The Back Drop

Agribusiness-Past and Present

Time has come to go a step ahead of just repeating certain phrases over decades like Agriculture is the backbone of the country, about 70% of Indian Population lives in villages and so on. Let us now link agriculture with agribusiness in whatever we do or say within the realm of agriculture. At present, we can very well say that Agribusiness has entered a new era, marked by vibrant business activities; farming becoming hitech and technology directed; business becoming more global, farmers getting tech saavy, hitherto less heard business models in agriculture like commodity exchanges coming up in the country, business houses and entrepreneurs completely inactive in agribusiness even in the recent past currently showing interest in agribusiness, global slowdown pointing out at the importance of farming and farming sectors are some of the trends that is defining new contours in the countrys agribusiness sectors. Technology and globalization is making agribusiness operations more competitive, tech driven, fast and trendy. Along with the entry of new players in the business from even previously unthought of sectors like IT, Telecom, FMCG and others, there has been an import of new culture of work style also. Also many of the family owned companies in agribusiness, with the next generation taking up the mantle, is undergoing a complete makeover in terms of work style and functioning in tune with the modern times. Emerging Human Resources Requirement All these indicate that agribusiness is witnessing a complete change and as a result, calling for new paradigms in human resource requirements for the sector. Gone are the days when a company in agribusiness sector could fulfill its requirements at its own pace, going to some renowned campuses, or placing adds in news paper or head hunting for even the smallest posts through employee referral or spotting an employee of another company performing well in the market and wooing him up to join the company. With the advent of sectors like F&V retail business, cold chain activities, rural finances and diversification of various traditional companies from fertilizer, seed, agrochemicals business into other related business interests, human resource requirement in the present day for agribusiness companies has become very critical. Companies need quality manpower in the shortest time period. At the same time, there is increased competition, greater pressure, need for greater operational efficiency and greater focus on the core activities. Also, business groups from diverse sectors like IT, Telecom etc feel a need to know more about the sector vis--vis the right man-power availability and requirement aspects. Is Cost Reduction the only MotiveDifferent Aspects of HR Outsourcing While outsourcing various HR functions to independent third party vendors, an organization, apart from cost reduction and focusing on its core activities, _ Consultant capabilities and talent: On many occasions, a company would like to utilize the domain knowledge and expertise of the vendor in a cost effective way through outsourcing its strategic core

The Back Drop

Agribusiness-Past and Present
activities in HR. _ Functions Difficult to Manager: Functions like that of benefits administration etc., are sometimes very cumbersome, difficult and time taking for an organization. Moreover, these activities in no way contribute to the core activities of the organization. In such instances, an organization looks forward towards outsourcing these activities. _ Specific Technologies: Many a times, companies offering outsourcing services in HR activities possess certain technologies specific for the purpose. Owning these technologies make sense in case there is a very large clientele and regular requirements like that of the vendors of HR outsourcing. However, they make less of any economic sense for an organization for its own manpower management. In that situation, it looks forward to outsource. _ Resources Not Available Internally Within the Organisation: In many cases, certain resources like that of a database or pool of trained manpower or networking capabilities etc of a vendor is eyed by an organization and HR activities outsourced to utilize those resources. _ Asset Transfer: In some instances, outsourcing deals help a company to transfer some of its assets-some or entire part of specific assets, to the vendor. It can even encompass transfer of some of its staff. Domain Knowledge and HR Outsourcing in AgribusinessThe Need Analysis Other than the advantages of any general outsourcing activities like saving of cost, focus on core business activities and others, some of the specific advantages of outsourcing HR activities typical to the agribusiness sector are: _ Typical nature of Agribusiness: Agribusiness is quite unique when compared to other business sectors. The supply chain aspects are quite complex presence of unorganized players within the ecosystem of agribusiness, requirement of a lot of business acumen along with technical knowledge about agricultural sciences along with a fair degree of uncertainty in the business from the point of view of vagaries of nature, seasonality of production, perishable nature of products etc. All these calls in for maximum operational efficiency for the organization in agribusiness with minimizing risk at each aspects of operation including manpower management. Due to seasonality of production and also business intensity, manpower requirement fluctuates between various seasons and many organizations considers temporary staffing as a convenient method of utilizing human resource most productively and cost effectively. _ Requirement of technical knowledge: Agricultural science includes diverse fields from genetics and plant breeding, entomology, pathology to economics and extension. The agribusiness in the same way categorises itself with operations requiring manpower from these diverse fields of agriculture sciences. Along these, one requires a right blend of IT exposure and business acumen. As a result, the selection process of a right candidate for a particular job depends on the true understanding of the job description rightly understanding its technical words, knowledge of the right terminologies and synonymous keywords, rightly understand the synergies and the variations between different sub sectors within agribusiness sectors. In short, proper understanding of these aspects would largely determine the right evaluation of a prospective employee and the management may not always afford to do that at every step in order to save their time for focusing on more core activities. They then would like to outsource these activities to

