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Fall in share price is disproportionate to business we have got, says Quess Corp's Ajit Isaac

Job platform Monster, whose India SEA and Middle East businesses are owned by Quess Corp, will be rebranded into talent management platform foundit.

November 25, 2022 / 06:01 PM IST

Job platform Monster on Wednesday announced that it was going to transition into a talent management platform, and also rebrand into foundit. The shift, said Monster chief executive officer (CEO) Sekhar Garisa, is to go from just being the point of discovery for recruiters and candidates to becoming a platform that does more in completing the process of hiring.

“As a candidate, the platform is not just telling me there are so many jobs, it’s actually helping me get there. How? Through a combination of making your resume better, helping you prepare specifically for the job because we know what job you applied for,” Garisa said.

Also Read: Monster India CEO, top staff share goodbye notes, but none of them quit

For recruiters, it’s moving away from just throwing scale in terms of all the persons who have the required qualification, he said.

“What we are saying is here are these many people, but because of who you are, what kind of an organisation you are, I can help you with reducing the top of the funnel to people who are very personalised to your search, to your organisation,” he said, where, for example, a recruiter can filter candidates by various parameters.

Garisa says the transition from Monster to foundit will be over a 12-month period, to protect the brand recall as well as to protect the organic traffic Monster currently gets.

Quess Corp’s business

Monster’s rebranding comes at a time when parent Quess Corp has seen a decline in profit, dragging its stock down by over 50 percent in the last year, and close to its 52-week low of Rs 425.75.

But Ajit Isaac, non-executive chairman of the Bengaluru-headquartered company, said that during the last quarter, the company’s top line grew even if net profit declined, and pointed to the difficulties in IT hiring that were reflecting on the professional staffing business.

Isaac called this a market phenomenon that happens every three years. “We think another two quarters of pain may be there in the IT staffing industry, but general staffing is on a tear,” Isaac said. He added that while other business lines are doing well, this is a temporary phase they have to ride out.

“When the times are good, you do reap the benefits of it and harvest it. When it is difficult, you have to consolidate it and prepare for the next cycle, which is what we’re doing right now,” he said.

In terms of the company’s share price, he said it has dropped like this twice in the company’s lifetime, the first of which was at the start of the pandemic. Isaac says that at the time, the company’s headcount had declined, whereas this time it has increased.

“I think it’s a disproportionate fall to the business that we’ve got. We are a listed company, and a listed company’s investors like predictable results. The last quarter had a dip in our earnings despite our top line. I think there is some correction we have to do to ensure that there’s more predictability,” he said.

“Predictability should take care of that (return to shareholders) and return to a 20 percent ROE (return on equity) for our shareholders,” he added.

Isaac said that while the contribution of the IT sector could drop significantly over a period of time, the company’s other businesses will grow.

“As newer product companies begin to do transformations, they will change the colour of our P&L (profit and loss account) over a period of time. We’re in this for the long term, a one- or two-quarter situation is not something that gives us any butterflies,” Isaac said.

Tech hiring

For IT companies, the second quarter of the fiscal year was marked by reduced net additions as well as some companies delaying absorbing new hires they had made offers to. The slowdown in hiring by IT services companies after a period of significant headcount additions due to the pandemic was visible in Quess’ business as well.

Isaac said that companies are looking to increase utilisation and reduce the bench strength, but added that taking on fresh hires was deferred due to project delays. He said that due to this, recruitments that companies proposed in the last quarter of this calendar year have got deferred to the next financial year.

However, he added that there are pockets where there is still significant demand, such as offshore development centres of companies that are outsourcing to India and SaaS companies.

“In both of these areas we will see demand, and they are fairly immune from the downturn that’s happening,” Isaac said.

He highlighted that the attrition numbers are still significantly elevated, which he believes is harming the industry. “India needs to see less attrition for the health of its own IT ecosystem because some companies are rebuilding entire workforces every three years,” Isaac said, adding that because of this, companies are losing competencies, intellectual property sometimes and client relationships.

“It’s difficult to let a culture dwindle or become debilitated and still hope to build an institution. It’s necessary for the health of the ecosystem in India that attrition comes down. If there is a corrective situation like lack of hiring now, salary cuts that is forcing people to stay back longer, I think it’s nature’s way of ensuring that attrition does not break our back,” he added.

The pandemic-led increase in demand was also witnessed among startups that raised funds and hired in large numbers, with several now seeing layoffs.

Despite this, Garisa maintained that tech talent is not in a situation where supply is more than demand. He stressed that there may be a struggle with freshers just entering the market as people want job-ready resources, but reasonably tenured and good tech talent was still in demand.

However, in terms of overall demand, Isaac said enterprises that have a need to digitise continue to hire. Banking and financial services is where they saw the most hiring from their general staffing business, he said, apart from manufacturing and infrastructure.

Moonlighting

Moonlighting has been the buzzword in the IT industry of late, as companies look to solidify their stance on the matter, from completely disallowing it to forming policies around it.

Isaac said that a one-size-fits-all approach will not work. “I don’t think our own safeguards and methods to protect IP, etc, has grown to a point where we can allow moonlighting very easily. Second is that in the Indian firmament, our recourse to law is not very easily available, sometimes it takes years for a case to get resolved. So in case you have a situation where something is breached, it’s difficult to find recourse very easily,” he said.

He added that given the circumstances, employers and companies will be hesitant to allow moonlighting to take off, as it is early days and there are no established norms yet.

“Given our sometimes enthusiastic approach to make a little bit more on the side, you may be tempted to do things that take you to the slippery edge of what’s right and wrong,” he said.
Haripriya Suresh
first published: Nov 24, 2022 12:51 pm