Weekly Startup Profiles > TeamLease Staffing Solutions
|They hire someone every four minutes - weekends included. In fact, in only four years, they have built TeamLease to the second largest private employer in India.|
A staffing solutions company that hires people for temporary jobs and rents them out for a mark-up.
"Entrepreneurship is the art of staying alive till you succeed" - a mantra Manish Sabharwal swears by, and not without reason. It brought in a win for Manish's first company India Life, which in turn gave rise to his second venture, TeamLease, an organization that offers staffing solutions to companies.
India Life, the first company, initially started as an insurance company but later expanded to pension management, and finally morphed into an HR outsourcing company. It was while they were providing support to HR teams, that Manish observed his customers struggling to hire good people. And he saw, over time, that their problems were getting worse, not better.
"To us, locking in on the idea of TeamLease was more like a sunrise than a light going on. We had several conversations, we did a ton of reading, and then it all came together," Manish recalls. So after the founders sold India Life and had fulfilled the transitional obligations, they returned to the starting line to build TeamLease.
Manish realized that India was coming of age as a market - more Indians were ready and able to consume. And as companies positioned themselves to feed the exploding demand, they needed to ramp up their sales footprint and required nation-wide staffing.
Meanwhile, a change in work patterns was resulting in more projects: work that came with a fixed start and end date. Companies needed more and more highly skilled employees for these temporary assignments.
Filling these assignments was not easy, Manish realized. HR managers of any size companies dealt with the pressure to hire quickly across multiple locations; they worried about quality, as in how to make sure that employees were filtered well. If they were using a small staffing company to help them, they worried about compliance, like whether Provident Fund payments were being made; and about exploitation, for example whether employees were getting their salaries.
With TeamLease, Manish and his co-founders brought in novel concepts to address these issues.
TeamLease engages candidates on temporary jobs and then rents them out for a mark-up to companies. From the start, TeamLease built a national presence to recruit employable workforce from Tier I, II and III cities across the country. It invested heavily in infrastructure to facilitate scaleability, and also provided several of its services online, making it more accessible to customers and candidates alike.
For its employees, those on temporary assignments through TeamLease, the company ensures 100 per cent compliance to social security-related labor laws, offering the benefits of a permanent job even to those on temporary assignments. With this, TeamLease becomes attractive to higher-quality talent, while putting to rest its customers' worries about potential exploitation and compliance.
Of course, temporary staffing was not, in itself, a new idea, and competition existed at both ends of the spectrum. On one hand, there were thousands of small operators, particularly in the blue collar segment. On the other, there were major multinational players like Vedior, Manpower, Kelly, Adecoo, Ranstad and others.
Ironically, it was the 'regulatory cholesterol' of the labor laws governing this sector that gave start up TeamLease an opening against these global giants. Strict Indian labor laws essentially rule out any type of temporary work assignments. Companies with the majority of their business in other countries were unwilling to tackle the laws choking the industry in India. TeamLease, a domestic player working only in India, suffered no such compunctions.
Dancing at the edge of what is allowed, TeamLease has over 300 tenure-related cases pending against it, but that is no deterrent for Manish. 'If we wait for all lights to be green, we will never leave home,' he says.
Indeed, TeamLease has incorporated as part of its mission to create a labor-friendly ecosystem in India. They work on this through public policy documents, surveys and lobbying. "As an entrepreneur, I think managing the context is more important than managing the company. No other company is as involved as us in influencing public policy related to labor laws. There is a consensus building up for labor and education reforms, and when that happens, the labor market will undergo a phenomenal change," he reveals.
India Life was funded by venture capital from day one. When he started TeamLease, Manish and his co-founders were determined to fund it differently. "With the nature of labor laws being so unpredictable, we couldn't afford to have an expiry date. We ploughed back the sale proceeds which we earned from selling India Life to Hewitt Associates in 2003." The company broke even in three and half years.
Manish believes TeamLease's strength lies in its people. "The key part of entrepreneurship is putting together a team and that means kissing many frogs to find your princess. But we did our frog-kissing at India Life and knew exactly who and what we wanted," he says. Seven of the nine in his present core team were with him at India Life.
Their backgrounds were varied, and so were their points of view, and this lack of 'group think' helped TeamLease grow, Manish feels. "Some look into external environments, others control the internal. Some see the big picture, others pay attention to details. Our strategy is the biggest reflection of the diversity that exists in our team," he points out.
TeamLease presently caters to a wide range of customers including SMEs, MNCs, government and educational institutions.
On last count, TeamLease had 83,000 employees spread across 670 cities. Its annual turnover touched Rs 800 crore in 2007-08, the customer base increased to 650 in four years and it recorded an annual growth rate of 40 per cent.
This staggering statistic says it all: TeamLease has hired somebody every four minutes for the last four years - nights, days and weekends included!
The company is targeting to become the largest private employer in India this year, scaling up to 250,000 employees by 2010. Manish predicts key shifts in labor patterns in the near future - from rural to urban; farm to non-farm; unorganized to organized and graduating from school to workplace - and these will open up opportunities like never before.
The key challenge for TeamLease, according to Manish, would be to create a healthy balance between customization that would be tailor-made to meet specific customer needs, and turnkey solutions to meet the high volume requirements of large growing companies.
"My experience with India Life has taught me to distinguish between a growing pain and a real issue - and that not all growing pains are real issues! This understanding has helped me sleep better at night," Manish laughs.
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