Pinaki Ranjan Dey

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The Back Drop

Agribusiness-Past and Present
organizations specialized in agribusiness sector or having long presence in agribusiness sector with qualified technical people. _ Bulk Recruitment Activities: Sectors like retail industry on various occasions requires a large manpower in a very short time. They would in such a situation like to outsource the recruitment function to some organizations dedicated to the agribusiness sector. Understanding the rural economy as a backdrop of agribusiness is quite crucial in understanding companys manpower requirements. For functions like procurement in retail operations, one needs to understand different aspects of agri supply chain, interaction with farmers and sensitivities and intricacies involved in dealing with the rural ecosystem. An organization having familiarity with these aspects tend to find and source the right candidate in shortest possible time to the clients, there by saving time and money for the client. _ New Entries In the Market and Need to Convince Prospective Employees: New entries can be in terms of entering a new geographic area, an established company in some other sector diversifying into agribusiness, an established company in agribusiness entering into a another related business, entirely a new startup or a multinational in agribusiness starting operations in the country. All these types of companies would like to outsource their recruitment and different HR activities to some recruitment agencies specialized in agribusiness. Usually, for new entries, unless its a huge multinational or a big business group, prospective candidates seeks information in terms of their future prospects and career growth. A detailed domain knowledge, awareness of the technical aspects of agriculture sector along with clear understanding of the future trend of the sector helps to guide a candidate in the right way and incite further interest in the company as a prospective candidate. _ Head Hunting for Senior Positions While Maintaining Secrecy: Sometimes, in the buildup of replacing a senior level position of any organization, secrecy is maintained for various organizational and operational reasons and generally preferred to be done through some consultants. Extent of domain knowledge and networking in the agribusiness sector in such a situation helps in sourcing the right candidate in the shortest possible time through head hunting. HR Outsourcing in AgribusinessA Win Win Situation For All Outsourcing some functions of HR activities like recruitment and staffing is in no way replacing the internal HR team of an agribusiness company. While the internal HR team of a company takes care of various important activities of human resource development within the company along with various
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corporate social responsibilities coming up in big day now-adays, it has the luxury of getting a specialized service of a third party providing its recruitment needs through sourcing the right candidate utilizing its domain and technical knowledge in agriculture sciences and agribusiness. Issues and Challenges in HR Outsourcing in Agribusiness _ Shortage of skilled manpower: One of the major issues in the sector is the shortage of people who know the nitty-gritty of agribusiness as well as the operational areas and skills of human resource outsourcing functions. As the HR outsourcing industry in agribusiness is still in a nascent stage, agribusiness professionals and agriculture graduates are not much aware of the career opportunities in this sector. _ Existence of many unorganized

The Back Drop

Agribusiness-Past and Present
players: HR outsourcing sector is marked with many unorganized players, sometimes even by individuals operating from their living room, particularly in the recruitment activities. These unorganized players can operate on a very small margin. However, HR consulting is sometimes more than just networking and having contacts with people. It requires a lot of involvement and investments in terms of databases, market research, extensive calling and traveling which is possible for organized player with a definite setup, having offices in various locations, manpower and investment cost. _ Disconnect between industry needs and curriculum offered by institutes: Unfortunately, in our country, in the agribusiness sector like many other sectors, there is a great disconnect between what the industry needs and what the institutes engaged in agricultural sciences offers. The course curriculum and the mind set are very academic and theoretical. Industry wants readily employable candidates who require far less training. This sometimes becomes a major hurdle in the way to sourcing the right talent. _ Inherent Risks of HR Outsourcing: There are some risks associated with the HR outsourcing activities like candidates not joining at the last moment causing a lot of inconvenience to the companies. Also, on some occasions, positions are scrapped at the last minute by organizations causing a loss to the outsourced company in terms of man days worked on. Important Growth Drivers of HR Outsourcing in Agribusiness _ Booming Agribusiness: In the recent years, inspite of the current recession, agribusiness as a whole is growing unlike their contemporaries in the sectors like IT, exports, Banking etc. Many of them have ambitious expansion plans too. Despite the recent issue of scanty monsoon rains all over the country, its expected that many of the companies would go on with their expansion plans. They would require man power for that and would like to outsource most part of that. _ Increased Competition and Decreasing Profit Margins: Competition in some of the agribusiness sectors like agri inputs has increased significantly. A lot of consolidation, more globalization etc., has resulted in reduced profit margin. As a result, organizations are willing to outsource supporting activities like recruitment in a cost effective manner so as to increase operational efficiency and concentrate more on their core activities. _ Some Big Names in HR Outsourcing into Agribusiness: Many of the big names in HR outsourcing hitherto consulting predominantly for sectors like IT, Telecom, Healthcare etc are now eyeing the agribusiness sector. Certainly, this would tend to drive the HR outsourcing activities further. _ Entry of various MNCs into Agribusiness: Though many MNCs are present in India, many other companies from overseas are entering the country in sectors like retail, food processing and others either directly or indirectly. They would like to expand very fast, recruiting a number of people in very less time. Consequently, they tend to outsource recruitment functions. Conclusion The flavour of HR outsourcing is picking up in agribusiness. Many of the organizations are increasingly realizing the benefits of having a combination of outsourced and in-house HR activities, a mix whose proportion depends on the size of the organization. However, one should understand that like any

The Back Drop

Agribusiness-Past and Present
other service industry, one of the critical success factors of HR outsourcing service is the mutual trust and confidence between both the companies and the vendors. The relationship should be one of a kind of strategic partners than mere client relationship. Companies should select a vendor on the basis of providing the maximum returns, sometimes not only in terms of direct cost savings but also from the point of view of several long term benefits. On the other hand, vendors should have a proper understanding of the clients needs, their organizational culture and should always aim at providing the maximum returns, stretching that extra mile.
Head-Research and Studies, Concept Agrotech Consultants Limited AGRICULTURE