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REPOR

Q1. TEMPORARY STAFFING INDUSTRY April 2018

THE BIG
FIGHT
BIG FIRMS AND SMALLER PLAYERS
ARE PREPARING FOR THE ULTIMATE SHOOTOUT.
THEIR PRIZE? ....

THE
TEMPORARY
WORKER
CAN THEY DELIVER PERMANENT RELIEF
IN COST, EFFICIENCIES & FLEXIBILITIES?

PARADIGM
SHIFT
ARE WE WITNESSING THE 'HISTORY-FICATION'
OF OUR PERMANENT WORKFORCE?
ARE TEMPORARY EMPLOYEES THE FUTURE OF WORK?

THE RISE
GLOBAL INDUSTRY Pg 14
INDIAN SCENARIO Pg 38
KEY TAKEAWAYS Pg 61

TURNING TO
A TEMPORARY WORKFORCE.
FOR PERMANENT
BUSINESS ANSWERS.
By enabling savings in areas like cost, efficiencies and flexibilities –
Prepared by
temporary and contract teams are promising lasting business
solutions and staking claim as the future of work.
EVERY
INDUSTRY
FACES AN
INFLEXION
POINT AT SOME
STAGE OF ITS
LIFESPAN. FOR
THE STAFFING
SECTOR, THIS IS
THAT MOMENT
STAFFING IS HERE TO STAY.
OF TRUTH. WHOEVER ADAPTS
QUICKEST STAYS WITH IT,
THE REST WILL BE LEFT
LICKING THEIR WOUNDS.
THIS HOLDS TRUE FOR TALENT, BUSINESSES
AND STAFFING COMPANIES EQUALLY. THE
MESSAGE IS AS STARK AS IT IS CLEAR: IT’S
THE SURVIVAL OF THE SHARK-EST.”
Deepak Kaistha

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I CALL
UPON THE
NATION TO TAKE
A PLEDGE
TO MAKE INDIA
THE SKILL CAPITAL
OF THE WORLD

Sh. Narendra Modi


P R I M E M I N I S T E R O F I N D I A

strategy I execution I capital 04


01 05 6.6
ABSTRACT I 08 KEY SEGMENTS I 32 FLEXI STAFFING
MARKET I 52

02 5.1
INTRODUCTION I 10 CUSTOMERS OF
TEMPORARY STAFFING I 34 6.7
FLEXI STAFFING
MARKET I 54
03
5.2
THE EVOLUTION
GLOBAL MARKET
OF STAFFING I 16
SEGMENT I 36
6.8
MYTHS ABOUT TEMPORARY
3.2 STAFFING COMPANIES I 56
WORKFORCE SOLUTIONS 06
ECOSYSTEM I 20 INDIA
OVERVIEW I 40

6.9
3.2 BOOMING FACTORS
GLOBAL STAFFING 6.1 IN TEMPORARY STAFFING I 58
MARKET I 22 KEY TRENDS
IN INDIA I 42

04 07
GROWTH 6.2 KEY
DRIVERS I 24 FLEXI-STAFFING
SEGMENTS I 60
INDUSTRYWISE DEMAND I 44

4.1 6.3
KEY DRIVING 7.1
STATEWISE KEY
FACTORS I 26 MARKET SHARE I 46 TAKEAWAYS I 62

4.2 6.4 INDIAN STAFFING


CURRENT & KEY ORGANIZED 7.2 INDUSTRY I 38
FUTURE GROWTH I 28 PLAYERS IN INDIA I 48 CONCLUSION I 62
MESSAGE FROM
DEEPAK KAISTHA I 12
4.3 6.5
DEMAND FOR IMPACT OF GOVERNMENT
TEMPORARY STAFFING I 30 RULES AND REGULATIONS I 50 GLOBAL STAFFING
MARKET I 14

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ABSTRACT
WE ARE WITNESSING THE STATS CHECK OUT: BY 2020, THE
Little surprise, then, that large and small
companies are bracing for a showdown to win
THE RISE OF A WHOLE GLOBAL TEMPORARY STAFFING MARKET over the temporary talent pool. Smaller players
NEW SPECIES OF WILL BLOAT UP TO 3.4 MILLION PEOPLE, – so far garnering the lion's share of activity –
WORKER. ONE THAT'S AND IS SLATED TO GENERATE USD 185 will now be expecting far greater competition
YOUNG, COMES AND BILLION IN REVENUE. from the 'big guys', as the latter reposition
GOES WITH THE themselves to get the best out of the boom.
'SEASON', AND CAN What's driving the boom? Tangible and
HIT-THE-GROUND- overpowering advantages that both employer and
As both recruiters and talent get addicted to

RUNNING AT THE DROP employee are finding harder and harder to resist.
the 'temporary' model of work, are we
witnessing the 'history-fication' of our
OF A HAT. OR, AS THE permanent workforce? Can temporary teams
For employers and HR teams – especially in the
INDUSTRY CHOOSES manufacturing and consumer facing milieu – indeed deliver permanent relief to businesses?
TO CHRISTEN IT, temporary staffing is fast becoming Are contract workers the future of work?
'ON DEMAND'. synonymous with on-demand talent pipelines,
huge cost savings, hassle-free dynamics, AN INITIATIVE OF
Say Hello to the flexible formats and a talent pool that's both TBMGROWTH, THIS
'Contract', 'Seasonal' skilled and professional. REPORT ENDEAVORS
or 'Temporary' worker. For employees, the seasonal economy opens TO SCRATCH UNDER
Shifting consumer demands, shorter product doors to supplementary income, practical THE SURFACE TO PIECE
life cycles, urgency to optimize budgets and a work exposure, flexible lifestyles and a TOGETHER STATS,
growing trend of outsourcing non-core stepping stone to professional success. INSIGHTS AND
functions is witnessing the rise of this breed, Indeed, sizeable employment opportunities in PREDICTIONS UNDER
making it amongst the fastest developing talent sectors like e-commerce, retail, banking and ONE ROOF. THE BIG
marketplaces, globally. finance, technology and logistics are causing GOAL? TRIGGER
this tribe to consider temporary employment ACTIONABLE
as a viable, long-term strategy. PERSPECTIVES AND
LAY DOWN CLEAR
In India, the story isn't much different. According
ACTION MAPS FOR
to TMBG's sources, the Indian staffing sector is
STAKEHOLDERS
growing at a scorching pace of 35% annually,
ACROSS THE ECONOMY
and already accounts for a good 13% of the 2.5
WHO ARE IMPACTED -
trillion dollar GDP. It employs a staggering 3.4
IRREVERSIBLY - BY THE
million workers today, a number that should
PHENOMENON OF
touch 8.91 million by 2022. Powered by
'TEMPORARY TALENT'.
technology, the Indian staffing ecosystem is all
set to tide over its recent setback (an upshot of
demonetization and GST), and is widely
expected to run into favorable winds soon.

