Tech-driven specialist staffing company Xpheno aims to match the right talent to corporate teams

4th Apr 2018
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With technologies such as AI and Machine Learning transforming workplaces, Xpheno aims to address the growing demand for skilled talent in industries like IT, consumer retail, engineering and life sciences.

At a glance

Startup: Xpheno

Founders: Kamal Karanth A, Anil Kumar ET

Year: 2016

Where it is based: Bengaluru

Funding: Self-funded (Rs 6 crore)

Revenues: Undisclosed; total clients 30

Team strength: 35

The problem they solve: Use technology to source "technology enabled" specialised staffing needs of companies and individuals by pulling information from social media, job sites and job databases.

Powered by new technologies like Artificial Intelligence and Blockchain, the future of work is here. Even as these technologies help boost productivity and improve our lives, their widespread adoption has led to public concern. Alongside, the deep divide between education and employability is forcing a reworking of the relevance of the current workforce.

A PwC report on The Future of Work: A Journey Towards 2022 predicts that a student protest will erupt globally in 2020 as a consequence of the non-availability of jobs. This prognosis is based on universities not being able to keep pace with sudden changes in economy and technology such as automation.

Enter Xpheno, a new-age staffing startup that wants to bridge the gap between the future of work and leadership. The Bengaluru-based startup wants to fill in the gaps at organisations struggling to find talent in industries such as AI and machine learning.

Started by Kamal Karanth and Anil Kumar ET in April 2016, Xpheno is a tech-enabled platform for specialised talent to showcase their potential and be found by the right employers. Xpheno, which translates into life, in Biology, aims to be the lifeline for companies and job seekers.

Kamal Karanth and Anil Kumar of Xpheno

The background

Kamal Karanth, Co-founder of Xpheno, says: “The world of work has changed rapidly in the last few years. The average tenure of senior professionals has reduced drastically. The younger workforce wants to work for a limited period only. Rapidly changing technology is rendering skills transient, triggering organisations to hire with short-term outlook rather than for the future.”

Both Kamal and Anil have 20 years of experience in technology staffing, working for India, American and Japanese companies.

Anil had two major stints that influenced his staffing industry career. The first one, at Ma Foi, was a unique journey where he went from being search consultant to becoming vice president over a period of 10-plus years. Anil contributed to building a Rs 13 crore venture into a Rs 1,000 crore staffing company. He worked across the northern and southern regions of India, setting up multiple recruitment offices in Tier II cities and also ran the largest and most profitable IT vertical during this time.

Kamal started his career in sales, in the mid-nineties. After seven years in sales, he had the unique experience of working for a Fortune 500 MNC, Eli Lilly, and a VC-funded biotech startup, XCyton. Kamal's evolution as a leader was complete by the time he put in a total of 16 years at Ma Foi Randstad and Kelly Services. At Ma Foi, he spent the majority of his tenure managing the APAC Operations where he launched recruitment operations across China, Hong Kong, Singapore, Malaysia, and Thailand.

Why did these two professionals decide to start out on their own? Because staffing organisations were focused on finding talent for the world of legacy and “not for a world integrated for real-time analytics and AI”. Xpheno’s focus is largely IT, future tech, consumer, and life sciences.

How different are they?

The recruitment world is divided into three segments.

  1. Large MNC companies focused on serving global customers in India
  2. Large Indian companies trying to staff high-volume entry level workforce
  3. Boutique entrepreneurs either dominant in a single city or focused on one sector and serving a small segment of loyal customers

Parthasarthy N S, Vice Chairman and COO of Mindtree, says: “The future is to look at what clients want. All staffing will become niche and will need just-in-time talent.”

So sectors like consumer, IT, engineering and life sciences are looking at talent that can identify new technology and business opportunities that are digital.

Xpheno has assembled a competent team of experts in each of these sectors. This is where the tech plays a role. The startup has developed a platform that allows organisations to seamlessly manage and engage their outsourced workforce. The platform also allows organisations to measure productivity in certain sectors.

The tech is an on-demand platform where Xpheno asks clients to load their job requirements; the matching is done by the staffing firm by pulling identifies from profiles such as LinkedIn and other job portals.

Xpheno is not only a specialised recruitment firm but also a high-tech staffing company for any customer who needs niche white collar talent.

The tech approach

The world of recruitment has, of late, been influenced by technology. Recruitment companies need to be efficient in equipping themselves with the latest tools to source, match, assess, interview, and on-board talent. This will free their time to the crucial aspect of specialising in sectors, relationship building, and advisory to their customers and talent.

This is where technology and product approach is helping Xpheno scale processes.

Each industrial sector has unique needs. For example, the automotive sector needs HTD talent (Hire, Train, Deploy).

Anil Kumar ET, Co-founder of Xpheno, says, “We have tied up with specialised trainers who train engineering talent with specialised auto skills required for electric cars research. We have started by providing engineers on contract (hire basis)to large carmakers and will expand on them.”

The IT industry wants experienced, specialised IT engineers for six-month projects; this is the future. In the consumer banking and financial services, the industry needs staffing firms to source and manage sales professionals.

“We have a customised productivity tracker technology platform, which makes it easier for sales managers to track their sales force,” Kamal says.

The business model

Xpheno will take a percentage of the gross for the year or for the period of contract from the companies that work with it to hire from the following staffing models:

  • Mid to senior-level professionals on direct hire model
  • Placing HTD automobile engineers on projects
  • Just-in-time experienced IT engineers for short stints
  • Productised sales offerings to consumer, financial services companies
  • A future platform for freelancers

“Xpheno aims to be the go-to platform to find specialised talent on direct roles, projects, or on freelance basis for engineering, IT, consumer, life sciences, and the financial services industries,” the co-founders say.

The learning so far

To get to 30 customers to use technology to track their staffing needs and efficiency was a challenge at the beginning for Kamal and Anil.

“Getting customers to understand and be convinced about our new approach took more time than we thought. Many of the new jobs are getting created in the MSME sectors. We wanted to make an impact there and bring more recruitment sophistication to that sector. But, we soon realised that the long-cycle time and the heterogeneity of that sector didn’t make an impact on our revenues,” Anil says.

For the first six months in 2016, they lost some time and money due to this. The duo then shifted focus to large Indian and MNC organisations where recruitment is more defined. So far, the team claims to have found better success.

The staffing industry, according to Motilal Oswal Investments, is worth $6 billion today and will be worth $20 billion by 2025. If there are labour reforms, the industry could easily touch $35 billion by 2030.

The top five companies in this industry have, on an average, grown by 25 percent this year, which is another indicator of the upward trend of the industry. Quess, Tem Lease, Adecco, Manpower, Randstad, Allegis, AON Hewitt, and Career Net are some of the well-known staffing firms operating in the field.

But Xpheno, which has a presence in NCR, Bengaluru, Chennai, Hyderabad, and Mumbai, has a five-year plan to reach Rs 450 crore by deploying more than 15,000 professionals with an internal employee strength of 200 members. The company plans to reach Rs 100 crore over the next two years.

Xpheno is self-funded for now (around Rs 6 crore has been invested), and claims to have generated enough cash from business to sustain the next two-three years. The startup is currently aiming to raise Rs 40 crore to expand their business by scaling up their technology-based staffing solution. The future of work is definitely going to be tech-focused, and Xpheno wants to show companies the way.

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