Merit-Trac: A Test in Everyone’s Life

Team Members:Ashish Vikram Singh

Nikita DuaRajshree Vijay

Mrinal MadhukulyaShayantan Ghosh

Pritesh Nisar

INTRODUCTIONIndia is the fastest growing economy in the world & the growth

has been dynamism for service sector & growing at double digit rate.

The strongest growth in 1990’s was in business services particularly IT & ITES.

With advance in technology, it has become possible to deliver services over long distance at reasonable cost.

With a favorable demographic profile, English being widely accepted medium of communication, low cost offshore work translating into average saving 25-40% of cost.

India has the largest talent pool in the world which is 1.5 times that of China & twice that of US.

India ranks 1 in the availability of scientists & engineers, 5 in the quality of math & science education, quality of business management schools is rated at 6.

India has 272 universities, 58 deemed universities, 1600 colleges & more than 1000 Engineering & Management institutions with total enrollment totaling to 9.3 million.

India churning out 2.3 million graduates & 3 lac postgraduates every year & boasts of of close to 4 lac engineers, more than 1 lac management graduates, 25,000 medical doctors & 12,000 PhDs.

MERIT-TRAC: Emergence of a Strong IdeaMerit-Trac was conceived by Madan Padak, an IT professional

with stints at Wipro, Infosys & BFL Software. Idea that led to launch of Merit- Trac was conceived when

Madan was catching up with two of his friends- Krishna & Suresh- who were running a software venture called First Shot which was into financial risk management software products.

First Shot had been asked by its leading client to develop software product to manage its question bank for pre-recruitment testing

Madan realized that building a service around this could add value to clients & represented a potential business opportunity.

In the booming IT industry in 2000, “Aptitude Tests” were commonly used by IT & other engineering firms to filter candidates for interview.

Idea was to provide testing & assessment services to corporate to help them in recruiting big numbers, which was the emerging need.

After discussion they identify key activities- such as test design, paper printing, test administration & post test feedback

Merit-Trac was launched in August 2000.

Beginning of JourneyFirst Shot’s technical & administrative resources to get the basics

of Merit-Trac’s product & services up & running.The core content management system developed by Suresh &

Krishna was modified using technical resources available from First Shot.

For activities involved in delivering Merit- Trac’s services, such as printing test sheet, locating test centers, finding test supervisors, collecting & grading test papers, etc., they relied on administrative support from First Shot.

First customer was none other than Wipro, Pratik Kumar, Executive VP(HR) at Wipro was one of the first people to give his vote of confidence when Madan approached him with the concept in 2000.

Finding an Angel InvestorIn next few months Merit-Trac had come a long way. By

November 2000,the business had: For customers- two of which were blue-chip companiesA founding team with a complementary set of skills and

experience.A modest office spaceRevenue of $10,000

MANTRAS OF SUCCESSVolume GameTypically, Merit-Trac assesses around 75,000 candidates every

month.From April 2006-March 2007, Merit-Trac tested around

7000,000 candidates and they have assessed over 1.5 million candidates till date.

IT industry has absorbed around 50-60 thousand fresh recruits and BPO 125,000 in the year 2004 whereas year 2005 created 75,000 new jobs in IT & 150,000 in BPO sectors.

BPO sector alone is expected to need manpower of 1.1 million by 2008.

Given that the applicant- offer ratio is around 8-10% one can imagine the number of applicants required to be processed by IT & BPO industry.

This speaks volumes in terms of opportunity for Merit-Trac, which still happens to be the only major player in the recruitment process outsourcing space.

Merit-Trac takes care of ICICI One Source’s recruitment back office and also part of the selection process.

It has screened over 300,000 candidates in 2006 for the BPO sector –averaging 20,000-30,000 candidates every month.

Assessment ProcessMerit-Trac’s job starts from the moment client forwards these

resumes for initial screening.Resumes are screened on the basis of parameters defined by

the client, short listed candidates are then scheduled for assessments & those who manage to clear it are scheduled for interviews.

Assessments are broadly classified into 4 broad areas.Merit-Trac’s content bank has over 60,000 questions that are

constantly updated.150 experts on various subjects from across the globe chip in

to help Merit-Trac develop its test .

Model based on license cost per candidate assessed and a variable cost per transaction.

Numerically, this can be as low as Rs 150 ($3-4) per BPO candidate & Rs 600-700 ($13-15) per IT candidate & vary depending multiplicity, customizing & difficulty of test.

Focus and NeutralityMerit-Trac has managed to clock growth rate of 300% in the initial

few yearsIt is an Assessment-Only company & nothing to do with training &

staffing.Very clear in their minds that the company will work in his domain

only & built credibility by focus.

