What has been rated as the fastest growing human resource trend, the phenomenon of temporary staffing is finally catching up in India. While industry experts estimate employee leasing to be $140 billion business worldwide, the domestic staffing industry is yet to boast of big figures. The scenario is however about to change considering the fact that in the near future 2.5 to 3 percent of the workforce in the country will be hired on a temporary basis. The IT industry being a trendsetter of sorts, will witness a large percentage of such hirings in the next few years.
A “temp” is a temporary worker with an organisation who is on a third-party (staffing company) payroll. A well-accepted norm in global companies, many large Indian organisations are now hiring a part of their workforce from employee leasing firms. The reason is not too difficult to guess—as organisations focus on their core business strengths in a highly competitive environment, the non-core functions are outsourced. The manpower for the latter is provided by the employee leasing company. The contracts can range from three to six months, and there are no hassles normally associated with recruiting and retaining people.
“While so far, the leasing workforce was active in order to meet short-term assignments of companies to augment their workforce during peak periods or replace ‘leave vacancies’ or sudden terminations, the current trend has seen corporates going for leasing for specialised requirements,” demand for temporary workers has been fuelled by companies looking for greater workforce flexibility, faced with fast paced market changes, including changes in consumer demands and shorter product life cycles.
It is a known fact that most companies prefer temporary staff to permanent ones, furthermore there is a growing trend of outsourcing non-core functions to outsourced staff. These range from accounts, front-office, sales, marketing and back-end operations. AV International undertakes outsourcing for diverse sectors, including banking, telecommunications, FMCGs, IT, manufacturing and retail.The service spectrum caters to functional activities involving office administration, technical support, accounts and finance, HR support, marketing and sales.
Ameet Kadwadkar CEO of AV International, adds that in the IT industry, positions that are largely outsourced are people at the entry level like programmers, software engineers, networking and system administrators.
Types of services offered
Employee leasing companies offer a plethora of staffing solutions to their clients. Kadwadkar gives detailed explanation of the services that TeamLease provides. It includes:
Temporary staffing: Enabling the client to respond to short-term temporary and/or flexible manpower needs with specific skill set requirements or for supplementing the workforce. These services could be of a part-time, full-time or job sharing nature.
Temporary-to-permanent services: The client can hire associates as temporary employees for a trial period of employment; after a satisfactory trial period, a company has the opportunity to add a temporary worker to its permanent staff; by moving the employee from AV international payroll to that of the business client.
Long-term contract: Corporates can opt to enter into assignments for long-term and indefinite periods of time with AV International associates.
Managed services: AV International provides the onsite management of the contingent workforce at the client facility. It retains the responsibility for the supervision of the leased employees as well as the accountability for the results of the facility or function that have been leased.
AV International has managed services and has more than 460 people on contract employment. The company has 5 offices all over India.
Benefits to the organisation
The trend of temporary staffing has been popularised in India by MNCs who have been aware of the benefits in their experiences in other countries. The advantages are many. “The opportunity to concentrate on core areas as non-core areas are taken care by experts, benefits of scale, long-term cost benefits and a responsible employer image,” Renu G, general manager, workforce solutions India,AV International. “There is flexibility of employment, and ease of recruitment and replacements,” she reminds that statutory complexities are also taken care of by the staffing company.
Most industry experts agree that there are no flip sides to the arrangement, Mathur however points out that there is often a misconception that this is an extended payroll service.
Who constitute the growing number of leased employees? This question takes special significance in a country like India, where job security is an integral part of one’s psyche. The range is
astonishingly varied. “People who want short-term options, freshers wanting to gain experience, experienced people for specific experience and of late even top management guys for interim management options,” answers Mathur, not forgetting to add that it does provide a reasonable secure and dignified employment option.
the biggest beneficiary of temporary employment in India have been freshers. “The workforce available for such temporary employment has existed in excess of demand in the Indian context; and increasing manifold in today’s date given the dynamic market conditions, hence corporates are looking at leasing as the viable option to meet their short-term manpower needs.” The attitude of today’s workforce, he believes, is driven by rewarding employment opportunities coupled with career guidance and flexibility to choose the nature and duration of work. Furthermore, many employees choose temporary employment as an avenue to exhibit their talents to the client organisation, which could be a stepping-stone to a full-time permanent career. Temporary employment has often been an effective entry route into big companies.
And, is it possible to find top performers among the temps? “Yes, but one should remember that such people are employed typically for non-core areas and attracting top class talent for non-core is an issue, it has nothing to do with temp staffing as such,” answers Mathur. Reddy however claims that the leasing model attracts management talent far above the commodity-level.
Different from body shopping
Many often confuse employee leasing with body shopping. Reddy explains the difference: “Temping cannot be compared with body shopping as the former requires a much higher level of involvement by the outsourcing partner with the leased associates in order to manage and retain them.”
It is also not possible for traditional search firms to offer the specialised services normally provided by an employee leasing company. “The temping route requires specialised talent at the senior level. While traditional placement companies approach business in a transaction mode; workforce suppliers need to devote bandwidth through its people and process teams in servicing customers (the client and leased associates) on a recurring basis,” he states.
Temporary staffing is expected to grow exponentially in the country, in the near future. “It is the quality and ease of availability of manpower that would define the role employee leasing organisations stand to play, not only in non-core functions but also certain core business areas of organisations,” points out kadwadkar, adding that it is imperative for outsourcing partners to move from “only” employee leasing to complete end-to-end “activity management.” It is also necessary for outsourcing partners to be equipped with vertical and functional specialisations, with key differentiators customised to the Indian employment scenario.
In a recruitment market where the concept of full-time employment is increasingly becoming a thing of the past, temporary staffing is emerging as the viable option.
|Advantages of temporary staffing
- The opportunity for organisations to focus on core areas
- Flexibility of employment
- Ease of recruitment and replacement
- Long-term cost advantages
- Benefits of scale