How to Start Manpower Supply Business in India

How to start manpower supply business in India

Do you have this question in your mind, how do I start a manpower supply business? You are at the right place to know it all. Let’s not waste time and dive in.

Ideas to start and make money from the manpower supply business in India.

Manpower means human resources that can achieve any organization’s workload. Supplying them is engaging in providing those human resources temporarily or otherwise having them under client supervision for some time. Based on the huge boom in the industrial sector, manpower is high in demand. This would be the best opportunity to start and make some money. Not only industrial but a lot of other sectors also in demand for manpower one or the other way. Nowadays, security is also coming from manpower supply companies only. Even software companies also provide their team to work for clients.

How does it work?

You will have readily available human resources with you
Any organization in need of manpower will contact you with their need and
You have to filter good resources you have based on the organization need and give them
They will pay you money per resource basis. Few organizations will pay to the resource directly. In this case, you will get a commission.

One live example to know it better

Let’s say there is a builder. He buys land, constructs apartments, and sells it. Sometimes he gets to work somewhere outside his place where he doesn’t have any manpower. In this case,

He will reach the nearest available manpower supply company
Give them his requirement like how many people needed, for how long, etc
Manpower supply company will quote him per resource and day basis or per time
Then he should stop worrying about the manpower as the supplier will worry

Businesses these days are outsourcing these kinds of things to de-load themselves. Because maintaining their manpower is time-consuming and a little stressful.

The preplanning will help

As we know, to start any business we need proper planning. Same needed with this one too. This needs a very effective plan as it deals with one of the key needs of any organization (human resource). Let’s get to know what we should be doing in order.

Select specific business industries to which you want to supply manpower

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Different sectors will have different needs. Few will have hard work and few have soft work. We might need to select the sectors based on the resource we have or whom we want to recruit.

What are the minimum qualifications needed for each sector

This varies for different businesses. Some businesses might require hard labor for liftings, diggings, etc. Some businesses will need soft skills, which require aptitude skills as well. So, based on the sectors we selected we need to recruit manpower by testing their qualifications.

Develop skilled professionals

To sell manpower you need a pool of manpower. Experienced candidates who are planning to switch jobs. Fresher’s who are seeking a new job. Offer skills development programs for recruited people. So, they will be ready when an employer comes.

How to effectively maintain the list of resources we have

Yes, this is important. We should be looking for correct manpower when an organization comes over to get a few. We should be ready. So, categorizing them based on their skill set will help in increasing your productivity. An inventory with resource information from where you can filter based on skillset should be there.

Market yourself with in the industry

First, you must target to promote yourself within the industries you selected. This is the most important one to be taken care of at an early stage.

How to start this manpower supply business in India

Like any other business. There are few things that need to be done to start this business.

Get a license

A Government-approved license will give trust to the customers. Clients will first look at registered suppliers for better business. You should get a license under the shop and establishment act of your state. If you have more than 20 employees you need to get a Contract labor license too.

Register your company with

Service tax department: Tax imposed by the government on service providers. You will be paying this tax but recover from your customers.

Professional tax department: Tax on all kinds of professions and employment levied based on the income of that profession.

Labor welfare fund authority: A welfare fund is an aid in the form of money or any other need for labor. It provides facilities for labor to improve their condition of work.

EPF authority: Only if you have more than 20 employees. This helps your employees to get monetary support after their retirement.

Get a PAN card and GST

A permanent account number(PAN card) is the most important document nowadays. This is issued to prevent tax bypassing by linking all your business transactions to it. You must contact your charted accountant of GST registration.

Open any bank current account

A primary requirement these days is to have a current account for any business. As business transactions can happen daily or even on an hourly basis this is needed because there will be no cap on the number of transactions.

Few Tips

File all your employee income returns on time
It is better to record all expenses whether it is clients or employees
Follow labor welfare laws properly

Effective Marketing strategies

Either you fill permanent vacancies or fill workers for temporary jobs. You need an effective marketing strategy to stand in the market. Here are a few tips to take care of this.

