Something’s phishy – Wakeup Call for Recruiters !

One of the leading lawyers of India, Diljeet Titus, has analysed, in the Economic Times, the landmark judgment in the case of National Association of Software and Service Companies vs Ajay Sood & Others, delivered in March, ‘05, wherein the Delhi High Court declared `phishing’ on the internet to be an illegal act, entailing an injunction and recovery of damages. The case involved a placement agency involved in head-hunting and recruitment.

Without reproducing the whole article, the operative part that is most relevant to our profession is given hereunder. Sourcing being and integral part of our profession, I would request comments from all as to what they are doing to adhere to such norms and what we could do, as a profession, to incorporate certain self-regulatory norms so that we do not end up like the telemarketing companies – who are now being regulated excessively the worldover.

The Delhi HC stated that even though there is no specific legislation in India to penalise phishing, it held phishing to be an illegal act by defining it under Indian law as “a misrepresentation made in the course of trade leading to confusion as to the source and origin of the e-mail causing immense harm not only to the consumer but even the person whose name, identity or password is misused.” The court held the act of phishing as passing off and tarnishing the plaintiff’s image. The plaintiff in this case was the National Association of Software and Service Companies (Nasscom), India’s premier software association.

The defendants were operating a placement agency involved in head-hunting and recruitment. In order to obtain personal data, which they could use for purposes of head-hunting, the defendants composed and sent e-mails to third parties in the name of Nasscom.

The high court recognised the trademark rights of the plaintiff and passed an ex-parte ad interim injunction restraining the defendants from using the trade name or any other name deceptively similar to Nasscom. The court further restrained the defendants from holding themselves out as being associates or a part of Nasscom According to the terms of compromise, the defendants agreed to pay a sum of Rs1.6 million to the plaintiff as damages for violation of the plaintiff’s trademark rights. The court also ordered the hard disks seized from the defendants’ premises to be handed over to the plaintiff who would be the owner of the hard disks.

This case achieves clear milestones: It brings the act of “phishing” into the ambit of Indian laws even in the absence of specific legislation; It clears the misconception that there is no “damages culture” in India for violation of IP rights; This case reaffirms IP owners’ faith in the Indian judicial system’s ability and willingness to protect intangible property rights and send a strong message to IP owners where they can do business in India without sacrificing their IP rights

Skyrocketing Salaries – Good times ahead !

Yesterday I was speaking to someone and found that he had missed this issue of Business Today which I feel all of us definitely need to go through as it has a number of great nuggets wrt our profession as well as the Industry at large. One thing is for sure, we cannot complain of inflation as it gets adequately taken care of when we get paid our fee on a percentage basis (specially on enhanced remuneration numbers !)

Other than talking in detail about some of the High Growth Sectors such as Aviation, Financial Services, Engineering/Manufacturing, IT-Enabled Services, IT Services, Pharmaceuticals, Real Estate, Retail, Telecom it also goes on to list the skill sets which are in demand and says that the professionals, with those skill sets, are commanding a premium as there are not enough of them there to meet the demand.

Indeed, execs at headhunting companies (some insist they be called HR consultants focussed on recruitment; others are happy with the more prosaic search firms) rattle off a list of executives who have recently moved jobs and the impressive salaries at which they have moved. R.S. Prasad moved from Dr Reddy's to head Chennai-based Orchid Chemicals and Pharmaceutical's formulations business at a salary of Rs 1.5 crore a year; Lloyd Mathias left Pepsi where (page 53) he was Executive Vice President (Marketing), to head the marketing function at Motorola India at a salary significantly higher than the Rs 50-60 lakh-a-year he was earning at the beverages major; Sanjay Viswanathan moved from igate (he was head of Europe) to GECIS as Managing Director, Europe, at a salary of $300,000 (Rs 1.32 crore); and Padma Ravichander signed on as head of Perot Systems India (from Oracle) at a salary of $325,000 (Rs 1.43 crore). "Indian salaries, especially for senior managers, is fast racing towards the $250,000 (Rs 1.1 crore) mark," says Venkatesh Shastry, Associate Director, Stanton Chase, a headhunting firm. "This is comparable to the compensation in the us for middle-to-senior-level positions." The Indian salaryman has arrived.

