PeopleOne rides crest of recruitment boom

PeopleOne Consulting, a leading player in the human resources space, is expecting to nearly quadruple its top line in the current year to around Rs 100 crore (Rs 1,000 million) compared with Rs 27 crore (Rs 270 million) in 2003-04. 
 
The JP Morgan Partners-funded startup, which began in 2000, has been cash positive from its fourth month of operation. 
 
Consequently, CEO Ajit Isaac likes to emphasise that it received a "$1 million venture funding commitment" when it got going, opposed to the usual practice of startups revealing how much of funding they actually received. It is a zero debt company and currently makes a net pre-tax margin of 8 per cent. 
 
PeopleOne could easily go in for a successful public issue, considering its financial health and the classy global names it can boast as business partners, but there is currently no need for fresh cash. 
 
Should the venture capitalist want to book profits on its investment, "a strategic partner may replace it," says Isaac. PeopleOne operates in the recruitment and temporary placements space, with training opening up as a new line of business. 
 
Temporary placements,

the practice of companies using the services of temporary employees, is relatively new in India and offers strong growth opportunities. 
 
The company has been rapidly ramping up its number of 'associates', as such workers are called, from 3,300 last year to a targeted 6,500 in the current year. 
 
"We have already pipped the till now biggest player in the field, Chennai-based Ma Foi, which currently has 6,200 deputies, as they call them," claims Isaac. 
 
The recruitment and temporary placement businesses perform alternate functions. While recruitment contributes 60 per cent of margins, placements mainly fuel the top line. The associates are not on the company's staff, who number a bare 210. 
 
"We have built a scalable business model," says Isaac, explaining how the same number of "own" employees can go on supporting a rapidly growing number of associates. 
 
Though PeopleOne operates out of Bangalore, the IT industry is yet to catch on to the practice of using temporary hands. 
 
It is still heavily into permanent recruitment and HR consultants have their hands full coping with the rapid ramping up taking place.