Take Competitive advantage

See how your competitors are finding clients. How much they are charging per placement. Promote better offers than them to attract clients and candidates.

Identify the market

Learn everything about the market you want to target (sectors you chose to deliver manpower for). Knowledge of the target market will help evolve.

Marketing to clients

Your strategies should include providing quality customer service by identifying candidates or filling temporary positions as fast as possible. You must establish and maintain relationships with companies that use manpower supply. Have email marketing messages to keep the clients up to date on candidates you have.

Attracting candidates

Use email marketing, text messages to let candidates know the job openings. Set up a career platform on your website for quick access to any candidate. Post job openings you found on job display sites.

Find any trade shows happening in the industry you picked. Whenever possible, purchase booth space to market your business.

How much does it cost to start this business in India

These values will vary based on the number of human resources you have. It will be less if you have less than 20 and more if you have more than 40. All the licenses or registration can be done online nowadays which will cost less. If we go with any consultancy or third party, they will take more than you imagine

For licenses – Rs. 7,000 to Rs. 15,000
For registrations – Rs. 15,000 to Rs. 20,000
Bank current account – Rs. 10,000 (minimum balance for most current accounts are 10K)

To quickly start the business on average 50K to 60K is good enough.

How much we can earn with this business

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This is different for temporary and permanent staffing

If you provide manpower temporarily then the business will pay your per person on an hourly or daily basis. Based on the workload.

Ex:- No of Labor = 20

Per hour per person = Rs. 100
Per day (8 hours) = 100 * 80 * 20 = Rs. 16,000/-

It is up to you how much you pay and how much you take as a commission

If you are providing recruiting and providing manpower to other businesses permanently. This kind of recruitment cost is usually 15 to 20% of the candidate’s first annual salary.

Ex:- Candidate salary per month = Rs. 10,000/-

Per Year = Rs. 1,20,000/-

You will get a max up to Rs. 24,000/-.

Advantages of this business

There are some advantages to manpower services

Candidates find this easier to register with placement agencies instead of applying to individual companies. More registrations, you will get more commissions
Generally, any company will have a human resource department to deal with manpower. These days to unload the burden companies are seeking help from manpower supply businesses
Businesses thinking about cost implications on recruitments are reaching manpower suppliers which benefits this business growth
Requirements for staffing can be balanced better. Manpower planning will make it easier for staff movements
Manpower service helps in the faster hiring process and provides high-quality candidates

Disadvantages of this business

There are a few disadvantages as well

Not easy to maintain many resources for different sectors
A lot of studies is needed to understand the skill set of each employee before recruiting
It is hard to make sure of employees’ availability as it completely depends on that individual. If manpower is not supplied on time then we will lose reputation
Daily basis workers handling will be a lot of stress. It is tough to maintain. If anyone misses on a day we need to get a replacement immediately
Lack of good communication is one of the reasons for bad reputation in this business
Get to handle labor issues if any raises

The bottom line to start a manpower supply business in India

Manpower supply is one of the best businesses if planned and maintained well. Because most of the companies are coming this way to get candidates onboard instead of taking that hurdle of the recruitment process. There are a lot of competitors already in the field. Your strategies should be better than them to stand in the market. Get complete knowledge of every detail given in this article before starting.

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5 COMMENTS

Shivakumar Shirwal July 29, 2021 At 6:39 am

Good suggestions Thanks a lot

abhijit sarkar September 13, 2021 At 6:07 pm

very good suggestion to make a stable mindset in this bussiness .

G Rupakanthan May 24, 2022 At 7:52 am

Thanks a lot for your suggestions. Is there any free program (excel or other) for management of workplace supply?

Vijay kumar August 9, 2022 At 6:00 pm

Thank you for your golden word’s…

ARJUN SHARMA April 14, 2023 At 3:54 am

very good knowledgr