It's celebration time for salaried professionals with salaries nudging the magical Rs 1-crore-a-year mark. The good news - things can only get better.

Where is Online Recruitment headed ?

eBay Google Look to Lists

Here is an interesting article from Red Herring. Although it talks about eBay too, however, the moot question is - Where is the Online Recruitment business headed ? It would be interesting to see what would be the impact on online Portals such as monster, dice, hotjobs, naukri etc.

As revenue growth slows in other areas, big Internet companies take a lesson in success from sites like Craigslist. Internet companies have woken up to the fact that listings may be theroute to a larger audience and fatter profits.

While eBay has alreadywet its feet, Red Herring has learned from sources close to Google that the search giant plans to get into listings as early as next month.

Online and print classifieds make up a $100-billion global industry,according to estimates from Classifieds Intelligence, an interactiveadvertising consulting and research firm. It's a market thelarger search and e-commerce giants could easily tap.

"All these companies are trying to create new communities ofpeople who didn't advertise before," said Jim Townsend,editorial director at Classifieds Intelligence."You can argue `these are free,' butmost of them have schemes for up-selling to advertisers."

For Google, listings would be a natural progression, as it has single-handedly transformed online advertising into an integral part ofmarketing campaigns for small- and medium-sized businesses.Regardless of what kinds of listings it gets into, it would beanother stream of revenue. Google declined to comment on its plans.

Many newspapers have begun to offer certain categories of onlineadvertisements for free, in an attempt to draw the audience thatfound newspaper classifieds too expensive in the past (see TechSpin:Papers Fight Google).

Many Internet companies, hampered by a deceleration in revenuegrowth, are betting on listings, too. eBay, for one, has zeroed in onlistings as a new source of revenue to combat its slowing growth overthe past year.

eBay made its most aggressive foray last week when it boughtShopping.com for $620 million. But it had stepped into the field in2004 when it dished out $415 million for Rent.com and also took a 25percent stake in locally focused listings site Craiglist.org.

eBay also bought Dutch classifieds web site Marketplaats.nl for $290million and German vehicles listings site Mobile.de for $149 million.

In March, eBay launched Kijiji.com, a group of web sites carryingclassified listings across more than 90 cities outside the UnitedStates. It's a concept similar to Craigslist, but implementedabroad. Kijiji expanded last month, too, through its purchases ofclassifiedweb sites Gumtree.com and Loquo.com.When it announced its acquisition of Shopping.com, the online auctionhouse said it wanted to reach a wider audience. Shopping.com had 22.6million unique visitors in April, according to comScore Media Metrix.That might be a small number when compared to eBay's 63.8 millionin the same time frame, but it's a number that reflects anincrease of 15 percent over the past year, compared with eBay's6 percent.

When it announced its acquisition of Shopping.com, the online auctionhouse said it wanted to reach a wider audience. Shopping.com had 22.6million unique visitors in April, according to comScore Media Metrix.That might be a small number when compared to eBay's 63.8 millionin the same time frame, but it's a number that reflects anincrease of 15 percent over the past year, compared with eBay's6 percent.

Jobless Growth in todays Globalised World

Commenting on “Jobless Growth” The Finance Minister, Mr P Chidambaram, had this to say in his Budget Speech this year.

“In the last Budget, I had rejected the idea of jobless growth. As I unfold the vision of the UPA Government, Hon’ble Members will note that the central theme that runs through the various schemes and programmes is creation of jobs. Assured irrigation facilities to an additional 1 crore hectares of land over a period of five years will generate employment for an additional 1 crore people at the rate 1 person per hectare. The food processing industry is growing at a rate which generates 2.5 lakh jobs every year. The textile sector alone has the potential to create 1.2 crore jobs over the next 5 years. The information technology (IT) industry is expected to offer an additional 70 lakh jobs by 2009. Construction industry is also expected to throw up lakhs of jobs. Sectors with potential for generating employment will receive the highest attention of the Government.” This is what is called “reform with a human face”.