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2 INTRODUCTION
Amongst the biggest buzzwords in business STAFFING IS BOTH AN
circles today seems to be Temporary EXTENSION - AND A
Employees – the ones companies are REFLECTION - OF THE
increasingly looking at to supplement their AGE OF OPTIMIZATION
regular talent bench strength. They have good THAT WE RE LIVING
reasons to, too. Temporary employment brings THROUGH.
in a deep and unique basket of advantages, and
FAT-FREE, AGILE AND
staffing companies are providing ready answers
ON-TARGET – THAT, IN
via an easy and quick outsourcing model.
SHORT, IS THE MANTRA
OF STAFFING. ASPIRING MAESTROS WILL DO GOOD TO MASTER IT.
NOT SURPRISINGLY, BUSINESSES
ARE FOCUSING ON DEVELOPING A
BETTER UNDERSTANDING OF THE
FIELD – BE IT NEW-AGE HIRING
STRATEGIES, SUPPLIER MARKET
DYNAMICS OR BEST PRACTICES –
AS THEY PREPARE TO AMP UP
THEIR TEMPORARY HIRING MODEL
TO NURTURE COMPETITIVE EDGE.

Temporary staffing is a win-win solution for


both the employer and the worker. On the one
hand, it provides businesses unprecedented
savings and optimization in terms of costs,
process efficiencies (staffing companies bring in
a wide competency suite to the table),
unemployment claims and speed-to-hire. On
the other,workers find temporary recruitment a
quick and easy solution to contingencies like
income supplementation, career change
considerations or the need for practical
experience, amongst other things.

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WORD FROM THE CEO For companies, the miracle of technology and Gap in technology adoption, the ability to match
FROM PLAN B TO
STRATEGIC BUSINESS ASSET social media has been steadily bringing down talent to role in quick-time, prohibitive
the need for round-the-year, on-site teams for a government policies and unpredictable
The rise and rise of while now. There are large lakes of qualified economic winds are challenges to watch out for.
the Staffing Phenomenon talent out there willing to offer their services on
So far though, the good news has been
flexible terms anytime of the year. Real estate
Every revolution begins with a change in outweighing the bad.
costs are not going down anytime soon. And
mindset. Which is why, while the world hails the Companies are leveraging temporary staffing to
legal risks and paperwork hassles are mitigated
onset of the staffing revolution (make no look their biggest bogeyman –Uncertainty – in
considerably when a single-point staffing
mistakes, it is upon us), I'd like to focus on its the eye. Workers are seeing their dreams of a
partner takes the entire load off your shoulders.
genesis – the arrival of the 'Staffing Mindset'. work-life balance finally come true – one gig at
Temporary workers, on their part, find significant
What is a 'Staffing Mindset'? It's a smart change a time. And - as a creative, on-demand talent
value in being able to supplement their incomes
in the way we look at work. And a big shift in partner for organizations - staffing companies
flexibly, spruce up their resumes via vital work
focus. From 'Getting people to fill up chairs and are gearing up for more revenues this year.
exposure, or be a part of meaningful corporate
cabins' to, simply, 'Getting things done'. Whichever avatar you play in the new staffing
missions on their own time and terms.
Look closer, and you'll notice that the staffing universe - client, worker or staffing partner –
mindset is an upshot of the age of 'super UNQUESTIONABLE, ALL-ROUND get ready for disruption. One that will open
BENEFITS ARE NOT JUST DRIVING gateways of faster, and smarter, growth.
optimization' that we are living through. A time
PROFITS, ENDORSEMENT AND
when everything from accounts to operations to RECOGNITION FOR STAFFING ACROSS So long as you keep your 'Staffing Mindset' on.
marketing is being hauled through the scanner, INDUSTRIES LIKE E-COMMERCE, IT,
HEALTHCARE, HOSPITALITY,
debated in granular detail, and refined brutally MANUFACTURING, BFSI. IT IS
till we arrive at the holy grail: A sustainable ENGENDERING ITS OWN ECOSYSTEM
OF BEST-PRACTICES.
model that delivers maximum value at minimum
cost, hassle and energy. Deepak Kaistha
Enterprises are leveraging temporary staffing Managing Director & CEO
AND THAT, IN SHORT, strategically to go global and diversify into new
IS WHAT TEMPORARY STAFFING markets and geographies. Outsourcing is gaining
IS ALL ABOUT. never-before acceptance as a business process.
The driving force behind the staffing mindset – Enterprises are bracing to re-adjust their stance
or, if you will, revolution - is simple: Businesses to engage entrepreneurial millennials, the next
want more control over their outcomes. People big workforce demographic in staffing.
want more control over their lives. Contingent Candidate marketing is rising in prominence.
hiring - or temporary staffing, as it is also called - And for staffing companies, escalating
is the breakthrough answer that bridges the two competition means that the margin for error
wish-lists. (when it comes to finding the right talent-role
match) is dwindling fast.
THE RISE
The phenomenon of temporary staffing isn’t restricted to a
country, niche or industry. In its scope, spread and dynamic, it is
well and truly global today.
3 THE
EVOLUTION
OF
STAFFING
The staffing industry had its genesis in the It was technology – the internet, specially Today, from job boards to social media
1940’s. It got a fillip after World War II , when - that took the staffing industry to the referrals to AI driven bots, there are more
urban housewives started seeking part-time next level. As job-seekers turned online channels than ever for hirers and talent to
employment. In the 70’s, ‘Job shops’ provided natives and recruiters got more and more meet. Applicant tracker systems are ironing
contractual jobs to candidates who were digital savvy, new connections were out roadblocks in process flow management
known as ‘jobbers’. The staffing industry of the being made, and new conduits of for staffing companies.
70’s & 80’s – while small in size, was engagement were discovered.
considerably specialized. Jobbers were
usually technicians, engineers, drafters and RELATIONSHIP BUILDING Remote working and outsourcing are adding

designers – in other words, the terrain was BETWEEN RECRUITERS AND steam to the movement. And a clutch of

technical and skill based. Not all industries


JOBBERS - WHO GRADUALLY benefits – from boosted performance to

engaged contract level workers this way :


