Hi Everyone,

I'm Bhargav Seeram, from Hyderabad, currently working as a Manager in my dads company. I would like to start a HR Consultancy/Services company, I have no knowledge about anything except for few concepts learned during my MBA II SEM. I feel there is a need here in our Industry Estate to maintain a record and database of employees who are looking for Jobs in SME and wanted to match the right profile candidate with the right job. Till now the recruitment was only employee and other referral based. I want to tie up with institutes like CITD and others who provide Tool Design and CNC Training and thus can provide them placement services offering the people to the companies. My idea is for further advance by registering every person working here in the companies and monitoring their performance and maintain a database. I can see a very high attrition rate in these companies and also there are no dedicated workers in every industry and many companies do have vacancies which are not being filled.

I want your suggestions and comments and other legal and technical help. Any thoughts please post in.

Thank You all

From India, Mumbai

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Hi Bhargav

Its nice to see entrepreneurs coming in the SME segment.

Please take note of the following points which might be of some help to you:

1. This is one of the disorganised sectors as far as recruitments are concerned. One major problem here in this field is, from outside everyone feels it is disorganised and there is scope of good business here. When you enter into it, the first thing you would realise is that the companies are not willing to go for consultancies for recruitment as they have to pay consultation fee. Rather they are happy to advertise in DC paper.

2.Getting linked to some government training agencies like CITD,NSIC,ALEAP might be of some help.

3. Another issue here is, the employees are also not stable here. One day you find them in one company and when another company is offering them more salary they would immediately jump even if they are one month old in the present company. While signing a HR recruitment contract with a company you will have to agree to replace a new candidate free of cost if your sourced employee leaves within three months. This headache is very much in this sector.

4. Having said all these things, at the outset i am not discouraging you. Please be very careful and patient in every step you take. Afterall everyone wants to be successful in business. I wish you all the best .

Regards, Alex Praveen

From India, Secunderabad
Thank You Alex Sir,
I am current running a Machining Shop where I 'm confronting the issues what you've addressed. Taking these things into mind I wanted to pool all the candidates and thus help these SME's who employ them.
One more question is, Can I make them sign a 1yr contract for work if I guarantee them work? Can it be done? Will it be a success?? I'm thinking of something like contract in which they have to pay the consultancy if they left the job within 6months or 1yr. Also I'm thinking to do this business having workers as lifetime members, like to start a HR Sourcing company which provides HR solutions where I ll pay the salary but they ll be working at the client side?? Will this work?? Or am I thinking too much???

From India, Mumbai
As mentioned by Mr. Alex,this is a unorganized sector and great care needs to be taken to handle employees in this area.Also As the trend goes,every employer(Client) asks reliable employees at comparatively Low Cost in turn employees have to work on edge of basic minimum salary thus giving rise to high attrition and Poor quality in services.I suggest you to really have the good survey of the industry and also legal implications attached to this industry.I appreciate your efforts to start up this business,but be sure to nurture your employees and try to understand them from bottom line and their needs. Your employees will be your most valuable assets to leverage your business.
You will be successful.Wish you all the very good luck.

From India, Vadodara
Hi Bhargav,

1. Pooling of workers is not an easy task at all.

2. You are into business, so lets avoid the term helping SME's.

3.I sincerely suggest not to enter into any kind of contracts with the workers with the clause gauranteed work for one year. Incase if you are unable to show them any work they will demand that you pay. You need to start paying them from your pocket. Thats not business.

4. Please dont expect that the workers would pay you anything if they leave within whatever time frame you agree upon. These workers are low income people and you cant expect them to pay and they will not be in a position to pay you.

5.Starting a HR company is a good idea. i didnt understand what exactly you meant by lifetime members.

Before starting anything i would like to suggest a few things, lets be practical

1. Start a small project work(time bound). Try to meet as many SME's as possible. Visit them at their factories/workshops,etc. Try to understand what is their need for workers and how they are sourcing them. Find out the difficulties being faced by the management in sourcing the workers. Know the retention level.

2. In every factory you go, meet the workers also. Try to understand their issues. Prepare a proper questionnaire so that in one visit itself you can note down details from both management and workers point of view.

3. try to collect the direct contact details of the management person who is entrusted with the recruitments. Note down contact details of the president/secretary of workers union of every organisation you visit.

4.Analyse carefully, discuss with people who can make suggestions and at the same time criticise .

5. By the time you finish this small but very important project work, i am sure you will be the best judge to decide to go for it or not. This project work will definitely be of great help to you in the future also as you will understand how to see things practically. Once you go to the field directly, you will have first hand information all for yourself. Do not send someone else on your behave to do this work.

6.If possible try to work as a freelancer to any company and try to source candidates. You will understand the difficulties.




From India, Secunderabad
If you want a start a business of your own, you need to think this through very carefully.

First do your research, and verify beyond doubt that an opportunity exists. Put together a very comprehensive business plan detailing every aspect of the business, and how you are going to make it work, AND be different to other similar businesses.

I have mentioned on CiteHR before that it seems like every man and his dog in India wants to start a HR Consultancy business. The economy can only sustain a certain number of these types of businesses.

Secondly, do a SWOT analysis, both on your skills and experience to run such a business, AND all the other similar businesses within a 100 mile radius of you, because that is your competition.

Thirdly, have you got enough money saved to cover all your expenses for both the business and to live and eat for at least 12 months? Your business will not make profits for at least 12 months, and your establishment and marketing costs will eat up your capital.

I am not trying to talk you out of it, BUT I am trying to make you understand that this will not be easy. I read so many postings here on CiteHR about members who have rushed into starting a business, and are now desperate because the work isn't there, or they cannot get clients etc. I suspect many do not have a business plan, and did not think it through beforehand.

Think very carefully before you give up the financial security of the job you have.

From Australia, Melbourne

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