Temporary Hiring in Indian Corporate Sector

The Indian flexi staffing industry employs 1.3 million people at present; they form 3% of the organized sector employment. This number is expected to touch 9 million and comprise of 10% of the organized workforce by 2025. About 79% of workers in the flexi staffing industry fall in the 21-30 year age group, indicating that flexi workers are hired mostly at entry and junior level positions. But in recent years, hiring CEOs, CFOs, CXOs and HR Heads in a temporary capacity has also gone up. These leaders are usually hired by smaller companies who require assistance for a particular period of time or for a particular project.

When the economy takes a dip, temporary hiring goes up. This is why temporary hiring went up around 2008 and is continuing today as well. This process is usually more important for service sector companies whose expenditure on manpower, as a proportion of total revenue, is often three times as high as that of manufacturing companies.

Why temporary hiring?
• Temp staffing offers companies the chance to variabilise their fixed costs, expand their footprint in low demand areas that need sporadic servicing, and handle peak loads.
• Keeping down administrative costs, remaining flexible and above all, retaining the capacity to respond quickly to volatile demand are the three major reasons why companies hire temps.
• But there are other reasons too. Some hold the high attrition rate at companies responsible – firms are reluctant to invest in hiring and training permanent employees, fearing they will soon after be snapped up by rivals. They would much rather get previously trained temporary staff.

 

Sources:

http://businesstoday.intoday.in/story/slowing-economy-fuelling-need-for-temporary-staff/1/189700.html

http://economictimes.indiatimes.com/jobs/it-ites-and-retail-companies-hiring-more-temporary-employees/articleshow/13465053.cms

http://timesofindia.indiatimes.com/tech/jobs/Indian-ITs-temporary-hiring-to-double-by-2020/articleshow/20346331.cms

http://www.business-standard.com/article/management/temporary-staffing-can-variabilise-fixed-costs-manish-sabharwal-113102000611_1.html