The Indian job market continues to be upbeat as companies are going ahead with their hiring plans for the July-September quarter despite macroeconomic headwinds from high inflation, rising cost of money and ongoing geopolitical tensions. The Teamlease Employment Outlook Report showed that more than 61% companies intend to hire for white-collar and blue-collar roles in the quarter, compared to 38% a year ago. The hiring intent is up 7% from the previous quarter in India.
Problems & Opportunities:
- Growing demand for ecommerce [grocery, food, medicines, apparel] & quick commerce [grocery] leading to High demand for delivery & warehousing executives requiring hiring at scale which traditional unorganised mode of hiring is unable to meetSolutions: Jobs Database, Automated Hiring, Fast Onboarding, Interview Outsourcing, Compliance Management, HRMS
- Growth in Manufacturing & Construction Jobs[Construction Sector expected growth 13% in FY22] but largely informal hiring[97.6% Jobs in Construction are Informal – NSS]Solutions: Blue Collar Platforms with dedicated Verticals for Manufacturing & Construction
- Blue collar workers exhibit high tendency to switch jobs/ high attritionSolutions: Upskilling, Engagement, Productvity Management, Embedded Finance & Insurance – Employee Benefits, Earned Wage Access, Personal Loans
- Enterprises moving jobs from Full time to Outsourced/Part Time/Variable Cost models, changes in preference of select workforce to Part-time/Gigs/WFM modelsSolutions: Gig Jobs Database, Matching Engine, Monitoring & Assurance
- High Unemployment rate around 5%-6% [6.1% FY18, 5.8% FY19, 4.8% FY20, 7.8% Apr’22] and blue-collar work moving from traditional ways of working to intelligent workflows and automation requiring workers to develop digital literacy and develop diverse skill setsSolution: Upskilling Services
- Staffing Platforms like Quess and Team lease needing transformation –Solution: Opportunity to partner in transformation of Staffing business to full stack Blue Collar platform
- High demand for technology jobs requiring hiring at scale but facing supply constraints, high salaries, and attrition.Solutions: Discovery, automated hiring, standardisation and outsourcing of interviews and onboarding, full stack HRMS
Product Market Fit: Transformation in HR for Blue Collar
TAM, SAM & SOM:
Two models were used to estimate the market size.
Method # 1: It is assumed the enterprises will pay as per service; solutions will remain modular.
1. B2B Services: [Job Board/Discovery/Database, Job Posting, Automated Hiring, HRMS]
- TAM: India has ~ 7.5 Cr. enterprises of which 5 lakh enterprises generate an annual turnover of more than ₹ 5 Cr. It is assumed that only these enterprises will have the intent and ability to pay for various B2B services. These 5 lakh enterprises is expected to increase 9 lakh by 2028. Enterprises should atleast pay ₹ 3000 pa for this database, ₹ 500 /Job posting [assumed 1 Job/Recruiter/month] and ₹ 250/Automated Hire [assumed 1 Job/Recruiter/month and 20 positions/Job posted], with annual inflation of 8% pa.
- SAM: Penetration levels will move from 5%, 5%, 10% currently to 10%, 25%, 20% by 2028, for database access / job posting / automated hiring respectively.
- SOM: Assumed equal to SAM as all players seem to be targeting all industries
2. B2C Services: [Upskilling/Skill Development & Training]
- TAM: India has around 45 Cr Blue Collar workers of which 45% are in Agriculture sector. Of the Residual 55%, 30% are self-employed. The residual 70% equal to 17 Cr. Workers have been considered, assuming one worker spends ₹ 200 pa for one course only.
- SAM: Certain skills can be taught effectively only through workshop instead of online video’s [eg: how to handle a specific machinery in a factory]. Also, not all workers would be willing to pay for these courses.
Job Seekers registered on Job Boards will increase from 3 Cr at present to 17 Cr by 2028 @ 33% pa.
Incorporating both factors, we have assumed that only 10% of the 17 Cr would be willing to pay for skilling by 2028 up from 1% at present. - SOM: Assumed equal to SAM as seekers will represent all industries
3. Staffing: Combined Gross Revenue of Quess & Team Lease is ₹ 11569 Cr (FY21). Assumed 50% market share of Quess & Team Lease put together. Net Revenue assumed to be 5%. Formalized workforce assumed to be 20%. Accordingly current TAM and SAM of ₹ 5785 Cr and ₹ 1157 Cr respectively are estimated. Assuming a 10% growth rate for next 7 years, TAM and SAM 2028 of ₹ 11,272 and ₹ 2254 are arrived at, respectively.
Method # 2:
It is assumed Hiring and HRMS as the only 2 buckets that recruiters/enterprises will pay for. Effectively, Hiring replaces Job Board, Job Posting and Automated Hiring and enterprises take a full stack HRMS and pay an annual fee/employee for the same.
1. Hiring: Assumed ₹ 1000 as cost/hire, 100% attrition, formalized hiring going up from 20% to 30%, and hiring via Online Platforms increasing from 25% to 50% by 2028. Accordingly, TAM, SAM, SOM work out to be ₹ 17,000 Cr, 3400 Cr and 850 Cr at present going up to ₹ 52,881 Cr, ₹15, 864 Cr and ₹7932 Cr by 2028 respectively.
2. HRMS: Assumed ₹ 600/employee with inflation of 5% pa. Numbers of workers consistent at 17 Cr. Going upto 38 Cr by 2028, and organised market users going up from 20% to 30%, we arrive at a TAM, SAM/SOM of ₹ 10,200 Cr and 2040 Cr at present going upto ₹ 31,729 Cr and 9519 Cr respectively by 2028.
Top List Companies
- Billion Jobs
- Vahan
- Betterplace
- Bar Raiser
- Apna
- Meraqui
- Smart Staff
- Work India
- WorkEx
- Awign
- GigForce
- Task Mo
- Interview Desk
- Superset – Acquired by ByJu’s