Coronavirus pandemic | Recruitment firms stare at bleak future due to freeze in hiring activity

At a Bengaluru-based recruitment firm, the past two weeks have only been about cancellations of interviews from clients in the wake of the coronavirus outbreak. As a result of the 21-day lockdown announced by Prime Minister Narendra Modi to contain the spread, hiring activities have come to a halt.

"There will be a minimum 50 percent dip in hiring in March and April and this will have a direct impact on our revenue," said the chief executive of a firm.

March and April are among the busiest periods for recruitment firms since companies hire talent for the new financial year. However, now corporates have told employees to avail work-from-home facility for non-essential services. Hence, hiring activities have also been delayed.

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Recruitment consultants told Moneycontrol that while a few companies have adopted technology to hire people, rest have put hiring plans on the backburner.

If the situation continues till May, industry sources told Moneycontrol that the hiring firms would have to take a hit of 40-50 percent in revenues.

Also Read: Coronavirus impact: Are you financially prepared for a job loss?

An American multinational corporation in the consumer goods had engaged a Mumbai-based staffing firm to build its India team. However, when this company was told that all positions would have to be filled through e-interviews they backed out.

“We ended up losing an almost Rs 2 crore project because the company wanted only face-to-face hiring. Further, four candidates who were shortlisted for senior management positions were not comfortable joining without physically meeting the global team,” said the managing director of the firm.

The recruitment industry is currently estimated to be USD 6 billion (Rs 45,000 crore) in India. Both Indian and multinational firms operate in the country and a total of about 23,000 such companies exist in India.

Among sectors, IT/ITeS and consumer goods account for the largest portion of the industry’s business by volume while BFSI contributes the largest by value.

Amidst the COVID-19 crisis, corporates are also unwilling to hire since there is no certainty on when business comes back to normal.

The executive director at a specialist IT hiring agency said that since the companies themselves do not want to spend money hiring new people, their business is automatically hit.

With COVID-19 cases rapidly increasing, the recruitment firms themselves have not fully converted to e-operations.

The Vice-President of a pan-India consulting and staffing firm said that their own employees have carried office desktops to their homes due to  dearth of laptops.

“Some client data is confidential and hence we did not have a policy of allowing customers to bring their own devices. Over the past two weeks business is almost on a standstill and we expect that this will be the case till May,” the official added.

A Delhi-based CEO of an executive hiring firm said that they have been worst hit than others due to their nature of business.

"For CXO-level hiring, video interviews are not preferred. Hence over the past 10 days we have just been literally sitting at home waiting for a new project. But none so far," the CEO added.

Among the recruitment firms, the only ones still running operations are those helping companies in internal human resource strategies and succession planning initiatives. The work the hiring firm are involved in, include personnel management and finalising hiring strategies for the next financial year.