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Why Indian Companies are Choosing Temp Staffing In 2021

The Indian Staffing Federation (ISF) predicted in the year 2019 that the flexible workforce of India would double by 2021, and reach 6.1 million workers.This year the Economic Survey 2020-21 has confirmed this prediction by stating that India has emerged as one of the worlds largest countries for flexi-staffing. According to the survey, the very nature of work has changed, mostly thanks to the advancements of technology and organisational innovations. What else is driving the growth of temp staffing in the country? Lets explore the factors.

Evolution of New Economic Activities

The growth of the online retail business sector saw the gig economy grow. The emergence of eCommerce and online retailing platforms such as Flipkart, Amazon, Uber, Ola, Zomato, Urban Company, Swiggy, etc. has created a two-sided market. Many of these businesses are of Indian origin and have a huge market in the Urban cities of the country. With these new economic activities thriving, there is a sharp rise in demand for flexible staff to help them carry out their services.

Change in Technology

Digital platforms have become the primary enablers for creating employment today. They help job seekers discover relevant work and compare them with competitors. They can even read previous employee feedback and assess the working culture of the establishment. Job providers, on the other hand, can reach out to a vast pool of talent, and decide their compatibility with the organisation. They can do all this without involving any middlemen. These platforms have also created opportunities for the consumer and the service provider to interact in different and innovative ways.


The lockdown strengthened the concept of working from home and freelancing. While these styles of employment were already active from before, the pandemic brought it to the mainstream. It forced many companies to cut down on staff and outsource tasks to gig workers or freelancers. This enabled companies to see the benefits of flexible- staffing, such as reduced overhead costs and access to skilled services. Businesses are now more inclined towards temp staffing than ever before because it allows them time to focus on their core business functions. It also enables them to save on the total cost associated with hiring, onboarding, and training full-time employees. With temp staffing – they can choose resources based on their time-bound and project-bound needs.

Innovation in Organisational Structures

Many organisations have changed their very structure to accommodate increasing workloads and new-age customer demands. Many industries now hire project-specific consultants, who they may hire long-term if the collaboration is successful. There is also a demand for logo and content designers, web designers, and other such roles for white- collar workers. Then establishments, such as restaurants like Pizza Hut, or stores such as Big Basket, are leading the way in hiring delivery boys.

Emerging Business Models

Businesses are changing with the times. Today, the employer-employee relationship is different and there is space for flexibility. The contract between flexible staff and an employer is different from one between an employer and an employee. Its usually shorter and more task or role-specific. It may be temporary and contractual work. These jobs are sometimes irregular and even the pay structure differs. The payment is usually evaluated per piece and its negotiable, rather than a fixed salary. Flexible employees can choose when and where to work, as well as other abilities. The control over their work by the employer varies in degrees. Companies can see the benefits of this, as they can hire only when its required.

Shortage of Talent in Niche and Super-Niche Technologies

In some industries, there is a shortage of talent who can work with certain new and niche technologies. Flexi-staffing helps companies find talent with the relevant skills as per the project requirements. They can avoid benching, redeploying, or retraining employees. An example of this is in the IT and IT-enabled services (IT-eS) industries, where contractual hiring has increased by 22%.According to the Indian Staffing Federation (ISF), 12 out of every 100 employees in these sectors are contractual.

Roles such as DevOps engineering, UX designers, big data specialists, cybersecurity experts, cloud architects, embedded data scientists, and quantum computing, have found experts in the gig economy. Experts have said that low-code programming and skills such as coding in Python, Artificial Intelligence, data engineering, machine learning, and more, will move into the gig-economy as well. Flexi-staffing helps with niche skill requirements for a short-term project.

With all these factors powering the growth of temporary staffing, its here to stay. As the very structure of the job market and business practices evolve, so will the hiring processes. The more important aspect will be how to optimize these hiring processes for temporary and flexible staff in the future. Today, there are new laws governing temp staffing, and these employees are also eligible for social security benefits now. Will this keep temporary staffing as a cost-effective alternative? Only time will tell.