body Shoppers: Many of
these Recruitment Agents would employ the persons in their own company and
second / depute them on the client sites. Till recently major portion of
software exports would accrue from such Body shopping activities. World wide
Staffing is around USD140Bn industry. Most of these companies specialize in a
particular segment. It is common for the large corporate to have their non core
staff on staffing or deputation purpose. Most of the short term requirements
are taken on staffing basis. In true sense,
a staffing company in India suppose to take an employee on full time roll and in
the event of no deputation to customer organization , staffing companies are
suppose to pay some bench allowance or full salary. In this payment to the
Employee is the liability of the staffing company irrespective of whether
customer pays or not. In India, staffing is common only in IT and knowledge
Sector. Government has not made many exist and contract laws clear hence slow. Temp Staffing which is very short
requirement like one month / two week basis Many companies specialize in this
category wherein they keep a roster of available resources and place them as
and when situation arises. The Temp Company pays company raises bills to the
Employer and employee. In Indi, it is still picking up . In fact current
staffing companies are the hybrid of Temp / PEO and Contract Brokers.
5. Professional Employer Organizations: This
is another $ 17 Bn Industry in US
primarily targeted on small business in which a PEO puts a small companies
‘employee on its roll and lease it back to the company . By doing so, employees
could be given perks like 401 K (pension) , Medical Insurance and other
benefits which are out of the reach of a normal employer or exorbitantly costly
. PEOs enjoy the cost arbitrage along with some Pay roll expenses. Payment to
the employee salary is the responsibility of the End Employer only. PEO only
process the pay roll and arrange distribution. In India, most of the staffing
Industry acting as PEO or Contact Broker albeit for large company. In fact
operations are the hybrid of a PEO & Contract Broking Company but growing
very fast.
6. Contact Brokers: In US, many companies
like to engage Independent contractors directly, however for the ease operation
they may use a contract brokering company. A Broking company raises the single
bill for number of contractors, receive payment, deduct its brokerage &
administration fee and pass the balance to the Independent contractor. Or End
Employer may pay Contract Broker its Brokerage and administration fee. The
contacts are back-to-back basis. In India most of staffing contract are on
these basis. But numbers are growing . Once exit laws are clear full fledge
staffing would come to Play
7. Placement Agencies: These are the
agencies, which mainly work in middle to junior categories (salaries Rs 2 Lac
to 8 Lac ). These agencies are driven by their databases of the candidates.
Once they find a good quality candidate, they may try to place them and make
money. Mostly paid by the employer on recruitment, but few may charge a
registration Fee to the job seekers. One should avoid those who charge the
candidate. These agency do not do any value add in the process except sending
the CVs to Companies. Many Job Portals, who do not charge to the job seekers,
are based on this concept. Placement Agency may charge 8.33% to 12.5% of annual gross salary of the selected candidate
to the employer.
8. Executive Search Firms/ Head Hunters: As
the name suggests, these firms search or hunt for senior/ top-level executives
(Rs 8 Lac to 2 Crore Salary). Normally operate at very senior level. These
companies are driven by their customer’s need. They charge fees from 20% to 33% of the annual Gross
package of the selected candidate plus other expenses. The fees vary between Rs
2 Lac to 50 Lac. An Executive Search Company is expected to identify probable
candidates, interview them and select them using psychometric and other
techniques. An Ethical Executive Firm would also conduct an in-depth reference
Check and background checks on the candidate. In Country like US, Criminal
history checking, HIV, drug addition tests are commonly conducted by these
Firms. These are highly reputed firms who don’t charge anything to the candidate
and would not have any moral or commercial binding with the candidate. On the
contrary, they would go out of the way to help and guide the Candidates.
However most of the placement agencies claims to be or position themselves as
Executive Search companies. One needs to know them better to differentiate
between them.
9. Recruitment Consultants: These are high
end Firms that advise customers what to recruit and how to recruit. The motive
of these firms is to help their customer in better and cost effective
recruitment. Some of these Consulting companies may execute the projects on
their own and some of them may use Executive Search firms or Placement
Agencies. These are rare breed and in the infancy stage. Not many firms would
fall in these categories.
10. Out placement Agents: These are special
agencies, which help companies to out place their redundant employees. Many
companies, who lay off their executives/ staff or offer VRS or issue pink
slips, use the services of these agencies to reduce the negative impact or VRS
or Pink slip on the employee. These agencies, help, consul, guide or even train
the redundant employees to find good jobs. They may even place them in other
companies. The Employer issuing the paying slips pays these agencies. India is
relatively new to this concept but soon catching up.
11. Job Portals: With the advent of Internet
many job portals have sprung up. In fact recruitment is the largest activity on
the net. Most of the portal acts as Employment / Placement agencies. The
portals are undergoing a see change in their role and efficiency. One should be
careful while dealing with these portals as privacy may be at the risk.
12. The recruitment Industry is a fast growing
and nascent field. The total industry is estimated to around US $300 billion
globally and is growing@ 20 % plus annually. This offers excellent high income
and professionally satisfying industry. On an average, a successful Recruiter
or middle, top level Recruitment Consultants in India in a small to medium size firm would
earn from Rs 8 to 15 Lac annually.
For more information about Magna Global HR visit :
Magna Global HR Private Limited
102, Jai Shankar Apartment,
Bhakti Mandir Road, LBS Marg,
Opp State Bank of Patiyala
Thane West, Mumbai - 400601
Phone No : 022-25441061/62
Email : admin@magnaglobalhr.com
Website : http://www.magnaglobalhr.com/
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