BECAME DEPENDENT ON less cost to 24X7 talent pipelines – are
STAFFING COMPANIES – GAVE A slowly but surely catapulting short-term
Amongst the ones that did, defense and
PUSH TO THE MOVEMENT. staffing as a long-term solution for
aerospace were prominent hirers.
organisations and talent alike.
SOMETIME IN THE 1980’S,
TEMPORARY STAFFING
COMPANIES STARTED
DIVERSIFYING FROM THE
TECHNICAL SECTOR INTO
MARKETING, PRINTING,
TELE-CALLING.

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3.1 WORKFORCE
SOLUTIONS
ECOSYSTEM

MAPPING STAFFING
INTERCONNECTED INDUSTRY ANALYSTS
NETWORKS OF
THE UNFURLING
NEW WORKFORCE WORKFORCE SOLUTIONS ECOSYSTEM
UNIVERSE.
Advancements in technology, emerging
new trends and fast mutating practises
means that the workforce solutions
ecosystem – comprising Talent Acquisition
Technology, Process Outsourcing,
Payrolling / Compliance, Contracting / HRO PEO
Consulting and Other Workforce Solutions - INDEPENDENT
BPO CONTRACTOR
is undergoing tumultuous transformation.
COMPLIANCE
MSP
For stakeholders, this presents threats
RPO PAYROLLING
and opportunities in nearly equal
measure.

RCE SOLUTIONS
Ancillary
HR Services STAFFING Directly Sourced
HR Consulting Temporary Staffing Contingent Workers
(Temps/
Outplacement Place & Search
Independent
Testing Contractors/

O
Freelancers)
HR Tech

RKF
Training & SOW Consulting

O
Accredition Services

W
Online Staffing

ER
ONE THING IS CLEAR: THE MOST Platforms
VMS

H
RESPONSIVE AND ADAPTIVE PARTY

OT
ATS Crowdsourcing
- AND NOT NECESSARILY THE ONE JOB BOARDS Online Work Services
THAT’S BIGGEST OR STRONGEST - Human Cloud
WILL EMERGE VICTOR.

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3.2 GLOBAL
STAFFING
MARKET

GLOBAL
STAFFING
MARKET
NEW METAPHORS, AT WORK That, coupled with the traditionally high costs
of permanent teams, is causing corporate
Globally, seasonal workers are
leaderships to lean-in towards short-term
driving unique value for businesses,
teams for long-term headways. And redefine
by ushering a customizable mix of
the very fundamentals of ‘smart work’.
benefits to the table.

86.5%

GLOBAL PERMANENT STAFFING MARKET


13.5%
GLOBAL TEMPORARY STAFFING MARKET

Source:
Staffing Industry Analysts
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4 GROWTH
DRIVERS

WHY DO COMPANIES
PREFER TEMPORARY
STAFFING?
IMPROVED PRODUCTIVITY BIG SAVINGS
Saddling full time employees with too much Statistics confirm that the average cost of a new
work can lead to loss of motivation, burn-out hire is growing. When one factors in recruiting,
and reduced productivity. Bringing in temporary training and benefits, the costs add up quickly.
employees can help relieve the burden on full Temporary hiring cuts through these deterrents.
time staff.

11TH HOUR FIX MORE SAVINGS ON THE KNOWLEDGE


When full time employees call in sick at the WORKERS COMPENSATION EDGE
last minute, a staffing company can provide Temporary staffing companies save the With their full-time focus on the domain –
the much-needed relief by filling the gap administrative costs of handling workers which makes them up-to-speed with the latest
with temporary workers. compensation claims. This is especially true of trends and changes in laws and regulations,
employees that are sporadic or seasonal. The for instance - staffing agencies tend to
COMPANIES THAT other money saving aspect is the reduced possess significant domain knowledge and
TAKE THE EFFORT compensation deposit of a worker. expertise as compared to the internal HR team
TO NURTURE
of a small business.
RELATIONSHIPS An increase in temporary labor translates to a
WITH THEIR decrease in a company's payroll, which lowers
TEMPORARY workers' compensation premiums, helping
STAFFING companies save substantially.
PARTNER TEND
TO GET QUICKER IN THE TEMPORARY STAFFING
RESULTS. SCENARIO, WORKERS
COMPENSATION INSURANCE
WORKS ON A 'PAY-AS-YOU-GO'
FORMAT, AND COMPANIES DO
NOT HAVE TO PAY MORE THAN
IS NECESSARY.

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KEY
4.1 DRIVING
FAC T O R S

OTHER DRIVING
FACTORS FOR TEMPORARY
THE CITY FACTOR STAFFING ARE:

AS NEW CITIES ARE BORN, AS THE Newly relocated population FLEXIBLE & COMPLIANCE WITH
OLD ONES GROW BIGGER, AND AS 'testing the waters'. AGILE WORKFORCE REGULATIONS
METROS RISE IN STATURE -
ESPECIALLY IN DEVELOPING Newly unemployed population, or one that's
between jobs.
NATIONS LIKE INDIA, INDONESIA,
MALAYSIA, BRAZIL, AND MEXICO – Population that's available for seasonal
THE DEMAND FOR TEMPORARY employment only.
EMPLOYEES ACCELERATES.
Population in college and looking for practical
career experience.
In places like UAE, where there are big
investments taking place, the demand Newly graduated population in need of
experience before starting a full-time job.
for temporary workers is skyrocketing.
Staffing firms, on their part, are utilizing Population interested in learning new skills
the opportunity to broaden their scope and possibly changing careers.
and scale.

