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Appraisal time is a nightmare not just for employees – but for most managers too. They also find the task of appraising, evaluating and marking the performance of their teams a taxing experience.
That's where HR services companies are stepping in. Their job is not restricted to recruitments alone. It is spread across verticals such as HR software development, training, payroll, employee benefits and HR consulting. And appraisal services.
Prof Husam, CEO of HR services provider Team Lead, which has been witnessing over 100 percent annual growth, said, “Now more than ever, companies realise the importance of HR. The recession was a test for many companies, how they change and introduce best practices for survival.”
Cost-effective
He said that the major advantage of outsourcing payroll and appraisal services is that companies can save 30-40 per cent of cost, while making the payroll system more efficient.
Prof Husam added, “Outsourcing of appraisal in India is not very common and majority of appraisals done here are poor. It is at a very natal stage and many companies don't have a clue about the best appraisal system but this segment will grow in performance-orientated companies.”
“After the recession hit, the need to be cost-effective changed a lot of things. Now, not only payroll services, but also employee data entry, appraisal management, training, application filing, among other services, are being outsourced,” Mr Pankaj Bansal, Co-founder and Chief Executive Officer (CEO) of HR services company PeopleStrong.
Equipped with softwares and platforms specifically designed to be efficient and cost-effective, HR services companies are fast bagging big corporate clients.
This puts into perspective the growth potential of the Rs 26,000-crore HR industry, Mr Bansal said.
PeopleStrong, which was launched in 2005, has been witnessing a compound annual growth rate of about 110 per cent each year since its inception. The company aims at going public by 2015.
Both industry players as well as corporates feel that outsourcing paper-work intensive services reduce wastage of time and money, ensure efficient grading systems, while allowing internal staff in companies to focus on management of employee needs.
It is a win-win
Mr Gautam Chainani, Chief People Officer, Aditya Birla Financial Services, said that it is mutually beneficial to outsource HR services.
“It is more relevant to outsource routine and repetitive work as well as basic query handling to HR firms. Besides, this is their domain of expertise and they are always looking at improving their SLAs, turnaround time and so on,” he said.
Mr Sugata Dutta, Head of HR at Kotak Life Insurance, also added that outsourcing allows core HR staff in companies to focus on capability development and developing managerial skills.
Both Aditya Birla Financial Services and Kotal Life outsource their HR needs to PeopleStrong.
“HR industry is growing since the industry as a whole is developing. If market competition is high, HR segment also grows,” said Prof Husam.
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