Paul van de Kerkhof is a veteran with Randstad, the €17-billion Netherlands-based human resource service provider.
With over three decades of experience in the HR industry, he took charge as Chairman of Randstad India in January. In the past, he has been closely involved in Indian operations, especially in the acquisition that helped Randstad to become a large HR player in India.
In his mid-50s, Kerkhof, after serving as head of Randstad’s China operations, has come to India with a mandate to ensure that Randstad benefits from its operations here. He spoke to
What’s your mandate in the new avatar?
We are currently having a review of our business opportunities in the market to define our strategy for the coming years.
What are clients’ expectations?
Clients are asking for partners. The boom i years are behind us and it is now about consistency, quality and reliability. We have to align our company in that direction to meet those requirements by putting in place a better account management. This will help us to be closer to clients, whose needs are changing from ‘we need people to we need the right people’. They want us to take responsibility for the outputs that our candidates deliver. The good news is that we already have rich experience in this field in the US and Europe and can bring in those methodologies to India. We offer candidates work based on clients’ requirement.
This means, you get involved at the board level of a client?
We have clients where we are strategically connected at the board level. They tell their plans and the challenges they face and will ask us to plan the recruitment accordingly. We are serving the top 500 companies in the world, and they challenge us to reduce cost by maintaining the quality and to be flexible. These are the main issues to be taken care of if a company needs to be a top-notch company.
How many clients have completely outsourced the HR function to you?
There are over 1,000 clients in the US and Europe. This model is prevalent in mature markets and there is a significant difference in each client requirement.
How is the state of the HR industry in India?
The age of the HR industry in India is about ten years. It is in a very early stage of development when compared to the US or UK where it is nearly 50-years old. The penetration of staffing in India is 0.1 per cent while in advanced markets it is 3-5 per cent of the total population.
What should be done to increase this percentage?
There is rigidity when it comes to laws governing the labour market. You do not have a flexible labour policy in the country. It is easy to hire but difficult to demobilise. One of the reasons why India does not have a huge manufacturing base compared with China is that here demobilisation or retrenchment or adjustment of the labour force is extremely difficult. There are enough studies done globally to show that wherever there is a flexible labour market, it directly leads to better GDP growth of that country.
For example, the UK, US and the Netherlands are considered to be fairly flexible labour markets.
The US is a very good example, and has one of the most flexible labour markets. Even though the market may go down, it can bounce back very fast. Wherever you have seen rigid labour markets, including Italy and Greece, they will find it difficult to recover. From a macro perspective, the labour market should be made more flexible. Today, the industry has too many constraints. For example, when we have to recruit a flex or temp worker, there are too many licensing norms we have to go through, which makes the cost of doing business expensive.
How important is India operations for your company?
We have big operations here and the potential is big. For our clients, it is absolutely necessary that we should be here to help them in recruiting people. We are also transferring people from India to other countries and vice-versa.
How is competition within your fraternity?
Ten years ago, it was us, Adecco and Manpower. Today, there is competition from every direction, including online and small players.
How is India as a market?
Financially, India is not very significant for the global operations but quantity wise it is very significant. However, we expect that in the next 20 years, this will dramatically change.
We are here for the long haul. We need to be profitable, efficient and prove every day that we are doing a good job. We will never, ever pull out of India even it is a loss making because in two decades, it will be significantly important for our company. Same calls for China and Brazil.
We have various investment programmes in those markets. We are a market leader and want to stay a leader.