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India – Randstad CEO: Profitability in India has not been good

24 September 2013

Ben Noteboom, Global CEO of Randstad Holding NV, has been a frequent visitor to India over the past decade. Worldwide, Randstad finds permanent and temporary employment for an estimated 500,000 people every day. In India, it has around 60,000 employees on contract with various organisations, reports the Business Line.

According to Ben Noteboom, the Indian job market will improve not only because of exports but also because of the local economy. In an interview with Business Line, he discussed the labour market in India.

Is the global economic trouble affecting the HR industry?

We had a different experience in the last few years. In Europe, which has been in decline, the biggest turnaround is happening in southern Europe, especially in Spain and Portugal. The US has been growing for us in the last two-and-half years. In South America, Brazil, Argentina and Mexico are improving. In Australia it is not improving as we do not cater to the mining industry. Japan and China are growing.

What about India?

We see growth here, too. And, within Randstad, we have made quite a few changes. We have become more focussed on search and selection, which is permanent placement of professionals in sectors like finance, information technology, engineering, sales and marketing. In staffing, we are not present in blue collar, which is a segment we want to be in. We can also offer HR advice to companies.

How is business for you in India?

Profitability has not been good when compared with the company’s standards. We have invested as we see India as a big opportunity despite the criticism that I see in newspapers. We do not change our minds because of news articles. We tend to follow our own course. We also offer global employment opportunities to Indians here, but 99% of the hiring is in India. We have 25% of revenue based on international contracts.

What factors do you attribute to the optimism?

Development is happening despite the slow growth. I am an optimistic person and believe in common sense. Germany, with 4.2 million unemployed, changed the rules of staffing and made it easy for us to operate. If you look at India’s official labour market and compare it to the size of the country, there is an imbalance. There are 40 million jobs and that has to grow.

Is the job market slowing down?

If you look at younger markets like China and India, employee loyalty is relatively low. The only thing you can do is to fulfil the needs of your employees and make the job interesting. The money part is higher on the list than anything else. Also, in India, the attrition rate is high and we help them in the shift.

The HR industry has been seeking changes in policy to help the industry. What is your view?

The fact that I am optimistic does not mean that everything is perfect. The potential of the market is big and things will get better over time. We need to do lot of lobbying with the government, and it will get better.

What changes are you referring to?

We should be recognised as an industry. A national permit should be given to hire people across the country, and there should be less of red tape. We need a balance between the interests of employers and workers. If you have a vision that instead of 40 million jobs in this country, you had 100 million, you make official work easily accessible and more efficient. Research shows that if you have a good, regulated, flexible labour market, unemployment will be lower.

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