Manpower Supply Business in India

India's abundant workforce makes it an ideal location for starting a manpower supply business. This business focuses on recruiting and outsourcing skilled workers to key industries such as healthcare, hospitality, manufacturing, and construction.

Here is a guide to exploring the various benefits, requirements, and procedures for starting a manpower business in India. Established businesses looking to expand can get a Business Loan from Hero FinCorp at attractive interest rates.

What is a Manpower or Labour Supply Business?

A manpower supply company provides staff to their clients based on a contractual agreement. The job includes sourcing, screening, and hiring workers for the clients. Sometimes, the manpower company also trains workers according to the client's requirements. To succeed in the manpower business, you must understand the labour market and find the types of workers suited to the client's needs.

Benefits of Starting a Manpower Supply Business in India

Let's look into the benefits of starting a manpower business in India:

• Cost-effective: Outsourcing manpower as needed, instead of hiring full-time workers, helps reduce overhead costs. This strategy also enables you to hire top talent without the long-term commitment, which can benefit both the business and the clients you serve.
• Easy Coordination: Acting as an intermediary between workers and employers is a key benefit of a manpower supply business. It allows you to earn commissions for facilitating the hiring process while managing minimal operational responsibilities.
• Resources: By having access to a pool of skilled workers, you can easily match the right candidates to the right jobs. Building a strong team of trained professionals is crucial for providing quality service and ensuring client satisfaction.
• Attract Clients: Many companies prefer outsourcing recruitment to agencies rather than hiring full-time workers, as it reduces their operational costs. If your agency builds a reputation for supplying highly skilled talent, you will likely attract more clients, creating a steady stream of business.

Reasons to Start a Manpower Supply Business

There are many reasons to start a manpower employment agency. Some of them include the following:

• To provide staffing services to organisations and businesses
• To earn profit by securing contracts with large companies
• To maximise your profits with minimal overhead costs
• To build a business and be your own boss
• To reap the rewards of success the way you want

Steps to Start Manpower Supply Business in India

Here is a stepwise guide to starting a manpower supply business:

• Make a Business Plan: Plan different aspects of the business, including the business name, specialisation, growth plan, office location, funding required, target audience, industry, and customer acquisition strategy.
• Register the Business: Gather the required documents to register the business according to its structure. You can start a manpower supply company as a sole proprietorship, private limited company, or limited liability partnership.
• Obtain the Licenses: After registering your business, you must obtain other licenses, including GST registration, MSME registration, shop and establishment act license, PF registration, ESI registration, trademark registration, and manpower supply license.
• Create a Website: Create a website and buy a domain name. The website will serve as a database of your candidates and companies. Get a formal email address for communication.
• Navigate Online Job Search Engines: Initially, you can find candidates and clients through online job search engines. You can find a steady flow of clients and candidates through these portals. Over time, you can build a network and get your own resources.

Understanding the Labour Laws and Regulations

These key labour laws ensure fair wages, safe working conditions, and financial security for workers, promoting workplace harmony.

1. Industrial Disputes Act, 1947

This Act focuses on maintaining industrial peace by resolving disputes between employers and employees through methods like conciliation, arbitration, and adjudication. It aims to prevent strikes and lockouts that disrupt industrial operations, ensuring harmonious relations in the workplace.

2. Minimum Wages Act, 1948

The Act mandates that employers, especially contractors, pay workers a minimum wage as per government-set standards. It also ensures that employees working overtime receive double wages for the additional hours, protecting workers from exploitation.

3. Factories Act, 1948

This Act governs the working conditions in factories, ensuring safety, health, and welfare measures are in place for workers. It includes regulations on working hours, provisions for proper ventilation, lighting, and safe machinery to prevent accidents.

4. Employees' Provident Funds and Miscellaneous Provisions Act, 1952

Applicable to establishments with more than 20 employees, this Act ensures both employers and employees contribute equally (12% of wages) to a provident fund. It secures long-term financial stability for employees, especially post-retirement.

