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The Rise of India's Staffing Industry

Temporary Staffing Agencies India

Temporary Staffing Agencies have been involved in actively fostering a growing market for flexible staffing arrangements, signifying that this industry acts as a powerful shaper of the contingent labour market rather than simply being intermediaries between temporary workers and employers.

One of the direct impacts of a changing business ecosystem on companies has been on their talent demands. Rapid shifts brought in by technology and evolving market conditions have meant that companies have to often chart their talent demands beforehand and work proactively to stay ahead of the curve. This has meant that staffing firms have a larger role to play. But that is not the only reason why the staffing industry is slowly becoming an important partner in helping organizations meet their talent demands. 

Large companies are cutting down wage cost while start-ups want to hire executives only for a short period. Now, there is a solution for both. Flexi or temporary staffing is fast catching up in India with retail, logistics, FMCG and start-ups with the IT industry taking the lead.

Both employees and companies benefit from flexi-staffing. Employees can work as and when they feel, take a break and re-join when they wish to. Companies, for their part, recruit 'just in demand' or 'on a need' basis.

The Indian Staffing Federation (ISF), an association for the recruitment sector, said that flexi-staffing grew at 16.3 per cent to reach 3.3 million in 2018, out of the total 463.4 million total workforce.

This industry is expected to grow at 22.7 per cent to reach 6.1 million strong workforce by 2021, according to a report on the 'Impact of Key Reforms on Job Formalisation and Indian Flexi-Staffing Industry 2019' by ISF.

The process of temp staffing in India has proved to be one of the best business solutions in the industry, due to work flexibility and easy hiring. While companies can only hire extra employees when required, employees can develop good working experience by working with many companies, within a short period of time.

It's a win-win for both companies and temporary staff. Unlike the traditional hiring, temp employees can get training on new skills and opportunity to learn job functions from grass root level. For companies, recruitment and replacement is easy through temporary staffing.

Technologies like could computing, A.I., automation are redefining how processes have been traditionally executed. Many of such changes are slowly, but surely, becoming an indispensable component. A similar trend that impacts not just India but also talent companies globally is the use of AI to facilitate recruitment. Artificial intelligence is bound to be a strong ally of staffing firms when it comes to addressing issues like unconscious bias, data crunching, and hiring the best fit. As the range of talent issues that staffing firms deal with diversify, using AI would be a great advantage to find the best fit and ensure a seamless on boarding process.  It will significantly reduce the time it takes to source a candidate and will also enable staffing firms to understand the need of their clients better.  

In a report released earlier this year by Indian Staffing Federation 'Impact of Key Reforms on Job Formalization and Flexi Staffing' many important insights were revealed.

The report throws light on most effective reforms & initiatives and their subsequent effect across sectors in job formalization. It also identifies emergent challenges in the transition from informal to formal employment.

 Key Finding of the report:

  • At 3.3 million flexi staff in 2018, India emerges as the 5th largest worldwide for in flexi-staffing
  • The space grew at a CAGR of 16.3% in 2018 which will further accelerate to 22.7% from 2018-2021
  • 1.2 million added to flexi-workforce since 2015; further 1.53 million to be added over the next 3 years 
  • GST & demonetization were two key reforms to drive Job formalizations in 2016-18.
  • Reforms/policies to formalize around 11.03 million jobs between 2018-21
  • Current and imminent policies and reforms to catalyse the push from informal to the formal sector; over 7 million jobs formalized between 2015-18; 19.9 million workforce growth (formal sector) in 2015-18, includes shift from informal to formal
  • India to have 6.1 million flexi workforce by 2021; IT/ITeS leads adoption with 12.5% penetration
  • Flexi-staffing has the potential to be among the key job creation engines
  • Sustenance of reforms and policy changes is key to the momentum being maintained
  • Logistics, BFSI, IT/ITeS, retail and government - top 5 sectors employing over 55% of total flexi workforce by 2021

Studies have shown that the staffing industry is poised to grow significantly in the coming years. With the onset of rapid labour market changes, many businesses have had to proactively anticipate and tackle their talent issues. This is also the area where the staffing industry in India has, and is bound to play an important role. But such growth also hinges on how effectively they can adapt to some of the major shifts that are taking place in the industry right now. 

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