Small and medium sized enterprises have started realising the importance of human resources management and retention of right talent for their growth. Companies with employee strength from 20 to 200 are now relegating such activities to specialised companies.

“Though HR has not been a priority for SMEs for long, these companies are now understanding the need to retain the right talent. Moreover, emergence of smaller HR companies which fit their bill also is making them look at outsourcing as a more viable option,” said Narayan Krishnaswamy, co-founder and CEO of Talking Heads, an HR outsourcing company.

“HR outsourcing among SMEs is still at its infancy, but a high growth is expected in the segment,” he said.

According to Prashant Bhaskar, CEO and founder of Plug HR, of the around 15 million SMEs in India at least one million in and around metro cities want to have a HR management system in their company, but are reluctant to bear the functional overheads. The market could be as large as $30 million a year.

Plug HR works with around 45 companies of which 70 per cent are SMEs. “For a company with 100 people, maintaining an HR team costs Rs 30 to 35 lakh annually, whereas for SMEs we charge Rs 17 lakh. Our smallest model costs Rs 6 lakh and the service delivery can also be broken into parts as per the requirements of the company,” he said.

“We offer all services under HR, but for a smaller company the effort will be less,” Bhaskar said.

Source: My digital