It is all very well to reject the idea of jobless growth, however, the ground realities need to be factored in. As per news reports, Mr Juan Somavia, director-general, International Labour Organisation (ILO), has said that the growing gap between wealth generation and job creation is becoming a serious threat to international security, development and democracy and needs to be addressed urgently. Further, the ILO chief said at the ILO’s 93rd International Labour Conference “This global jobs crisis is the most pressing political issue of our time,”. Illustrating the contrast between a healthy global growth rate of 5 pct and a disappointing expansion in employment of only 1.7 pct in 2004, Mr Somavia said, “World output increased by nearly $4 trillion, yet global unemployment was reduced by only 500,000.” The imbalance between globalisation and growth and job creation was illustrated by the fact that about 1.4 billion people are unemployed or considered working poor, with almost half the world’s labour force living on less than $2 per day.

In todays increasingly globalised world job growth is very much dependent upon external factors within each sector and cannot just be controlled by launching schemes within the national borders.

In the face of such challenges can India’s political and bureaucratic establishment rise up to the occasion and come up with innovative policies for the upliftment of the working class. We have to wait and see.

Strategic Alliances Part II

Strategies for the Small...

Having said this, the salvation of those third-party call centers that do not have sufficient working capital, lies in:

• Getting over the mindset of waiting for inbound support work and immediately taking on outbound telemarketing work for which there is no shortage. Essentially, they need to ensure that they keep the right kind of sales staff with good communications skills so as to achieve a reasonable sales per hour (SPH). This will make the center viable, or
• Entering into a build, operate, transfer (BOT) contract with a foreign customer so that they can transfer the whole unit to the outsourcing party after the completion of a pre-defined period, say in two to three years. Thereafter, the learnings from the BOT can be used to set up another venture.

... And for the Big

In case the call center firm has deep pockets, it can:

• Set up a marketing office in the US and start working on customer acquisition—this can be a long and strenuous process and cost a tidy sum
• Make a strategic investment in a call center outsourcing or service bureau in the US/UK so as to acquire the latter’s customers and migrate the processes offshore. This too can take time and considerable amount of financial resources
• Embark upon a plan to enter into a strategic alliance, maybe even a joint venture, with some outsourcing provider or end-user client in the US or Europe which helps them gain the customer relationships of the foreign partner as well as its knowledge of successful management and delivery of processes.

On a consulting assignment in the US and Europe, and met a number of companies there in the SME sector. There is tremendous immediate interest in the US in offshore outsourcing, and although Europe is a bit slow on offtake, there too is an active interest in exploring the possibility of going offshore with support services. In sum and substance, due to the enticing value proposition, the business opportunity is very much there and it’s just a matter of adopting the right strategy to tap it.

All in the Alliance

Before we go any further it is important to understand what a ‘strategic alliance’ is.

Strategic is something that ties up with the strategic plan/vision, and is relatively long-term—focusing on long-term goals and justifying a commitment of resources. Strategic also means that it’s not tactical in intent.

Alliance constitutes an interdependent activity with an emphasis on cooperation and collaboration that requires resource commitments from more than one company and often requires continuing parent/owner support.

A strategic alliance can take various shapes—it may or may not entail equity investments, and may or may not maintain independence, multi-product/service, or a full life cycle.

An increasing number of global organizations are finding that a strategic alliance is a fast and flexible way of accessing complementary resources and skills that reside in other companies and an organization’s ability to enter into and effectively manage strategic alliances can provide a sustainable competitive advantage to it.

For a successful alliance it is very important to ensure that the top management acts as the champion and has full commitment to the alliance. But before that, it should be committed to the process and allocate the time required to enter into a successful relationship. It should show the ability to internally communicate the mission/rationale for the alliance, have the ability to obtain, and later ensure, the continued maintenance of the internal team’s commitment, and last but not the least, stay closely involved with the post-closing implementation stages.