IMPROVE ACCESS
PRODUCTIVITY TALENT

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CURRENT
4.2 & FUTURE
GROWTH

CURRENT &
FUTURE GROWTH
THE MAIN FACTORS INFLUENCING THE GROWTH OF THE STAFFING INDUSTRY GLOBALLY, ARE:

1 2 3

ECONOMIC LEGAL HEALTHCARE


Staffing drives significant economic As a Single Point of Contact, Staffing By eliminating the bulk of
benefit for companies - from service providers mitigate legal Healthcare expenses,
savings on on-boarding / off- liabilities (including sexual harassment Staffing companies are
boarding costs, training expenses & discrimination) for businesses, helping businesses tide
and infrastructure layouts. freeing the latter up to grow faster. over the rising challenges of
cost, smartly.

TODAY, ROUGHLY 10% OF THE WORKPLACE IS CONTINGENT, AND TBMGROWTH PREDICTS THAT BY 2020
THE STAFFING INDUSTRY WILL CONSIST OF 61 MILLION EMPLOYEES, $581 BILLION IN GLOBAL TEMP
REVENUE, AND 6.2% TEMP HELP PENETRATION. BY 2020, BETWEEN 15% AND 25% OF THE WORKFORCE WILL
BE CONTINGENT AND WELL OVER 20% OF COMPANIES WILL BE UTILIZING STAFFING FIRMS.
According to staffing industry analysts (sia), the staffing industry is expected to grow substantially by 2020.
They figure this growth will be a result of many factors, but primarily the need for a flexible workforce, and
the desire from workers for mobile, educational and flexible careers.

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DEMAND FOR
4.3 TEMPORARY
STAFFING

THE FOLLOWING
DOMAIN-AGNOSTIC
FACTORS ARE ALSO
RESPONSIBLE
FOR SPIKING UP
THE DEMAND
FOR TEMPORARY
STAFFING IN THE
MARKET, ACROSS
SECTORS.

Increasing cost of employing full-time workers as it


includes the rising cost of benefits and other
overheads. It is enhancing the opportunities for
A
part-time workers and independent contractors.

The latest technology has enabled a mass


supply of part-time employees to find a demand
commoditized services.
B

C
Establishing a growth driving brand
which is trustworthy.

TEMPORARY EMPLOYEES ARE CRITICAL RESOURCES


THAT CAN GENERATE LONG-TERM VALUE
AT A VARIETY OF LEVELS
EFFICIENCY, FLEXIBILITY AND COST.

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5 KEY
SEGMENTS

KEY GLOBAL
PLAYERS
BIG PLAYERS HAVE BEEN
MAKING STEADY AND SOME OF
STRATEGIC MOVES IN THE THESE
GLOBAL STAFFING SPACE FIRMS
FOR A WHILE NOW, THE TOP THREE
PLAYERS IN THE GLOBAL STAFFING
POSSESS
PLAYGROUND HAVE BEEN ADECCO, THE ABILITY
MANPOWER AND RANDSTAD. TO TAKE
Cumulatively, their total revenue compares to ADVANTAGE
the rest of the '17 Houses' put together (when
one looks at the Top 20). Other players making
OF
a mark on the global scene are Kelly Services, EMERGING
Allegis Group, Recruit, KNF&T, Aerotek, Roth MARKET
Staffing and Integrity Staffing Solutions.
OPPORTUNI-
The playground is expanding, with
TIES IN
new players from new countries INDIA.
and regions staking a claim to
That, coupled with their native capabilities
prominence on a global stage.
to crank up productivity at short notice, is
expected to stimulate market dynamics.

KELLY
KNF&T RANDSTAD ADECCO AEROTEK
GLOBAL NAMES SERVICES

IN TEMPORARY
STAFFING INSIGHT ROBERT ROTH INTEGRITY HH
GLOBAL HALF STAFFING STAFFING STAFFING

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CUSTOMERS
5.1 OF TEMPORARY
STAFFING

THE KEY DOMAINS RESONATING


CUSTOMER WITH THE RISING
SEGMENTS TEMP STAFFING OPPORTUNITY.
OF TEMPORARY
STAFFING
THE UNIQUE BENEFITS OF
TEMPORARY OR CONTRACTUAL
EMPLOYMENT ARE FINDING
RESONANCE ACROSS
INDUSTRIES. SOME SECTORS
THAT ARE LOOKING AT
TEMPORARY STAFF AS A HEALTHCARE INFORMATION
STRATEGIC GROWTH DRIVER ARE TECHNOLOGY
E-COMMERCE, IT, TELECOM,
HEALTHCARE, RETAIL, TRADE &
INDUSTRIAL, FMCG AND
HOSPITALITY.
That apart, legal, apparel manufacturing and
office administration are domains that have
been increasingly turning to contract workers FMCG E-COMMERCE TELE-
in recent times. (FAST MOVING & RETAIL COMMUNI-
CONSUMER GOODS) CATION
The common thread connecting them all is a
positive outlook – and staffing, both as a trend
and an approach - can only go up.

TRADE & HOSPITALITY


INDUSTRIAL

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GLOBAL
5.2 MARKET
SEGMENT

THE TOP COUNTRIES IN


GLOBAL TEMPORARY STAFFING
MARKET DURING 2017-18
ARE LISTED IN THE GRAPH
SEGMENT (IN MILLIONS)

With 14.4 million temp staffers in 2017, the US SOURCE: TBM Growth
has traditionally been the biggest home to
temporary workers, followed by China (8.1
5 .3
million). India, Japan and France brought up 1
the rear. However, when it comes to clocking a
growth rate basis the national GDP, it was India
that led the field with China in second place –
reflecting the healthy growth of contract
staffing drivers in both the countries.
0 .9
1
Looking forward, one expects USA to
retain its numero uno status in the space
and is slated to employ over 15 million
temporary workers in 2018-19, with
China again in second spot. In the
coming time, it is these two countries 3.4
that will see maximum contribution by
temporary workers.

