Contact
  • IND Phone Number
    +91 120-4106302
  • US Phone Number
    +1 747-666-8949
  • Posterity Consulting pvt Ltd, 2nd Floor
    F-1, Sector-3, Noida, UP, India, 201301
  • info@posterity.in
  • Article

    Spiraling Offer Renegade - A peak into the ongoing

    Share

    Spiraling Offer Renegade - A peak into the ongoing

    THE RISING OFFER-DECLINE RATIO IN INDIA

    PREFACE

    The entire economy functions in pockets. Some pockets do well, while others struggle. Due to covid or uncertainty in the global economy. Some sectors that are doing well are IT, Technology, or knowledge-based economies and this has given rise to a lot of demand. Now there is a lot of hiring demand, thus the job market is now employee/ candidate-driven. In the candidate-driven job market, the options at employers’ end are reduced.

    As a deterrent and attraction, both ways, the organizations are getting impacted. By means of deterrents, high attrition is proving inevitable while simultaneously attracting talent is proving difficult. And the companies that are not well equipped for the talent race, are preparing for heavy consequences on the business front. The bargaining power of the employer has diminished, while the cost of hiring has skyrocketed. We are trying to share a brief peek and trying to discuss the biggest concern in the market: the offer-decline ratio.

     

    Statistics (2020-2021)

     

     

     

    Contributing Factors:

    The various factors that aid the growth of the decline ratio are listed in the adjacent figure.

     I. Start-Up Funding 

    YourStory reported:

     

    The number of deals raised in H1 2021 (543) was 21.91 percent more than H1 2020 (424). Also, the number of H1 2021 funding deals reached almost 60 percent of the total funding deals (881) seen in the year 2020. According to YourStory Research, on a year on year basis, across the past five consecutive years, the number of deals and amounts raised by Indian startups in H1 2021 was the highest, indicating a sign of positive sentiment in the investor and startup ecosystem

     

    Statista reported:

     

    During the decade from 2011 to 2020, the technology sector in India attracted 805 deals in private equity and venture capital (PE/VC) investments. It was followed by the e-commerce sector with 738 deals. Together, technology and e-commerce accounted for nearly half of all PE/VC deals during this period. 

    An Overview of sector-wise number of deals is exhibited in the adjacent diagram.

     

    II. Set up/ Expansion of GICs in India

     

    Nasscom reported:

     

    India is near-synonym to GCCs and is continuing to lead as a preferred GCC destination globally, owing to a unique ecosystem (academia, start-ups, service providers, industry bodies, and Government) it offers abundance of talent, Tier-I & Tier-II city infrastructure, and government support.

     

    III. Increased Digitalization, Automation- more mobile-driven, data-driven work.

    IBM reported:

    Digital transformation is really all about leveraging technologies to re-invent and improve your business. We know technology is now a core strategic foundation for most enterprises and can be a key determinant of organizational survival and success. So, we asked ourselves how much of this is proving to be true during the pandemic. Which technologies make a difference between high-performing and struggling businesses in this extraordinary period of crisis and change? 

    The technologies making the greatest impact on revenues have shifted dramatically during the pandemic.

     

    IBM reported:

    Digital transformation is really all about leveraging technologies to re-invent and improve your business. We know technology is now a core strategic foundation for most enterprises and can be a key determinant of organizational survival and success. So, we asked ourselves how much of this is proving to be true during the pandemic. Which technologies make a difference between high-performing and struggling businesses in this extraordinary period of crisis and change?

    The technologies making the greatest impact on revenues have shifted dramatically during the pandemic.

     

    V. Double-Digit IT Outsourcing Consulting Growth

    Indian Brand Equity Foundation reported double-digit growth in terms of export revenue FY19.

     

    The market size for the Indian IT industry has also grown tremendously, which acts as a contributing factor as the availability in job markets.

    VI. Govt Initiatives aiding StartUps

     

    India is gradually on its mission to build a robust startup ecosystem. In order to promote and support entrepreneurs, the government has created a ministry (department) dedicated to helping new businesses. Furthermore, the Central Government of India has also introduced many schemes to bolster entrepreneurship in India and to assist emerging startups financially.

     

    Start Up India, Stand Up India are initiatives aimed at aiding startups.

     

     

    Visibility

    The visibility of the Increased Decline ratio, we predict, will remain for the upcoming 2-3 years in the industry. The effect of the Decline Ratio might get swept up as the after-effects of COVID. A strong indicator would be the PF number. But the question you must ask yourself is this- Are these bubble effects, or are they sustainable?

     

    IMPACT OF THE HIGHER DECLINE RATIO

    While the cost would depend on a lot of factors for every organization, pertinent to scale, domain, industry, target clients, etc., the prevalent negative Impact can be identified as the following:

     A. Eroding Cost Advantage

    B. Increasing Frustration of Global HQs/ Investors- As companies are not able to ramp up or scale at the pace they had originally envisioned.

    C. Depleting work Ethics in WFH and younger workforce.

    D. Survival Risk

    E. Hiring cost (Direct and Indirect)

     

     

    SOLUTIONS

    Before listing solutions, we need to understand the classification of the factors that raise the problems listed in the previous section:

    A. Variable or Constant Factors

    B. Controllable or Uncontrollable Factors

     

    As part of the solution model, it also becomes important to outline the hierarchy of solution and implementation plan:

     

    A. Macro Level- At Organization Level (Employer Branding, People, Gross Talent Attraction Power aka GTAP- Culture, Awareness, Norms, Autonomy, Brand Positioning). These are all Macro and long-term.

    B. Strategy- Department Level (Process can be fixed, Candidate Experience, Candidate Engagement, Enhancement, Continuous sensitization of hiring managers, Continuous negotiation with relevant stakeholders, keeping the current ecosystem in mind). There is a lack of active negotiation and communication in the recruitment process between leadership and grassroots level.

    C. Tactical Level- Implementation level (Work on the ratios, Improve Hiring Funnels, Identifying- Developing- Engaging- Retaining the right partners, Improving recruiting operational plans)

     

     

    Thought for Leadership 

    GIC Leaders,

     

    Cost is not the only factor. Global HQs are looking for rapid growth, sustainability, and positive news on the talent front. Saving 5-10% of cost here and there should not be on the agenda, as the difference between Indian Cost and West Cost is too high, they will not be impressed with minimal cost savings.

    The global stakeholders might rather lose confidence in India due to talent crunch, and thus will be happy to spend extra on talent for sustainability and growth.

     

     

     

     

    Get jobs in your inbox.