Although a detailed roadmap for structuring an alliance is beyond the scope of this article, it is important that a well laid-out process is followed. It all starts with, first, getting internal approval from the owners/top management/stakeholders and conducting a due diligence for the possible conflicts and overlaps. After identifying the probable alliance partner, it is important to check upon its track record, the tenure of its existence, and its financial health over the period of existence so as to be assured of its stability. Initially, it is also better to establish the partner’s exact fit and determine whether it would complement the activities of the call center and help gain a foothold in both onsite and offshore spaces. One also needs to identify areas of conflict and competition as these could even lead to a collapse of the alliance later. Finally, it is very important to ensure that the alliance is equally important and strategic for the alliance partner as well, or else all the efforts will go waste.

For a successful negotiation it is critical that extensive meetings are held internally to identify major issues in advance, establish achievable targets, prepare business openings and even identify the deal breakers.

Once an alliance is in place, it is important to manage the same and ensure that all tasks have owners and deadlines, that the team takes out the time and allocates enough time to focus on overseeing the alliance. Even though alliances cannot be said to be risk-free, if managed well, they offer a very good option to other expensive, time consuming and less efficient options. Today, ‘alliance management’ is increasingly being considered as a ‘competency’ and can deliver rich rewards for an organization that effectively leverages the same.

Recruitment Firms - limited only by their Vision and Resources

Looking at today's robust economic environment and the fact that the real action, on the economic front, over the next few decades is going to be in the Asia Pacific region, I believe that the Recruitment Outsourcing business is headed for good growth and the winners will be the ones who have the vision and the resources to implement the same.

Janaki Krishnan writes in the Business Standard that even as India emerges as a hub for critical talent, not only in software but also other sectors, recruitment and placement agencies are gearing up to meet this challenge. In the recruitment space, managed services is seen as the next big wave.

Managed services essentially refer to recruitment process outsourcing, where companies will be outsourcing their entire process recruitment which will essentially be a mix of on-site recruitment, temp staffing and managed services.

Tarun Bali, managing director of ABC Consultants, among the largest placement agencies in the country, is extremely bullish about the recruitment scene in India.

“With the economic environment so robust, the recruitment industry will grow even faster.” He however cautioned that the only impediments to growth would be in the quality and volume of recruiters.

Job seekers can take heart from the fact that compensation levels will approach client standards.

Clients themselves will go back to working with a few partners which means that recruitment and placement firms will have to increase their delivery capability. “Only these kinds of firms will grow,” Bali said.

At present, delivery is a big issue with clients. Working with multiple partners - as many as 30 in some cases - client organisations are forced into this situation owing to lack of concern for quality, time lines and weak candidate management by recruitment partners.

There is shortage of quality recruiters which is still not considered an attractive industry to work in.

Industry watchers said that another turned which would emerge is that recruitment firms will have to tap into emerging employment sectors such as retail, Information Technology and IT enables services.

Bali estimates that retail is expecting 20 lakh new jobs in six years. While in the case of IT and related sectors there will be gaps in specific areas.

“Therefore recruiting partners need to work with the industry in identifying potential sources and partner with them in training and workforce management,” Bali said.

Multinational recruitment agencies are already in India and the result of this is that staffing will approach western standards in three years, while level of employees “deputed” to employers will move up, more and more senior executives will begin to work “flexi”.

“Recruiting firms in India will have greater opportunity of working with clients overseas in their quest for Indian talent, as India becomes hub for critical talent,” said Bali.

For niche segments such as biotech, animation, IT product development, research and development in auto sectors there is not enough talent available in India.

Here the recruiting challenge will be the ability to attract critical talent from overseas. Thus both client brand and recruitment firm brand will determine who will get the talent first. This will require firms to work on building their employer brand.

The challenge will be to tap talent in B and C class towns especially for sectors like retail, insurance, call centers and so on.

Bali pointed out that recruitment agencies will be limited only by their own vision and resources. “This is the time to think Big,” he said.