3.1
US

CH
INA
IND 2.2
IA
JAP
AN
FR
AN
CE

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THE RISE
The practise of temporary staffing in the Indian context goes back
a long way. With the big push of technology, outsourcing and
adoption, however, temporary staffing has finally hit ‘inexorable
ascent’ mode in the country.
6 INDIA
OVERVIEW
INDIA -
TEMPORARY EMERGING
STAFFING HOTSPOT FOR
IN INDIA TEMPORARY
AN OVERVIEW WORKERS
As a 'way to hire', the practice of temporary or THE EVOLUTION OF TEMPORARY
contractual employment isn't new to India. THE GDP GROWTH OF INDIA IS RISING YEAR-OVER-YEAR
AND CONTRACTUAL STAFFING IN
Indeed, 'seasonal hands' have been employed AND THE OPPORTUNITIES TO FILL THE VACANCIES
INDIA IS BEING DRIVEN BY
in fields like architecture, art, education and THROUGH TEMP STAFFING WILL PROCEED WITH A LINEAR
INDUSTRIES ACROSS THE
construction since ages. In more recent times, GROWTH IN THE FOLLOWING YEARS.
ECONOMY, WITH BOTH
temporary hiring has been leveraged to STARTUPS AND ESTABLISHED
advantage by sectors like manufacturing, PLAYERS ESSAYING LEAD ROLES
hospitality, oil & gas and a few others. AS THEY ENGAGE 'TEMP
However, the Indian staffing sector first hit the WORKERS' IN BULK.
headlines – as it were - when it successfully GDP GROWTH RATE INDIA VS GLOBAL (%)
supported the IT boom in India, matching AND DESPITE THE PRESENCE
gargantuan volume expectations almost OF BIG NAMES, IT IS THE
overnight. The milestone did not go unnoticed SMALLER – TYPICALLY MORE 7.4%
AGILE AND RESOURCEFUL –

2018E
by other sectors. Before long, players in spaces
like e-commerce, retail, healthcare, telecom
STAFFING FIRMS THAT ARE 3.9%
CATERING TO THE LION'S
and BFSI had thrown their hats in the ring. And SHARE OF THE MARKET PIE.
tasted success.

Today, despite being nascent (when compared Big benefits for businesses, a 6.7%
to more mature markets around the world) and tech savvy population, shifting

2017
largely unorganized, the staffing sector in India attitudes, the rise of outsourcing, 3.7%
is riding an unstoppable juggernaut. The stats and supportive laws are the
recount a fascinating story: Seasonal or favorable winds that are
temporary staffing already accounts for nearly expected to keep the 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
13% of the country's 2.5 trillion dollar GDP. India' momentum going. And make
temporary workforce economy employs 3.4 temporary or seasonal staffing a India Global Source: IMF
million workers, a number that should touch a viable, profitable and
more-than-healthy 8.91 million by 2022. By sustainable talent strategy for
2025, contract staffing is likely to account for corporates, M/SME's and start-
over a tenth of India's formal sector workforce. ups – sooner, rather than later.

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6.1 KEY TRENDS
IN INDIA

FACTORS FUELLING
THE TEMPORARY STAFFING
MOVEMENT IN INDIA.
Every revolution has its propellers. The growing Temporary Staffing trend in India is no exception.
Its inexorable surge rests on more than one pillar. Here’s a snapshot of the forces defining the
KEY TRENDS Temporary Staffing terrain in India.

IN INDIA
WHILE IT IS SLATED FOR A
BOOM GOING FORWARD,
IT WAS FROM 2014 THAT

01
TEMP STAFFING STARTED Fatser economic growth in India during 2017
will continue in 2018 whcih will propel the
TO GROW, AS COMPANIES temp staffing business in india. According to
STARTED HIRING IMF, the growth is 7.2% in 2016-2017 and it is
expected to be 7.7% in 2017-2018.
TEMPORARY EMPLOYEES
IN HIGHER NUMBERS.

02
Technology trends and tools have been India’s online hiring activities increase by 6% in February 2018. “This
driving cross-sectoral growth when it comes growth is primarily driven by non-IT sectors like oil and gas, BFSI,
industrial products, construction and automobile. The IT sector
to Staffing in India. Fresh candidates are the continues to be under pressure, we can expect this volatility to
primary target audiences for employers, with continue for a few more years before it moves north.
the latter providing them meaningful
opportunities to gain vital experience and

03
bolster resumes.
The key staffing firms like Adecco is investing
more in digital technology as employers
Training candidates up has been a cost-
increasingly seek more flexible staff to
effective proposition so far for companies, but respond to swings in demand, and carry out
more project-based work.
may need a re-look for longer term projects.
India's biggest e-commerce companies -
Flipkart and Amazon - have contributed
significantly to the rise of India's temporary
staffing market, so far. 04 Growth and investments, capacity creation/ expansion and
innovation are the major drivers of temporary or contractual
sales jobs in FMCG, FMCD, Retail and E-commerce.

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6.2 FLEXI-STAFFING
INDUSTRYWISE DEMAND

INDIAN
FLEXI-STAFFING: D U S TRY
N
R R ENT I D
INDUSTRY-WISE C U
E D E MAN I N I N DIA
WI S
DEMAND S T A FFING
EMP
With growing awareness and economic FOR T
growth, penetration of flexi-staffing is rising ACT URING
MANUF
across industries. Manufacturing, BFSI, FMCG
and retail ( the latter including e-commerce) BFSI
IL
G & RETA M
still accounts for a majority of the action. FMC T E LECO
N D
TICS A
The Manufacturing sector alone commands a LOGIS
S
third of the engagement. Logistics, IT/ITES and IT/ITE
others bring up the rear. Fast emerging trends RS
OTHE
like e-commerce and associated services (such
as Logistics), ever-rising demand for flexible
and professionally compliant teams, an
evolving legal terrain and growing acceptance
amongst the talent force are all factors 30
spearheading the boom.
25

13
RETAIL FMCG E-COMMERCE HOSPITALITY

11
10
11

MANUFACTURING TELECOM PHARMA AGRICULTURE


Source:
TBM Growth

strategy I execution I capital 42


6.3 STATEWISE
MARKET SHARE

TEMPORARY
STAFFING IN
INDIA:
STATE WISE MARKET SHARE
While temporary staffing as a smart growth
practise is finding resonance in industries and
companies pan-India, it is the Delhi-NCR
region that is witnessing the lion’s share of
5%
action – both in terms of adoption 3.0
and demand.