SERVICES OFFEREDRecruitment AssessmentAccessing and hiring quality talent is becoming challenging in a

people driven economy.Toughest task is to understand the availability of talent pools,

sifting through this dynamic talent pool & choosing the candidates that best fit with the job-role & organisation.

Imperative for companies to get it right the first time to have healthy and productive workforce.

Merit- Trac’s suite of tests is over 300 areas spanning communication skills, general abilities spanning communication skills, general abilities, domain knowledge & personality profiling.

Lateral AssessmentIt contains a specialized suite of tests to meet the special

demands of evaluating lateral candidatesTools like Code Trac-the online software testing tool help track

the skill & application of a candidate’s knowledge.

Employee AssessmentThere is a need for periodic evaluation of employees within an

organization .Merit-Trac provides customized Employee Assessment for

clients that provide a validated measure of employees’ capabilities in future.

Educational AssessmentPariksha the Education Assessment service from Merit-Trac

assists in making the whole examination process efficient while maintaining the highest principles of fairness & transparency.

Pariksha provides scientifically designed test content & helps deliver exams online through 21 state-of-the-art assessment centers spread across 16 cities.

Pariksha provides online test delivery & offline mode with Merit-Trac’s proven capability of delivering offline assessments in over 100 cities across India.

Entry in Education DomainSigning agreements with various State Governments-like

Karnataka, West Bengal & Orissa & Kerela.Entry in this sector influenced by the fact that entry-level

recruitment constitutes 17% of total recruitment market.Team-Lease employment survey states that 93% of the

surveyed are recruiting people at the entry level.Most organizations are targeting the local engineering colleges

for fresh talent.

Since this is a huge task & does not fall into core business, the companies are not going to do it themselves, this present, a huge potential to assessment companies like Merit-Trac.

The company has planned to enter education domain by tying up with State Government & educational institutions.

Educational Products:Campus-TracResearch Reports

Campus-Trac InitiativeTries to enhance the employability of fresh graduates from

academic institutions.Program provides detailed feedback to students/colleges/

universities on strengths & weakness which aid them in bridging these skills through training interventions, thereby enhancing employability.

For industry partners, Campus-Trac will create a platform for increasing the available talent pool in the medium term.

Trac-Skills the Certification Program for IT, BPO, Services & MBA Talent Pools has assessed & provided structured feedback on industry-readiness to thousands of candidates across country.

Trac-Skills are endorsed by several companies across sectors & partners with academic institutions like Bharathiar University & VTU

Under this the company has tied up with number of educational institutes.

RESEARCH REPORTSNational Index-Communication SkillsEngineering Talent pool report

National Index-Communication SkillsThe national-index communication skills (NI-

CS) was an index created to map the communication skills of the talent pool for the BPO as well as other sectors.

It aimed at getting a better insight into the dynamics of talent supply with respect to its communication skills.

It successfully built a rich performance based data of over 200000 perspective candidates.

Engineering Talent ReportOne of the unique efforts of Merit-Trac to

understand the profile of Indian engineering students, quantify the relevant skills, identify gaps and lastly bridge gaps if any in demand and supply of industry recruits.

It objective was to assess the performance of Engineering students pan India and evaluate the differences in competencies that exist between diff geographic regions.

The sample size for these tests was 25000 candidates and 800 campuses across India.

“Merit-Trac”- Present ScenarioMerit-Trac at present is India’s largest Skills

assessment Company, which has worked for 150 clients and assessed over 1.5 million candidates.

It designs and delivers assessments for both corporates and entrepreneurs

It has established networks with a lot of leading companies like HSBC, ICICI, GLT etc.

MEG Announces Investment in Merit-TracIn Nov 2005, Merit-Trac brought on board HSBC Private Equity

where they invested US$3.8 Million .MEG also announced its investment by which they will acquire

stake existing financial investor-HAV2 (Mauritius) Limited advised by HSBC and will infuse additional equity into Merit-Trac, leading a majority stake over 70%.

With a total workforce of over 450 people, the combined entity now have executed over 2 million tests.

As majority stakeholder MEG will play a strategic role & will join Board of Directors of Merit-Trac, & support its growth in newer markets & Merit-Trac will operate as an independent asssessments/testing service provider.

Future ChallengesMerit-Trac will now be expanding its range offerings across

both the corporate & education segments, expanding its retail offerings, as well as entering newer segments.

As Merit-Trac gears up to expand its presence in education domain & strengthen its position it has to find ways to close the gaps, which come from Assessments-Only position.

Improve the quality of manpower & bridge this manpower gapMerit-Trac decides to enter training domain, they should do it

by themselves or through joint venture with an established player in industry, so that they can keep focus & neutrality.