With demand for consumer services seeing a revenge rebound and manufacturing sector order books growing healthily, India will continue to record an uptick in the demand for flexi or temporary staffing this year, according to the Indian Staffing Federation (ISF).

Lohit Bhatia, President of the ISF, said the outlook for temporary hiring remains positive after the industry added a record 21.9 per cent new workers in 2021-22. “The trend for flexi staffing is continuing so far this fiscal year, and initial feedback from the broader industry is that this will persist through 2022-23 as we emerge from Covid-19,” Bhatia said in an interaction with BusinessLine.

Growth prospects

He attributed the demand to an upswing in the manufacturing sector and parts of the economy, including malls, cinemas and hotels, that are now operating at full capacity after a long period of partial functioning during the pandemic.

“The entire consumer space has emerged from Covid, and now they are all working 100 per cent capacity. This year, we are bullish that retail and consumer space will do very well, and people will come out and spend,” he said, adding that the festival season should also see good demand.

“The advent of 4G communications as well as e-commerce firms has fuelled a huge amount of logistics growth. All this creates growth for e-commerce and telecom,” he noted, adding that the ISF is bullish on the IT sector for the next few years.

The staffing industry added 21.9 per cent of new workers in fiscal 2021-22, sharply exceeding the workforce demand in the pre-pandemic years, according to the Flexi Staffing Industry Annual Report 2022 of the ISF.

The Federation is expected to come out with its first-quarter numbers on staffing demand by the end of this month or early August. Bhatia noted that the 21 per cent growth last fiscal was the highest ever growth for ISF.

Companies focus on temporary staffing & outsourcing

“Prior to Covid, we were growing 16.5 per cent year on year. We not only believe that Covid is behind us but also feel that formalisation of jobs is going on a big way,” he said. More companies are interested in temporary staffing and outsourcing rather than having all the employees on their own payroll.

“Not just private sector companies, even the government is very clear that unless you have an employee who is strategic and can grow every two to three years in terms of role, output and ability, it does not augur too much to have organisational employees on their payrolls,” he said.

Referring to the EPFO’s Payroll Data, he noted that almost 40 to 50 per cent of the new enrolments and jobs were being created by expert services, which consists of manpower agencies, private security agencies and small contractors.

“Our belief is that as India moves from 83 per cent informal employment to about 50 per cent formal employment in the future, many of these people will first start from an outsourcing or staffing companies,” he said.