Why Monster gobbled Jobsahead

CHITRA PHADNIS / Mumbai

By 2008, the US will have a severe labour shortage, say US labour department projections. The country’s population is ageing. The baby boomer generation is set to retire, and the number of youngsters entering the workforce is much lower. The shortfall could be between 10-23 million, according to department of labour forecasts (including entry-level, skilled and unskilled).

The department as well as American economists agree that the best and possibly the only way to counter this would be to outsource labour requirements.

The department of labour, in its stated strategy to meet the challenges of 2008, has chalked out a plan to prepare the workforce for a future that will be a “multicultural environment”, with an emphasis on “social, international, intercultural and multilingual” skills.

India could be one of the countries that is best placed to provide manpower. According to Monster president and managing director, Asia, Arun Tadanki, “India is one of the countries which has a surplus [human resources] and this is a huge opportunity to market [the country’s] English-speaking graduates,” he said.

In fact, it is this long term view that drove Monster to invest Rs 40 crore in India to buy Jobsahead, which had revenues of Rs 8 crore and a cash profit of Rs 3 crore.

With this acquisition, the company has scaled up in India and also eliminated significant competition. This acquisition makes it the largest online

recruitment company in the country with a database of 55 lakh job seekers.

According to Tadanki, the shortfall in US jobs will be felt as early as in the next six to 12 months. “You heard about NRIs coming back to India. In the next six to 12 months, you will see a reversal of this trend,” he predicted.

Of course, there will also be the job-skill matching to do. The predictions are that while more jobs will be created as the US economy grows, the workforce may not be geared to take them up. In India too, though new job opportunities are opening up, the problem of jobless growth persists. Estimates have put the number of Indian jobless at 373 million by 2006-07.