States like Karnataka, Maharashtra and Gujarat


are the other prominent hotspots on the Indian
temp staffing map. 4%
1.7

.01%
1

NCR
HI/
4% DEL
0.9
NA
RYA
HA
A
.59% ATAK
0 RN
KA
HTRA
S
ARA Source:
H
MA TBM Growth

JRAT
GU
strategy I execution I capital 44
6.4 KEY ORGANIZED
P L AY E R S I N I N D I A

BIG FISH
OF THE INDIAN
STAFFING
INDUSTRY
TEAMLEASE
THERE ARE MORE THAN
10,000 UNORGANIZED
PLAYERS IN THE TEMPORARY INFO EDGE
STAFFING MARKET IN INDIA. (ONLINE QUESS
PORTAL)
With industries like retail, consumer goods, e-
commerce and logistics bracing to experience
high demand of temporary staffing workers,
that's where the big players are focusing.

ALTHOUGH THE BIG NAMES ARE


REPOSITIONING THEMSELVES FOR A
GLOBAL
GREATER SHARE OF THE BURGEONING
TEMPORARY STAFFING PIE, THEY
INNOVSOURCE BigFish ADECCO
SOLUTION
CURRENTLY ACCOUNT FOR NO MORE
THAN ABOUT 7.5% OF ALL TEMPORARY
HIRES IN INDIA. THE REST IS BEING
HANDLED BY SMALL AND SMALL-MEDIUM
STAFFING FIRMS.

Low entry barriers, the rise of social media, easy


access to advanced technologies and the
relative lack of regulation has made it easy for
small and medium staffing firms to play a IKYA RANDSTAD
central role in the staffing sector in India.

With the enervating effects of GST and MANPOWER


GROUP
demonetization on the wane, smaller players
are ready to disrupt the space in a bigger way
than ever.

Their small size lends them the agility, flexibility


and responsiveness to deliver solutions in quick
time, and meet overnight demand
easily. These factors are expected to fuel their
rise further in the coming time.
strategy I execution I capital 46
6.5 IMPACT OF GOVERNMENT
RULES AND REGULATIONS

IMPACT OF
GOVERNMENT
RULES AND
REGULATIONS
Growing unemployment is emerging as a In the recent budgetary session, Mr. Arun Jaitley Currently, fixed-term (temporary / contractual)
political challenge, forcing the government to (Hon'ble Finance Minister of India) expressed employment is only allowed in the apparel
step up job creation activities. Government that, “the facility of fixed term employment will manufacturing sector. The cabinet had recently
actions are impacting the staffing industry in be extended to all sectors”. said it could be extended to footwear, leather
India, in particular, by Goods and Services tax This move would allow companies to hire and the accessories sector to help "attract
(GST) and Tax Detected at Source (TDS). workers for short-term assignments and large-scale investments at global scale.”
Staffing firms are expecting a TDS cut from 10% terminate their services when projects are The Indian government is in the process of
to 2% and it will resolve tax irregularities. The completed. altering Labor Laws which may allow industries
key challenge for temporary staffing firms, to employ contractual staffs. This step will
however, is Sales Tax. reduce the unemployment rate in India and
IN JANUARY 2018, THE UNION GOVERNMENT 3.65% boost the hiring rate.
OF INDIA HAS INDICATED A MINDSET

(PERCENTAGE)
REBOOT IN ITS APPROACH TO GENERATING
EMPLOYMENT, PROPOSING TO AMEND
3.60%
RULES TO ENCOURAGE FIXED-TENURE, OR
CONTRACT JOBS.

UNEMPLOYMENT RATE
The impact of GST in the staffing industry may
be a transient one, but it has increased the 3.55%
demand for temporary or contractual jobs
through organized temporary staffing firms.

The adoption of GST has changed the much 3.50%


needed pricing parity of staffing firms, both
MNCs and SMEs. The GST for staffing firms is
18% which only covers registered staffing
firms. This recent change by the government
3.45%
will cause unorganized players to convert 2014 2015 2016 2017 2018E
themselves into organized players.
Series 1 3.50% 3.50% 3.50% 3.60% 3.50%

SOURCE: INTERNATIONAL LABOUR ORGANIZATION

strategy I execution I capital 48


FLEXI
6.6 STAFFING
MARKET

IT FLEXI-STAFFING Niche skill-sets and Just-in-time requirements/


deliveries are the immediate needs why
Key areas of work where contract workers are
deployed are Infrastructure management,
MARKET IN INDIA IS companies are turning to their IT staffing Testing & Quality Assurance, New product
GROWING AT AN partners. In the future, on-time delivery and up- development and Application Support &
scaling will become decisive reasons as well. Maintenance. The projects they work on fall
ANNUAL GROWTH largely in domains like Mobile, Cloud
Based on revenue generation, some of India's
RATE 14-16% top staffing companies are SutraHR, ABC Computing, Automation, Machine Learning,

AND TBMGROWTH Consultants, Adecco India, AON Hewitt Cyber Security, Internet of Things, Data Science
& Analytics, Robotics, 3D Printing and Social.
HAS PREDICTED THE (previously Hewitt Associates), CareerNet,
Global InnovSource, IKYA Human Capital, Kelly
ANNUAL REVENUE Services India, ManpowerGroup India and
MOST SOUGHT AFTER LANGUAGES AND
SKILLS IN THE CURRENT DAY ARE JS.NET
OF INDIAN IT FLEXI- Randstad India. PHP, .NET-JAVA, IOSJAVA SCRIPT, ASP .NET,
STAFFING MARKET From the industry perspective, IT / ITES and .NET, JAVA -ANDROID.NET AND JAVA –UI

