The Hindu Business Line : IT firms resort to ‘temporary’ hiring to beat US slowdown

Mumbai, Oct. 26The US slowdown has prompted Indian IT majors to increase hiring on a temporary or contractual basis; as a result, there is boost in demand for agencies that are in the short-term staffing business.

And IT professionals — especially those who have either been benched (for a long time) or recently retrenched — are giving in to this trend, even at a lower salary package, according to officials from temporary staffing companies.

Though Indian firms still have key IT projects in hand, future demand looks uncertain. And hence they are increasingly engaging with employees who are on the rolls of staffing companies on a per-project basis, said Ms Latha Rajan, Director, Ma Foi Consultants, the country’s largest staffing firm.

At the end of the project — which could stretch for 3 to 6 months — companies would decide whether or not they want to retain the temporary employees hired for it, depending on the demand situation at that time.

Mandates

“Whatever hiring targets that these companies had on a permanent basis are getting converted into contract-basis jobs,” said Mr Kishore V.N., Managing Director, Datacore Technologies, which is also in the temporary staffing business.

The company has a mandate to fill about 200 contract-based positions from 10 IT companies by December end. In the same quarter last year, the open position counter for Datacore stood at 70, said Mr Kishore.

Temporary hires are not getting assimilated into the IT company as used to happen during the boom days. “Instead, the period of the contract is getting extended; permanent absorptions are clearly not happening,” said Ms Rajan.

Conversion ratio

Since jobs are difficult to come by, IT professionals are forced to go in for such engagements. As a result, offer conversion ratio for temporary hiring companies has improved.

Twelve months ago, if five offer letters for temporary IT jobs were issued, only one person would join, said Mr Rajesh A.R., Vice-President, Teamlease Services. “Today, for every five temporary offer letters rolled, 2.5 persons are joining.”

He feels that majority IT companies are increasingly going in for such arrangements, especially to fill positions that require 3-5 years of experience. Agrees Mr Kishore of Datacore: “For us, the offer conversion ratio is up to 65-70 per cent, from 40-45 per cent about four quarters ago.”

Contractual hiring

IT professionals offering themselves for contractual hiring are generally those who have either been benched for over six months (in permanent jobs with IT firms) or those recruits whose joining dates have been postponed (several IT companies have delayed the joining dates for their fresh recruits by 6 to 12 months).

“Several employees who have been retrenched from mid-cap companies want to have the experience of working with tier-one companies, and hence many of them do not mind working on a temporary basis,” said Mr Rajesh of Teamlease.

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