The Times of India: Companies cut hiring costs with in-hous...
globalhunt news and media

Companies cut hiring costs with in-house cells


Namrata Singh | TNN | Updated: Nov 8, 2017, 08:16 IST

Mumbai: In a tough market environment where search firms are operating on thin margins, this may further add to their woes. Some organisations have set up in-house talent acquisition cells that operate on the same lines as external search firms. Sun Pharmaceutical Industries (Sun Pharma), Philips India and Johnson & Johnson (J&J) have already built in-house capabilities to hire executives.

It is learnt from HR industry sources that other companies could be considering similar models. Such a move would mean lower costs on hiring for companies.

Sun Pharma EVP & HR chief Yash Mahadik said, "We have built a small team of people who have come with significant amount of search firm experience and they form our in-house executive hiring cell. The model we operate on is exactly that of an executive search firm with sharp focus on attracting and hiring best-in-class professionals. We recently concluded the process of a very senior person joining our company's apex core management team and the end-to-end attraction and selection process of this was carried out by our internal cell."

Another big advantage of having an in-house executive search firm is the ability of the team to find talent with the right culture fit. Last year, Philips India set up an internal talent sourcing function for priority roles that require extra attention. In functions like R&D, software engineering and quality & regulatory (Q&R), the talent sourcing function largely meets the senior talent requirement on its own, without seeking help from any external agency.

Philips head of India talent sourcing, Sameer Karayi, said, "We are attempting to reduce our dependence on external search firms in a phased manner, wherever possible. In addition to the priority talent in R&D, software engineering and Q&R, our internal talent sourcing function works on talent outreach for certain leadership roles as well."

At J&J, the move stems from a global decision to build talent acquisition capabilities around the world about three years ago. J&J India's talent acquisition strategies are linked to the global talent strategy. J&J HR head Indrajeet Sengupta said, "We have now started helping the global talent acquisition team in building some of the talent mapping capabilities in the executive hiring space from India for the world, which is a first."

J&J India has focused its talent sourcing efforts through employee referral and digital channels while also building in-house capability in talent acquisition. "This has reduced dependency on external agencies to less than 20% today from over 45% three years back. Today, our talent acquisition team has ramped up capabilities to source and recruit mid-management talent pools. Locally, we still prioritise and use external agencies where appropriate," said Sengupta.

One disadvantage about an in-house search cell, however, is that talent that is dormant or passive with regard to the job market often tends not to respond to companies versus their openness to having a conversation with a third-party executive search firm. But, talent that is active in the job market is equally open to conversations with companies or executive search firms.

Sun Pharma's Mahadik said, "With the success that we have tasted so far, we are now scaling up the team. Our objective is to backfill 90% of vacancies arising out of our top 300 leaders of the company worldwide by growing our own internal talent and, if necessary, utilising our in-house hiring expertise to support this. Given the way we are progressing with our talent management and acquisition, we feel confident of achieving this objective within the next two-three years."

Search firms, on the other hand, are already looking at offering value-added services to retain clients. Executive search firm GlobalHunt's MD Sunil Goel said getting the right people at the right time is becoming essential for business growth for any organisation. "The industry is moving towards either building its own in-house centre of excellence in recruitment or outsourcing to a recruitment process outsourcing company. It not only helps in recruiting professionals for the local market but also global sourcing," said Goel.

This does not mean that these companies will not consider utilising services of external search firms. Mahadik said, "There could still be a highly specialised and a new capability laden position for which we may require expert and niche services. In my prediction over the next five years, more firms will successfully move towards this talent-acquisition model."

As for entry- and mid-level positions, companies like Sun Pharma have reduced its dependency on job-placement firms and have moved towards social and digital hiring by building in-house capabilities and forging strong partnerships with new-age technology firms and in-house digital channels.