Recruitments dry up, HR firms in trouble

With the slowdown, the companies hit most are the recruitment consultants. Their revenue model relies on receiving a percentage of salary of candidates placed. With lesser number of placements, recruitment consultants and job portals are severely hit.

Recruiters are reporting that there are more aggressive mailers from job portals such as monsterindia.com for taking their services. Monster India has come up with a special package at over 33% off regular pricing.

The leading recruitment company, Naukri.com had its profit after tax growing at just 0.75% as compared to FY 07-08 (QoQ) in its financial results announced today. With the leading player feeling the heat, others are not far behind.

Yellojobs.com has apparently closed down its operations. The site has not been updated for a long time. Rumour is that the staff was not paid for several months. Yellojobs.com fell to 13,92,031 in last week of Alexa rankings from an average of 94,134 in the last three months.

Parul S, who runs a recruitment consulting in Indore, said "Recruitments have slowed down especially in the financial sector. There seems to be no good news off-late."

Smaller players are also not safe from the current slowdown. A vendor has informed that Careernet (www.careernet.co.in) has been evading calls for payments due in the last financial year. Like Yellojobs.com, Careernet's website fell in Alexa Rankings to 12,86,622 this week from an average of 5,00,000 for several months.

With the growing slowdown, HR firms seriously need to take urgent steps to revitalise their business.