In this Q&A session, we dive into the fascinating world of staffing and recruitment in India and its intersection with technology. Join us as we engage in a conversation between Krishna Khandelwal, Founder & CEO at Hunar.AI and Mr. Jaydev Sanghavi, Executive Director of Aarvi Encon, where we explore how Aarvi Encon is tackling challenges in the staffing industry and creating differentiation in its business offering. Let's delve into Mr. Sanghavi's insights and learn about the exciting developments in this evolving field.
Krishna : Thank you for your time and for agreeing to discuss various topics related to the staffing and recruitment industry with us. First of all, congratulations on the remarkable 20%+ CAGR Growth in your share price since your IPO in 2017. We want to start by asking:
What is the business of Aarvi Encon?
Mr. Jaydev : Aarvi Encon helps companies in the Energy sector across the globe to execute multi-million dollar projects by deploying the right talent. Aarvi Encon, established in 1987, is a leading Technical staffing and recruitment business in India. With over three decades of experience, Aarvi Encon has become synonymous with delivering high-quality talent to various industries, including oil and gas, power, infrastructure, EPC and manufacturing. As a company committed to excellence, we offer comprehensive staffing solutions that cater to the unique needs of its clients. We provide a wide range of services, including contract staffing, permanent recruitment, and project management.
Krishna: Thank you for sharing about your business. I am sure the industry has evolved a lot since your inception, but particularly over the last five years, what has become the biggest differentiation for staffing businesses in India?
Mr. Jaydev: Certainly, the staffing industry in India has experienced notable transformations in recent years, primarily driven by the nation's growth and development. The most prominent challenge in the industry has been the growing skill deficiency among candidates. While our clients' requirements have become increasingly refined and technical, the talent pool has struggled to keep up with these demands. Consequently, the ability to deliver highly relevant candidates to our clients within the shortest turnaround time has emerged as a crucial aspect that sets staffing businesses apart.
Considering the technical nature of our client's operations, candidates with at least 1-2 years of experience are typically sought after. Furthermore, a significant proportion of candidates in this industry are passive job seekers, necessitating a more in-depth engagement approach. Moreover, the COVID-19 pandemic has impacted the availability of fresh talent in the 1-2 years experience range, underscoring the importance of historical candidate data utilisation and amortisation. In response to these challenges, our organisation has taken a proactive stance, leveraging AI-powered resume parsing solutions, Text Based Recruitment Techniques and Recruitment Marketing Automation to establish a robust candidate pool, distinguishing ourselves as one of the leading staffing businesses in the country.
Krishna: We are intrigued to learn about your utilisation of AI techniques for differentiation in your recruitment process. But before we go over there, we're interested in understanding the gravity of the growing skill deficiency in the workforce. Could you provide insights into the severity of this challenge for the industry?
Mr. Jaydev: Absolutely. Rather than solely relying on statistics, I would like to highlight some industry trends that reflect the impact of growing skill deficiency in the workforce.
Over the past few years, there has been a significant increase in the number of candidates processed for each open job position. This surge in applicant volume indicates the challenges faced in identifying the most suitable candidates. Despite technologies like Resume Parsing being out there in abundance, there has been a lack of good and genuine job-matching algorithms and smart recruitment automation such as intelligent chatbots.
Job descriptions have become increasingly specific, making the process of matching candidates to job requirements more arduous and time-consuming.
Industry-wide recruiters are experiencing a decline in their throughput, measured by the number of candidates they can select per month. This decline can be attributed to increasing difficulty in finding relevant candidates for jobs and the lack of automation in the industry in recruitment processes.
The cost of accessing candidate data through job boards and other channels has witnessed an upward trajectory, contributing to the rising recruitment costs for staffing businesses. The industry, grappling with the growing skill deficiency, has been grappling with year-on-year increases in recruitment expenses.
Krishna: Technology can play a significant role in addressing these challenges. However, before we delve into that, could you explain the cost implications of these challenges on your business?
Mr. Jaydev: Certainly. While I cannot provide specific figures, it is important to acknowledge that recruitment costs significantly contribute to the overall expenses of staffing businesses. The increasing cost of recruitment is a significant concern for the industry as a whole.
Krishna: Thank you for laying down the perspective for the overall industry. I am now super excited to know how Aarvi Encon tackles these challenges differently than others in the industry?
Mr. Jaydev: We are a technology-driven leader in the staffing and recruitment industry, dedicated to solving the challenges of candidate relevance and turnaround time. Leveraging advanced technologies, we provide unparalleled solutions that deliver efficient and effective staffing outcomes.
One key aspect of our technological approach is the implementation of Language Learning Models driven software vs traditional resume parsing solutions. This powerful tool with a job matching algorithm enables our recruiters to rapidly and accurately match candidates to job positions, ensuring higher relevancy in the selection process. Through which we dive into our bank of over a 1mn+resumes and optimise the talent pool we already are in touch with at an arm's length is one of our strong suits since it helps cut down our TAT for each hire.
But our technology adoption goes beyond traditional recruitment methods. We analyse vast amounts of candidate data through data analytics and artificial intelligence to identify patterns, skills, and experiences that align with specific job requirements. This intelligent approach allows us to quickly pinpoint the most suitable candidates from a pool of applicants and present them to clients, ensuring a higher success rate in finding the right talent.
Moreover, our technology-driven solutions offer a seamless and personalised candidate experience. Text-Based Recruitment Automation on Whats App facilitates efficient engagement; intelligent recruitment chatbots provide candidates with timely updates on job opportunities and streamline the information-gathering process. Building stronger connections with candidates ensures a smooth and expedited recruitment lifecycle.
We have built a robust digital infrastructure in the form of recruitment CRM that prioritises securing and efficiently managing candidate data. Our commitment to technology sets us apart in the industry and delivers staffing solutions that meet the evolving needs of our clients.
Krishna: It's fascinating that you use some of the world's most advanced technologies in your business. Along similar lines, I recently wrote a blog on "End of Resume Parsing and Candidate Matching as we know it today". The usage of advanced technologies such as recruitment marketing automation and LLM-powered resume parsing, I am sure, requires a very forward-looking thought process and investments ahead of its time.
Mr. Jaydev: We are committed to leveraging advanced technologies in our business to drive operational efficiency and deliver greater value to our customers. Our forward-looking thought process enables us to anticipate industry challenges and invest in innovative solutions. By exploring new technologies, like language learning models and smart recruitment automation, we can offer faster and more accurate candidates to job matching, benefiting our clients. Our investments in technology streamline our operations, optimise resource allocation, and improve cost efficiencies. Focusing on being ahead of the curve, we unlock value for our clients and stay competitive in the staffing and recruitment industry.
Krishna: Mr. Jaydev, this was a thought-provoking and insightful discussion. Thank you for sharing the industry trends and how Aarvi Encon uses technology to adapt to the change. Thank you, sir, for your time today.
Mr. Jaydev: Thank you, Krishna, for having me and for your intriguing questions. I thoroughly enjoyed it, and all the best.