FOR THE YEARS 2018 Healthcare are the sectors with the maximum
demand for IT staffing. Start-ups and e-
WHEN IT COMES TO .NET. IN SAP, THEY ARE
SAP IT NETWORKING, SAP HANA AND SAP UI.
TO 2020. commerce, while currently at the bottom of that AND SAS, R, PYTHON AND SQL ARE IN-
list, are also the fastest growing. DEMAND IN ANALYTICS.
The success story of the Indian Flexi-Staffing BY REMOVING
industry is one of guts and glory, in equal UPFRONT COST
measure. While temporary and contract hiring COMMITMENTS AND IT FLEXI-STAFFING MARKET IN INDIA
has been an integral part of India's economy ($ BILLION)
BRINGING MORE
since time immemorial, staffing players started PREDICTABILITY TO
shifting their focus on IT staffing, specifically, HIRING BUDGETS, 5
after it became apparent that the latter delivers AN ON-DEMAND 4.27
much bigger margins as compared to other WORKFORCE FUELS
industries. The sector hasn't looked back, since. 4 3.78
INCREMENTAL
3.37
The Indian IT flexi staffing industry was worth GROWTH FOR 3.04
USD 3.04 billion in 2016-2017 – which is 28% of ORGANIZATIONS - 3
the APAC Flexi Staffing Industry and 4.8% of the QUITE APART FROM
global IT Staffing Industry. With the IT sector on LETTING THEM RE-
the surge, it is expected that the IT flexi staffing FOCUS ON THEIR 2
space will clock 18% growth per annum over CORE
the next few years (across top states and COMPETENCIES 1
Source:
sectors of the country), and emerge amongst AND BIG BUSINESS
TBM Growth
the top employment generators in the country. VISION.
0
2017 2018E 2019E 2020E

strategy I execution I capital 50


FLEXI
6.7 STAFFING
MARKET

THE AGE OF
FLEXI STAFFING
IS TRULY UPON US.
THE INDIAN IT FLEXI-STAFFING INDUSTRY
IS WITNESSING HEALTHY FISCAL AND
GROWTH ACTIVITY. IT HAS EXPERIENCED
A MARKET PENETRATION OF 6.8% IN FY17,
WITH TURNOVER TOUCHING USD 59
BILLION IN THE SAME PERIOD.

The momentum is expected to sustain going


forward, with TBM Growth’s experts pegging
pace of growth for FY18 at 18%, and
predicting turnover to cross USD 70 billion
the coming financial year.

In percentage
IT FLEXI-STAFFING GROWTH Source:
FORECAST (SECTORWISE) IN FY-18 TBM Growth

20
17.3%
15.8%
15 14.1%
12.7% 12.6%
11.5% 10.8%
10

05

0
IT/ITES BFSI Manufac- Chemical Oil Retail Healthcare Startup &
Turing and Gas Ecommerce

strategy I execution I capital 52


MYTHS ABOUT
6.8 TEMPORARY STAFFING
COMPANIES

MYTHS ABOUT HERE ARE SOME OF


THE MYTHS DOING
TEMPORARY THEIR ROUNDS IN
STAFFING THE TEMPORARY
COMPANIES STAFFING SPACE:
As with any new or emerging trend, the Temporary staffing agencies fill only low level positions.
Temporary Staffing space, too, has its share of
Temporary staffing agency translates to low ROI.
myths and illusions. On the one hand, this is
causing businesses to hesitate when it comes Temporary workers are unskilled.
to seeking help from staffing companies.
Temporary jobs are necessarily short-term / short-lived.
On the other, it is keeping top temporary talent
away from being considered for roles that are Temporary employees are not entitled to benefits.
perfect for them.
Temporary workers are not protected by labor and wage laws.

Temporary jobs make a resume look less attractive.

Temporary workers lose jobs


when the employer faces growth struggles.

LOW LEVEL POSITIONS GETTING A


ARE ONLY FILLED PERMANENT ROLE
by temporary staffing agencies is a very difficult task (for temp-to-hire)

TEMPORARY WORKERS LOW RETURN ON INVESTMENT


are unskilled on using a temporary staffing agency

strategy I execution I capital 54


B O O M I N G FAC T O R S
6.9 IN TEMPORARY
STAFFING

BOOM FACTORS THE INDIAN


OF INDIAN
TEMPORARY
STAFFING SECTOR
STAFFING IS AT INFLEXION
DRIVING IT IS A MIX OF
POINT – AND ON THE
TANGIBLE FACTORS THAT, THRESHOLD OF A BIG
TOGETHER, CAN POWER
COMPANIES AHEAD OF THE BOOM.
CURVE – FASTER THAN THE REST.
There's of course the all-powerful technology
AI AND MACHINE
angle, where emerging instruments like LEARNING TOOLS
Artificial Intelligence and Learning Tools are FOR HIRING
revolutionizing everything from search to
application tracking to candidate experience CROWD
and beyond. SOURCING
RECRUITMENT
But that's hardly all. Trends like Crowd-sourcing CANDIDATE
SCREENING
are enabling recruiters to land candidates via
& EMPLOYER
never-before channels. New techniques and ONLINE
BRANDING
approaches like Virtual Reality are not only SOFT
THROUGH
helping companies attract top talent via smarter SKILL
VIRTUAL
candidate screening, but enabling better role- ASSESSMENT
REALITY
fitments than ever.

CONVENIENT NEW FEATURES LIKE ONLINE


SOFT-SKILL ASSESSMENTS ARE HELPING
THEM ACHIEVE SIMILARLY OPTIMIZED
OUTCOMES.

