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Temporary Relief

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Though most temp firms felt the brunt of slowing economic activity during 2010-2011, this year the industry is likely to gain traction compared to last year and  see positive growth. The staffing industry is also expecting a stable growth path in the next fiscal.

TeamLease, one of the major players, is all set to close the last quarter in March with a 20 per cent growth. The company expects a similar growth curve in 2012-13. "This year is definitely better. Though we wish to achieve 20 per cent growth in 2012-13; there are signs of potential slowdown. However, we would still grow at 15 per cent," says Rituparna Chakraborty, co-founder and vice-president, TeamLease India.

Given the current economic conditions, companies are hiring more temp workers for their manpower requirements, rather than committing to permanent staff. This provides flexibility to companies to adapt to the changing economic cycles. Some sectors, especially in IT services, retail, pharma and financial services in particular are showing a clear preference for temp staffing.

Temp salaries, too, are growing steadily as more corporates look for specialised skills and trained manpower. "The headcount along with salaries have increased. Last year a typical temp salary ranged between Rs 7,000 and Rs 7,500; this year, it is expected to increase to Rs 8,500 on an average," says Ravi John Loyal, regional head, Gi Staffing Services. The company recently added 25 per cent associate, and  expects their number to grow by 35-40 per cent this year.

Similarly, Namr Kishore, head of sales and marketing at Gurgaon-based Manpower India, which had an associate base of 70,000 in 2010, says the company added some 5,000 associates within a span of three months in 2011. "There might be a slowdown, but the recession is hyped. We will look at adding 10,000 more associates within one year." The company registered a growth of 24 per cent last year and expects the number to go up by 30 per cent this financial year.

In contrast, according to the latest Monster Employment Index, permanent hiring witnessed a 3 per cent annual growth rate — its slowest year-on-year growth — in 2011. Sanjay Modi, managing director, India, however, says that the current outlook on hiring will remain cautious in 2012, which is in line with the prevailing economic scenario. Sectors such as engineering, production, legal and marketing registered the slowest growth on an annual basis. The Indian Staffing Federation (ISF) predicts the staffing industry to grow at 10-15 per cent this fiscal, and the trend will continue in 2012 as well. "Companies have started offering more value-added services apart from being just liquidity providers. Some players have started offering services such as regulatory compliance and managed services," says Basudev Mukherjee, managing director, ISF.

ISF has also commissioned a study that will look into the size and scope of the temping industry as well as the opportunities and challenges facing it. This study will be shared in our annual event to be held in April this year.

(This story was published in Businessworld Issue Dated 06-02-2012)