India Inc betting big on temporary employees

                                11 Nov 2008, 0214 hrs IST, Papia Lahiri, ET Bureau

NEW DELHI: Global financial crisis and the consequent knee-jerk reaction in India—retrenchment and layoffs—has given temping firms a reason to smile. Amidst layoffs and cautious hiring as means of cost cutting, temporary and contract staffing is fast emerging as a lucrative option. The demand for temporary staff across sectors has been steadily growing at 25-30% over the last six months.

India Inc is increasingly realizing that contract or temporary staffing can help reduce cost of hiring, absorption, managing people and compliance. Currently, the top five employers in India account for nearly 1.20 lakh temporary employees in the organised sector. “With the global crisis affecting almost all sectors in India, companies are now more keen on hiring temporary and sub-contracted staff,” says Kelly Services India country general manager Rajiv Mehrotra.

According to the industry estimates, organisations are saving anywhere between 20-40% in their total wage bills by opting for temp staffing. It is also helping companies to identify requisite talent with specific skills as per their own requirements.

Most of the temp hiring is done by sectors which engage in numerous short-duration projects. Sectors like IT, ITeS, BFSI, aviation, hospitality, manufacturing and infrastructure are reported to have increased their contract staff considerably. These include companies like Microsoft, GE Money and Big Bazaar, among others. Contract staff is being hired across levels in various sectors as it helps companies take on more time-based assignments while reducing costs of permanent hiring.

“When it comes to conditions of working for temporary or sub-contracted staff, they differ across sectors, but primarily, legal obligations remain similar for contracted and permanent staff,” says e2e Business Solutions (a HR consultancy firm) director Yeshasvini Ramaswamy. “However, it helps the organisation because they are able to procure requisite and trained people.”

According to the fourth annual temp salaries primer report, compiled by staffing solutions company TeamLease Services, Bangalore, Mumbai, Kolkota and Delhi pay the best salaries in temping, with Bangalore paying the most in IT and HR, Mumbai in engineering and Delhi in sales. Ahmedabad, Bangalore, Mumbai and Delhi offer the best wage hikes.

However, the positive aspect of the slowdown is that many organisations in the country have been able to control high attrition rates, which prevailed across sectors like IT/ITes, banking, financial services and retail. Analysts say, less productive employees seem to be getting removed, while those with proven capabilities would be valuable to the employers.

Firms will find it easy to narrow down on requisite talent. “History shows that in turbulent times demand for temporary workforce grows steadily. This is quite contrary to the perm business where only critical positions are hired irrespective of the economic barriers. As the global economy gains traction, we will see employers regain confidence and become more willing to add permanently to their payrolls,” says a Manpower India spokesperson.