The Indian startup scene is an exciting phase with entrepreneurship at its zenith. In addition to several government initiatives to promote entrepreneurship, venture capitalists sank $4 Bn into India in 2014 in some 300 deals—almost twice as much money as they invested in 2013 and 14 times the level of a decade ago, according to Indian data tracker, Venture Intelligence. Many a times, entrepreneurs rush to seek funding without having a strong grip on their own business or on investor’s needs or criteria.
Given such a scenario wherein India Inc. is looking forward to organized staffing and workforce solutions to reach its various business goals, the HR solution companies have witnessed considerable evolution with niche, customized, and innovative products and systems with increased focus on technological interventions for staffing, recruitment, and other HR shared services.
Recruitment process outsourcing (RPO) and other HR shared services (HRSS) have caught up in recent times with growth in dedicated technology oriented solutions. HR technology and other services like payroll, training and development, verification, social recruiting, background verification, onboarding, training and induction, leave management, attendance management, reimbursements applications and referral hiring etc. are the buzzword in the HR space. Besides, focusing on core services and key talent areas, HR solution industry is increasingly initiating strategic initiatives, such as wellness programs and workforce analytics.
With a focus on continual improvement of the HR function, organizations have achieved lower turnaround, higher employee engagement, and more productivity, thereby benefiting from better business outcomes. These services are generally outsourced with competent HR solution companies working on cloud-based solutions and complaint systems in place for the security of vital data.
Having seen the need for growth of the HR space, an increased number of investors are finding it lucrative to invest in growth-oriented HR companies with niche product and service areas. The size of this space is expected to be upwards of INR 300 billion in FY14-FY15. There is increasing community of start-ups within the industry that is developing products and solutions that enhance HR processes and release the bandwidth of HR team within the organizations so that it could focus on more strategic aspects and align with business goals.
A good investable idea in the HR space can be assessed on 3 major things to begin with. If these things are in place the business will become attractive for any investor in the HR space: