REPORQ1. TEMPORARY STAFFING INDUSTRY April 2018THE BIG Prepared byFIGHTBIG FIRMS AND SMALLER PLAYERSARE PREPARING FOR THE ULTIMATE SHOOTOUT.THEIR PRIZE? ....THETEMPORARYWORKERCAN THEY DELIVER PERMANENT RELIEFIN COST, EFFICIENCIES & FLEXIBILITIES?PARADIGMSHIFTARE WE WITNESSING THE 'HISTORY-FICATION'OF OUR PERMANENT WORKFORCE?ARE TEMPORARY EMPLOYEES THE FUTURE OF WORK?THE RISEGLOBAL INDUSTRY Pg 14INDIAN SCENARIO Pg 38KEY TAKEAWAYS Pg 61TURNING TOA TEMPORARY WORKFORCE.FOR PERMANENTBUSINESS ANSWERS.By enabling savings in areas like cost, efficiencies and flexibilities –temporary and contract teams are promising lasting businesssolutions and staking claim as the future of work.
EVERYINDUSTRYFACES ANINFLEXIONPOINT AT SOMESTAGE OF ITSLIFESPAN. FORTHE STAFFINGSECTOR, THIS ISTHAT MOMENTOF TRUTH. STAFFING IS HERE TO STAY. 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 INDIATHE SKILL CAPITAL OF THE WORLD Sh. Narendra Modi PRIME MINISTER OF INDIA strategy I execution I capital 04
01 05 6.6ABSTRACT I 08 KEY SEGMENTS I 32 FLE MAR02 5.1INTRODUCTION I 10 CUSTOMERS OF 6.7 TEMPORARY STAFFING I 34 FLE03 MARTHE EVOLUTION 5.2OF STAFFING I 16 GLOBAL MARKET 6.8 SEGMENT I 36 MYT3.2 STAWORKFORCE SOLUTIONS 06ECOSYSTEM I 20 INDIA 6.9 OVERVIEW I 40 BOO3.2 IN TGLOBAL STAFFING 6.1MARKET I 22 KEY TRENDS 07 IN INDIA I 42 KEY04 SEGGROWTH 6.2DRIVERS I 24 FLEXI-STAFFING 7.1 INDUSTRYWISE DEMAND I 44 KEY4.1 TAKKEY DRIVING 6.3FACTORS I 26 STATEWISE 7.2 MARKET SHARE I 46 CON4.2CURRENT & 6.4FUTURE GROWTH I 28 KEY ORGANIZED PLAYERS IN INDIA I 484.3DEMAND FOR 6.5TEMPORARY STAFFING I 30 IMPACT OF GOVERNMENT RULES AND REGULATIONS I 50
EXI STAFFING INDIAN STAFFING RKET I 52 INDUSTRY I 38EXI STAFFING MESSAGE FROM RKET I 54 DEEPAK KAISTHA I 12 THS ABOUT TEMPORARY GLOBAL STAFFINGAFFING COMPANIES I 56 MARKET I 14OMING FACTORS strategy I execution I capital 06TEMPORARY STAFFING I 58YGMENTS I 60YKEAWAYS I 62NCLUSION I 62
ABSTRACTWE ARE WITNESSINGTHE RISE OF A WHOLENEW SPECIES OFWORKER. ONE THAT'SYOUNG, COMES ANDGOES WITH THE'SEASON', AND CANHIT-THE-GROUND-RUNNING AT THE DROPOF A HAT. OR, AS THEINDUSTRY CHOOSESTO CHRISTEN IT,'ON DEMAND'.Say Hello to the'Contract', 'Seasonal'or 'Temporary' worker.Shifting consumer demands, shorter productlife cycles, urgency to optimize budgets and agrowing trend of outsourcing non-corefunctions is witnessing the rise of this breed,making it amongst the fastest developing talentmarketplaces, globally.
THE STATS CHECK OUT: BY 2020, THE Little surprise, then, that large and small GLOBAL TEMPORARY STAFFING MARKET companies are bracing for a showdown to win WILL BLOAT UP TO 3.4 MILLION PEOPLE, over the temporary talent pool. Smaller players AND IS SLATED TO GENERATE USD 185 – so far garnering the lion's share of activity – BILLION IN REVENUE. will now be expecting far greater competition from the 'big guys', as the latter repositionWhat's driving the boom? Tangible and themselves to get the best out of the boom.overpowering advantages that both employer andemployee are finding harder and harder to resist. As both recruiters and talent get addicted to the 'temporary' model of work, are weFor employers and HR teams – especially in the witnessing the 'history-fication' of ourmanufacturing and consumer facing milieu – permanent workforce? Can temporary teamstemporary staffing is fast becoming indeed deliver permanent relief to businesses?synonymous with on-demand talent pipelines, Are contract workers the future of work?huge cost savings, hassle-free dynamics,flexible formats and a talent pool that's both AN INITIATIVE OFskilled and professional. TBMGROWTH, THIS REPORT ENDEAVORSFor employees, the seasonal economy opens TO SCRATCH UNDERdoors to supplementary income, practical THE SURFACE TO PIECEwork exposure, flexible lifestyles and a TOGETHER STATS,stepping stone to professional success. INSIGHTS ANDIndeed, sizeable employment opportunities in PREDICTIONS UNDERsectors like e-commerce, retail, banking and ONE ROOF. THE BIGfinance, technology and logistics are causing GOAL? TRIGGERthis tribe to consider temporary employment ACTIONABLEas a viable, long-term strategy. PERSPECTIVES AND LAY DOWN CLEARIn India, the story isn't much different. According ACTION MAPS FORto TMBG's sources, the Indian staffing sector is STAKEHOLDERSgrowing at a scorching pace of 35% annually, ACROSS THE ECONOMYand already accounts for a good 13% of the 2.5 WHO ARE IMPACTED -trillion dollar GDP. It employs a staggering 3.4 IRREVERSIBLY - BY THEmillion workers today, a number that should PHENOMENON OFtouch 8.91 million by 2022. Powered by 'TEMPORARY TALENT'.technology, the Indian staffing ecosystem is allset to tide over its recent setback (an upshot ofdemonetization and GST), and is widelyexpected to run into favorable winds soon. strategy I execution I capital 08
2 INTRODUCTION Amongst the biggest buzzwords in business circles today seems to be Temporary Employees – the ones companies are increasingly looking at to supplement their regular talent bench strength. They have good reasons to, too. Temporary employment brings in a deep and unique basket of advantages, and staffing companies are providing ready answers via an easy and quick outsourcing model. 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.
STAFFING IS BOTH AN ASPIRING MAESTROS WILL DO GOOD TO MASTER IT.EXTENSION - AND AREFLECTION - OF THEAGE OF OPTIMIZATIONTHAT WE RE LIVINGTHROUGH.FAT-FREE, AGILE ANDON-TARGET – THAT, INSHORT, IS THE MANTRAOF STAFFING. strategy I execution I capital 10
WORD FROM THE CEOFROM PLAN B TO For companies, the miracle of technology andSTRATEGIC BUSINESS ASSET social media has been steadily bringing down the need for round-the-year, on-site teams for aThe rise and rise of while now. There are large lakes of qualifiedthe Staffing Phenomenon talent out there willing to offer their services on flexible terms anytime of the year. Real estateEvery revolution begins with a change in costs are not going down anytime soon. Andmindset. Which is why, while the world hails the legal risks and paperwork hassles are mitigatedonset of the staffing revolution (make no considerably when a single-point staffingmistakes, it is upon us), I'd like to focus on its partner takes the entire load off your shoulders.genesis – the arrival of the 'Staffing Mindset'. Temporary workers, on their part, find significantWhat is a 'Staffing Mindset'? It's a smart change value in being able to supplement their incomesin the way we look at work. And a big shift in flexibly, spruce up their resumes via vital workfocus. From 'Getting people to fill up chairs and exposure, or be a part of meaningful corporatecabins' to, simply, 'Getting things done'. missions on their own time and terms.Look closer, and you'll notice that the staffing UNQUESTIONABLE, ALL-ROUNDmindset is an upshot of the age of 'super BENEFITS ARE NOT JUST DRIVINGoptimization' that we are living through. A time PROFITS, ENDORSEMENT ANDwhen everything from accounts to operations to RECOGNITION FOR STAFFING ACROSSmarketing is being hauled through the scanner, INDUSTRIES LIKE E-COMMERCE, IT,debated in granular detail, and refined brutally HEALTHCARE, HOSPITALITY,till we arrive at the holy grail: A sustainable MANUFACTURING, BFSI. IT ISmodel that delivers maximum value at minimum ENGENDERING ITS OWN ECOSYSTEMcost, hassle and energy. OF BEST-PRACTICES.AND THAT, IN SHORT, Enterprises are leveraging temporary staffingIS WHAT TEMPORARY STAFFING strategically to go global and diversify into newIS ALL ABOUT. markets and geographies. Outsourcing is gaining never-before acceptance as a business process.The driving force behind the staffing mindset – Enterprises are bracing to re-adjust their stanceor, if you will, revolution - is simple: Businesses to engage entrepreneurial millennials, the nextwant 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, escalatingis the breakthrough answer that bridges the two competition means that the margin for errorwish-lists. (when it comes to finding the right talent-role match) is dwindling fast.
Gap in technology adoption, the ability to matchtalent to role in quick-time, prohibitivegovernment policies and unpredictableeconomic winds are challenges to watch out for.So far though, the good news has beenoutweighing the bad.Companies are leveraging temporary staffing tolook their biggest bogeyman –Uncertainty – inthe eye. Workers are seeing their dreams of awork-life balance finally come true – one gig ata time. And - as a creative, on-demand talentpartner for organizations - staffing companiesare gearing up for more revenues this year.Whichever avatar you play in the new staffinguniverse - client, worker or staffing partner –get ready for disruption. One that will opengateways of faster, and smarter, growth.So long as you keep your 'Staffing Mindset' on.Deepak KaisthaManaging Director & CEO
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 1940’s. It got a fillip after World War II , when urban housewives started seeking part-time employment. In the 70’s, ‘Job shops’ provided contractual jobs to candidates who were known as ‘jobbers’. The staffing industry of the 70’s & 80’s – while small in size, was considerably specialized. Jobbers were usually technicians, engineers, drafters and designers – in other words, the terrain was technical and skill based. Not all industries engaged contract level workers this way : Amongst the ones that did, defense and aerospace were prominent hirers. SOMETIME IN THE 1980’S, TEMPORARY STAFFING COMPANIES STARTED DIVERSIFYING FROM THE TECHNICAL SECTOR INTO MARKETING, PRINTING, TELE-CALLING.
It was technology – the internet, specially Today, from job boards to social media- that took the staffing industry to the referrals to AI driven bots, there are morenext level. As job-seekers turned online channels than ever for hirers and talent tonatives and recruiters got more and more meet. Applicant tracker systems are ironingdigital savvy, new connections were out roadblocks in process flow managementbeing made, and new conduits of for staffing companies.engagement were discovered. Remote working and outsourcing are addingRELATIONSHIP BUILDING steam to the movement. And a clutch ofBETWEEN RECRUITERS AND benefits – from boosted performance toJOBBERS - WHO GRADUALLY less cost to 24X7 talent pipelines – areBECAME DEPENDENT ON slowly but surely catapulting short-termSTAFFING COMPANIES – GAVE A staffing as a long-term solution forPUSH TO THE MOVEMENT. organisations and talent alike. strategy I execution I capital 16
3.1 W O R K F O R C E SOLUTIONS ECOSYSTEM MAPPING INTERCONNECTED NETWORKS OF THE UNFURLING NEW WORKFORCE 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 / Consulting and Other Workforce Solutions - is undergoing tumultuous transformation. For stakeholders, this presents threats and opportunities in nearly equal measure. ONE THING IS CLEAR: THE MOST RESPONSIVE AND ADAPTIVE PARTY - AND NOT NECESSARILY THE ONE THAT’S BIGGEST OR STRONGEST - WILL EMERGE VICTOR.