Obtaining the Necessary Licences and Registrations

After registering your manpower supply business, you must obtain several essential licenses and registrations to comply with legal and operational requirements:

1. GST Registration: Mandatory if your annual turnover exceeds Rs 40 Lakh.
2. MSME Registration: Helps in accessing easy bank loans and availing tax incentives.
3. Shop and Establishment Act License: Must be secured within 30 days of business establishment.
4. ESI Registration: Required for businesses employing over 10 individuals to provide employee health insurance.
5. PF Registration: Needed for companies with more than 20 employees to offer provident fund benefits.
6. Trademark Registration: Protects your brand identity from misuse.
7. Manpower Supply License: A mandatory license to operate a manpower service business.

For international recruitment, you need a Recruiting Agent License from the Ministry of Overseas Indian Affairs. Documents required include:

• Application form
• Rs 25,000 Demand Draft
• Passport-size photos of the business owners
• Owner's business details
• Digital signatures
• Rs 50 Lakh Bank Guarantee
• Balance sheet
• IT returns of directors
• Graduation degree of owners

Documents Required for Manpower Supply Business in India

To register your manpower employment agency, you will need the following documents:

• Passport-size photo of all owners
• PAN card
• Identity proof, including passport, voter ID, driving license
• Address proof, including electricity bill, bank statement, internet bill, mobile bill
• Aadhaar card
• Address proof of business office, including electricity bill, mobile bill, internet bill

Cost to Start a Manpower Supply Business in India

Starting a manpower business often requires an initial investment of Rs 5 to 10 Lakh. This includes the following expenses:

After successfully operating for over five years, you can consider expanding your manpower employment agency. A Business Loan from Hero FinCorp can help with this expansion, offering up to Rs 40 Lakh without requiring collateral. This loan provides the flexibility to meet your business needs, with repayment options in easy instalments.

How Does a Business Loan Help You Expand a Manpower Supply Business?

A Business Loan from Hero FinCorp provides the required funds to expand a manpower supply business. Here is how it helps:

• Ample loan amount of up to Rs 40 Lakh
• Online loan application procedure
• Competitive interest rates, starting from 14% per annum
• Flexible repayment terms of up to 60 months
• No collateral requirement
• Quick loan processing

How to Apply for a Business Loan for Manpower Supply Business?

Here is a stepwise guide to get a Business Loan online at Hero FinCorp:

• Visit the Business Loan page on the Hero FinCorp website and click Apply Now.
• Fill in the required fields and upload relevant documents.
• Enter the desired loan amount and tenure.
• If you meet the criteria, you will receive a reference number.
• A representative will contact you for any additional information.
• After verification, you will receive a personalised loan offer.
• Once accepted, the loan amount will be disbursed to your bank account.

Conclusion

Use this guide to start a manpower business in India and establish the company efficiently without hassle. Follow the steps mentioned here to become a reputable manpower business in the industry. Once established, you can finance the company's expansion with a Business Loan of up to Rs 40 Lakh from Hero FinCorp.

Frequently Asked Questions

1. How to get a manpower licence in India?

You will need a Recruiting Agent License registration to recruit manpower for global companies, which is valid for five years. Apply for it using the www.emigrate.gov.in portal and fill out a registration form. Attach the required documents and submit the registration fee to obtain the license.

2. Is it necessary to have industry-specific knowledge to start a manpower supply business?

It is preferable to have industry-specific knowledge to start a manpower supply company. However, newbies can also enter the market with a good network.

3. What sectors can I target with a manpower supply business?

With a manpower supply business, you may target various sectors, including healthcare, construction, manufacturing, hospitality, etc.

4. Why do I need a Business Loan to expand a manpower supply business?

A Business Loan can provide the financial flexibility to scale operations, meet client demands, and maintain a steady cash flow for business expansion.

5. What are the common challenges in running a manpower supply business?

A lack of capital is a common challenge in running a manpower supply business. However, a Business Loan from Hero FinCorp can help you easily overcome this challenge.

6. What are the eligibility criteria for obtaining a manpower supply business licence in India?

To obtain a manpower supply business license in India, the applicant must be a registered business entity and meet local labour laws. Additionally, they should comply with requirements set by the relevant labour authorities.

7. What is the GST service charge of a manpower supply agency?

The GST service charge for a manpower supply agency in India is typically 18% on the service fee charged to clients. This applies to the supply of manpower services, and agencies must ensure proper compliance with GST regulations.