Source:
Indian Staffing Federation strategy I execution I capital 56
7 KEY
SEGMENTS

CHALLENGES CHALLENGES DRIVERS


& SUCCESS
FACTORS A INCREASED
COMPETITION
A TECHNOLOGY

CHALLENGES B MATCHING B DATA &


QUALITY ANALYTICS
With larger players re-positioning themselves for EXPECTATIONS
a bigger market pie and smaller ones bracing for
C APPLICANT C MERGERS &
a face-off, competition in the staffing terrain is DISHONESTY ACQUISITIONS
heating up. Amongst the hurdles that players will
need to cross are the ability to satisfy increasingly D KEEPING UP WITH D FUNDING
demanding clients, spotting dishonest TRENDS & PRACTISES
approaches by candidates, staying up-to-speed
with trends and best-practices, balancing costs E RISING E FAVOURABLE
COSTS POLICIES
and factoring in unplanned attrition that can
affect productivity of their clients.
F UNPLANNED
ATTRITION
SUCCESS FACTORS
As a growing industry, though, the tailwinds of
growth are stronger than the threats.
Technology – be it social, AI or mobile - is
disrupting the sector in a big way.
Sophisticated Data & Analytics capabilities are
helping staffing firms take smarter decisions.
Mergers, acquisitions and alliances are helping
firms re-position themselves better for
oncoming opportunities. A spike in angel
funders is injecting vital capital. And
favourable government policies are removing
knots and bottlenecks, paving the way for
untrammelled growth.

strategy I execution I capital 58


7.1 7.2

CONCLUSION
BUSINESSES TODAY HAVE
AN ALL-NEW EDGE.
AND IT CAN BE SUMMED
UP IN TWO WORDS:
TEMPORARY STAFFING.
No matter what the industry – e commerce,
IT, telecom, healthcare, retail, trade &
industrial, FMCG, hospitality, legal, textiles
or administration – companies and teams
are leveraging the power of Temporary or
KEY Contract Staffing as a strategic growth tool
TAKEWAYS to leapfrog ahead.

Globally, staffing firms have played a huge role in the Less legal hassles and paperwork giving organizations
THE IDEA IS WORKING As a bridge between companies and talent,
employment scenario - and in India alone, staffing firms even more reasons to turn to temporary teams.
AT MANY LEVELS. staffing companies will have a more important
have generated more than 5 million jobs over the last role than ever to play. The good news for
Last-minute solutions and boosted speed-to-hire are
decade. For companies, the pot of gold comprises huge
making recruiters and HR teams addicted to the them? The game is now being played on a
savings, anytime talent and reduced hassles.
Temporary staffing in India is growing at a healthy pace seasonal / temporary hiring model. level field. That's right: With traditional
For professionals, flexible employment, resume
of 25% CAGR, and is slated to touch 9 million workers advantages like legacy, size and budgets
Staffing firms will go from a 'provider of heads and building opportunities and greater work-life
(and represent 10% of organized workforce) in the gradually moving out of the equation,
hands' to becoming a strategic talent partner by helping
country by 2025. balance are the standout incentives. And with
businesses 'get things done'. everyone today has a fair shot at the
owners of staffing companies expecting their
High costs, inflexible arrangements and redundancy humongous (and fast growing) staffing pie.
An entire ecosystem will be created out of temporary firms to post fatter revenues faster, the future
(due to technology) of permanent workers – along with
workers, making it easy and practical for businesses to promises phenomenal growth for both big and
rise of outsourcing - are causing companies to focus on For staffing service providers, the rules of
find temporary workers anytime. small players in the sector.
a temporary workforce. engagement, and success, are simple:
Temporary models will enable better economies of
In addition, new labor laws are boosting the adoption of If you are creative enough to disrupt smarter,
scale for companies in the long-run.
temporary workers. agile enough to respond faster and
Temporary staffing is therefore promising a sustainable
Knowledgeable and efficient 'temporary candidates' are professional enough to deliver without
way to drive prolonged business growth performance in
proving to be a viable substitute for permanent staff. excuses, you will score big wins.
times of uncertainty and change.
Big cost savings are making temporary workers a
lucrative alternative for businesses not just over the
short-term, but the long run as well.

strategy I execution I capital 60


BUSINESSES CONSTANTLY RE- HERE’S A THUMB RULE:
INVENT THEMSELVES.
Make sure your staffing vendor is closely
SOMETIMES TO SURVIVE, aligned to your needs. Ensure they are ‘small
SOMETIMES TO OVERTAKE. SO and pliant’ enough to possess the kind of
WHAT HAPPENS WHEN ALONG agility imperative for on-demand, 11th hour
response. The best staffing companies are
COMES AN IDEA THAT LETS YOU resourceful with deep networks that ensure
DO BOTH? THE SMART, GRAB IT great role fitments. And not least, your staffing
WITH BOTH HANDS. partner needs to be driven by values like
commitment, collaboration and transparency.
Temporary or seasonal hiring may be a
As an ahead-of-the-curve player in the space,
relatively recent trend, but it is already being
we have been watching the rise and rise of the
hailed as the ‘future of work’. And the smart,
temporary staffing market from the inside.
are reaching out.
We’ve been closely following the way it is
transforming brands and Houses. We’ve also
Temporary employees are qualified, cost-
been witnessing the challenges and
effective and hit the ground running. By
frustrations of recruitment and procurement
delivering long-term value, short-term
teams trying to get a better handle over the
workers are turning the tenets of business on
situation, so that they can profit from it.
its head.

It’s no co-incidence, therefore, that by 2020,


the global temporary staffing pie will hit USD
185 billion in revenue. In India, the sector is
LET THIS EXCLUSIVE REPORT
growing at a blinding pace of 35% annually, BE A START.
and will account for nearly 9 million workers in
the same time. TO PERMANENT ANSWERS,
Corporate leaderships, procurement heads
NO MATTER WHICH BUSINESS
and HR teams are waking up to this YOU LEAD.
newfound edge pretty fast. But there’s one
final piece in riddle they still need to solve to
reap the benefits: How to choose the best
staffing vendor?

Anubhav Saxena
Executive Director

Harshdeep Singh Kohli


strategy I execution I capital
Partner - HR Staffing Solutions
talent hard to find

TBM-TALENT
ACTIVATING 5 DIMENSIONAL
GROWTH PERFORMANCE
WITH THE POWER OF TRANSFORMATIONAL
HIRING AT SCALE

RE-EXPERIENCE GROWTH WITH THE

POWER OF 5XD HIRING


EXECUTIVE | RETAINED | TECHNOLOGY - IT | STAFFING | END-TO-END RPO
HR PROGRAMS | PARTNER MANAGEMENT | EMPLOYEE ENGAGEMENT
PERFORMANCE MANAGEMENT | RECRUITER BRANDING

talent hard to find strategy I execution I capital 64


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