According to a recently published report by Deloitte, India is likely to emerge as an economic superpower on the back of its young population and drive the third great wave of Asia’s growth after Japan and China. The buoyant Indian workforce is expected to bring staffing firms into the limelight as industries strive to attract the best of manpower resources.
Before we pick a handful of staffing firms that are likely to benefit from the improving manpower resources in India, let us dig a little deeper into the report.
Young Indian Workforce
Per the report, Asia is ageing comparatively faster than the world. Its population aged 65 and above will increase from 365 million at present to more than half a billion in 2027, accounting for approximately 60% of the total global population in this age group by 2030. The median ages of Japan and China at present are 47.1 years and 37.6 years, respectively, while that of India is 27.3 years — one of the lowest in Asia.
Both Japan and China are likely to witness a sharp drop in its workforce with a skewed aged population. However, India’s total workforce likely to surge from 885 million at present to 1.08 billion over the next two decades and remain above that for the next half century.
Economists at Deloitte further predict that India would account for half of the increase in potential workforce in Asia. In addition to being better trained professionally, much of the increased workforce would be attributed to rising women’s share in employment and their capability to work longer.
Staffing Industry in India
With a vibrant human capital, the staffing industry in India has undergone a massive transformation as leading companies across the world sought to extend their footprint in the country either in their individual capacity or through mergers and acquisitions. Over the last few years, the industry has radically evolved as more companies seek organized staffing and workforce solutions to rationalize operations and improve profitability.
4 Stocks in Focus
Kelly Services, Inc. (KELYA - Free Report) : Headquartered in Troy, MI, Kelly Services provides workforce solutions to various industries worldwide, specializing in mid-senior level recruitments, scientific recruitments, IT recruitments, engineering recruitments, functional recruitment and financial services recruitments. Kelly Services' operation in India commenced in 2001 and has since increased its presence to six locations across the country.
This Zacks Rank #3 (Hold) stock has a VGM Score of A and has beaten earnings estimates in each of the trailing four quarters with a positive surprise of 44.8%. Kelly Services has outperformed the industry in the last six months with an average return of 6.9% compared with a gain of 0.4% for the latter.
ManpowerGroup Inc. (MAN - Free Report) : Founded in 1948 and headquartered in Milwaukee, WI, ManpowerGroup is the global leader in the employment services industry and has a well-established network of 2,900 offices in 80 countries. The company offers its services to approximately 400,000 clients, including small and medium sized enterprises across all industry sectors as well as the world's largest multinational corporations.
Its India arm is named ManpowerGroup India, and has been providing services since 1997. It has beaten earnings estimates thrice in the trailing four quarters with a positive surprise of 4.5%. This Zacks Rank #3 stock has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. ManpowerGroup has outperformed the industry in the last six months with an average return of 15% compared with a gain of 0.4% for the latter.
Randstad Holding NV (RANJY - Free Report) : Headquartered in Diemen, the Netherlands, Randstad Holding offers solutions in the field of flexible work and human resources services, including regular temporary staffing and permanent placement services. The company recruits supervisors, managers, professionals, interim specialists and consultants for middle and senior leadership positions.
Randstad Holding acquired the operations of Ma Foi in 2007 and named its Indian operations as Ma Foi Randstad in 2010. Eventually in April 2012, the company rebranded it as Randstad India. This Zacks Rank #3 stock has a VGM Score of A and boasts a modest long-term earnings growth expectation of 8%. Randstad Holding has outperformed the industry in the last six months with an average return of 3.6% compared with a gain of 0.4% for the latter.
Adecco Group AG (AHEXY - Free Report) : Headquartered in Opfikon, Switzerland, Adecco Group provides various workforce solutions to businesses and organizations worldwide, including temporary staffing, permanent placement and outsourcing services. In 2004, the company acquired 67% stake in Peopleone Consulting, a Bangalore-based company, to enter the Indian market.
This Zacks Rank #3 stock has a VGM Score of A and boasts a modest long-term earnings growth expectation of 6%. Adecco Group has outperformed the industry in the last six months with an average return of 9.6% as against a loss of 2.2% for the latter.
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