The Hindu Business Line : HR firms bullish on temporary staffing

WHO will be largest private employer in the next two to three years? If your guess is one of the large information technology firms such as Tata Consultancy Services, Wipro or Infosys, think again. It could well be a human resource firm.

There is a fierce competition among the country's top HR firms, such as Ma Foi Management Consultants, TeamLease and Adecco PeopleOne Consulting, to become the largest private sector employer by 2007. These companies are betting heavily on temporary staffing — employees working for a third party, but figuring on the rolls of the HR firm.

According to officials in these firms, recruitment by IT companies would slow or even stagnate by 2007, and it would be the HR firms that would surge ahead with temporary staffing, or, as they say, temp staffing or flexi staffing.

Globally, temporary staffing is a $140-billion industry and around 5 per cent of the workforce in any country is in temporary jobs. In India, there is a potential to create about 1-1.5 crore such jobs in the next five years, said Mr Ajit Isac, Managing Director, Adecco PeopleOne Consulting, a Bangalore-based recruitment firm.

The organised labour market in India accounts for 2.8 crore, or 7 per cent of the country's 44-crore workforce. The job market has nearly doubled in each of the last two years and is expected to grow as the economy continues to expand, Mr Isac told Business Line.

Adecco PeopleOne hopes to have about 60,000 temporary staff on its rolls by 2007. The company's temporary staff grew to 12,000 from scratch two years ago and is adding 1,500 every month, he said. The concept has been accepted at all levels, and it is now easy to convince companies, across industries, to use temporary staff, he said.

According to Mr E. Balaji, Executive Director-Staffing Solutions, Ma Foi Management Consultants, a Chennai-based HR firm, the company hopes to have over 40,000 temporary staff in the next two years. It now has over 10,700 such deputed employees, which is a 100-per cent jump from last year.

"We anticipate to grow at the same pace this year also; apart from adding numbers, our objective is to ensure that we work with good margins," he said. There is an increasing acceptance of temporary staffing as a mode of employment in the corporate sector. Multinationals, thanks to their overseas exposure, are early converts to this concept.

Ma Foi sees more Indian business houses taking this route for engaging people in a rapid fashion. "We are bullish on the outlook across all industry segments with particular focus on FMCG, telecom, retail finance and insurance. We are also seeing increasing adoption by the BPO industry, which is a strong vertical for Ma Foi. The company is adding 1,200 people every month," said Mr Balaji.

Mr Ashok Reddy, Managing Director of TeamLease, a Bangalore-based HR firm, said his company would be the largest private sector employer by 2007. "We have about 12,500 temporary staff on roll and are adding about 1,000 every month. The market is willing to take a lot more," he said.

The best paying vertical for temporary jobs is BPO-ITES (IT-enabled services) followed by information technology. In the future, BPO-ITES will be ahead of information technology and financial services in temp staffing.

According to Mr Reddy, temporary staffing is credited with 50 per cent of the reduction in unemployment in the US and 11 per cent of job creation in the European Union during the 90s.

A study of US companies says that companies using temporary staff (called contingent staff in the US) have higher margins, profits and market cap.

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