STAFFING INDUSTRY ANALYSTSWORKFORCE SOLUTIONS ECOSYSTEM HRO PEO BPO MSP INDEPENDENT RPO CONTRACTOR COMPLIANCE PAYROLLINGOTHER WORKFORCE SOLUTIONS Ancillary STAFFING Directly Sourced HR Services Contingent Workers HR Consulting Temporary Staffing (Temps/ Outplacement Place & Search Independent Contractors/ Testing Freelancers) HR Tech Training & Online Staffing SOW Consulting Accredition Platforms Services VMS Crowdsourcing ATS JOB BOARDS Online Work Services Human Cloud strategy I execution I capital 18
3.2 G L O B A L STAFFING MARKET GLOBAL STAFFING MARKET NEW METAPHORS, AT WORK Globally, seasonal workers are driving unique value for businesses, by ushering a customizable mix of benefits to the table. GLOBAL PERMANENT STAFFING MARKET GLOBAL TEMPORARY STAFFING MARKET
That, coupled with the traditionally high costsof permanent teams, is causing corporateleaderships to lean-in towards short-termteams for long-term headways. And redefinethe very fundamentals of ‘smart work’. 86.5% 13.5%Source: strategy I execution I capital 20Staffing Industry Analysts
4 GROWTH DRIVERS WHY DO COMPANIES PREFER TEMPORARY STAFFING? IMPROVED PRODUCTIVITY Saddling full time employees with too much work can lead to loss of motivation, burn-out and reduced productivity. Bringing in temporary employees can help relieve the burden on full time staff. 11TH HOUR FIX When full time employees call in sick at the last minute, a staffing company can provide the much-needed relief by filling the gap with temporary workers. COMPANIES THAT TAKE THE EFFORT TO NURTURE RELATIONSHIPS WITH THEIR TEMPORARY STAFFING PARTNER TEND TO GET QUICKER RESULTS.
BIG SAVINGSStatistics confirm that the average cost of a newhire is growing. When one factors in recruiting,training and benefits, the costs add up quickly.Temporary hiring cuts through these deterrents.MORE SAVINGS ON THE KNOWLEDGEWORKERS COMPENSATION EDGETemporary staffing companies save the With their full-time focus on the domain –administrative costs of handling workers which makes them up-to-speed with the latestcompensation 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 toother money saving aspect is the reduced possess significant domain knowledge andcompensation deposit of a worker. expertise as compared to the internal HR team of a small business.An increase in temporary labor translates to adecrease in a company's payroll, which lowersworkers' compensation premiums, helpingcompanies save substantially.IN THE TEMPORARY STAFFINGSCENARIO, WORKERSCOMPENSATION INSURANCEWORKS ON A 'PAY-AS-YOU-GO'FORMAT, AND COMPANIES DONOT HAVE TO PAY MORE THANIS NECESSARY. strategy I execution I capital 22
KEY4.1 D R I V I N G FACTORSTHE CITY FACTOR OTHER DRIVING FACTORS FOR TEMPORARYAS NEW CITIES ARE BORN, AS THE STAFFING ARE:OLD ONES GROW BIGGER, AND ASMETROS RISE IN STATURE - Newly relocated populationESPECIALLY IN DEVELOPING 'testing the waters'.NATIONS LIKE INDIA, INDONESIA, Newly unemployed population, or one that'sMALAYSIA, BRAZIL, AND MEXICO – between jobs.THE DEMAND FOR TEMPORARY Population that's available for seasonalEMPLOYEES ACCELERATES. employment only. Population in college and looking for practicalIn places like UAE, where there are big career experience.investments taking place, the demand Newly graduated population in need offor temporary workers is skyrocketing. experience before starting a full-time job.Staffing firms, on their part, are utilizing Population interested in learning new skillsthe opportunity to broaden their scope and possibly changing careers.and scale.
FLEXIBLE & COMPLIANCE WITHAGILE WORKFORCE REGULATIONSIMPROVE ACCESSPRODUCTIVITY TALENT strategy I execution I capital 24
CURRENT4.2 & F U T U R E GROWTH CURRE FUTURE G THE MAIN FACTORS INFLUENCING THE GROWTH 12ECONOMIC LEGALStaffing drives significant economic As a Single Point of Cbenefit for companies - from service providers misavings on on-boarding / off- liabilities (including sboarding costs, training expenses & discrimination) forand infrastructure layouts. freeing the latter up TODAY, ROUGHLY 10% OF THE WORKPLACE IS CONT THE STAFFING INDUSTRY WILL CONSIST OF 61 MIL REVENUE, AND 6.2% TEMP HELP PENETRATION. BY 202 BE CONTINGENT AND WELL OVER 20% OF COM According to staffing industry analysts (sia), the staffin They figure this growth will be a result of many factor the desire from workers for mobile
ENT &GROWTHH OF THE STAFFING INDUSTRY GLOBALLY, ARE: 3 Contact, Staffing HEALTHCARE itigate legal sexual harassment By eliminating the bulk ofr businesses, Healthcare expenses,p to grow faster. Staffing companies are helping businesses tide over the rising challenges of cost, smartly.TINGENT, AND TBMGROWTH PREDICTS THAT BY 2020LLION EMPLOYEES, $581 BILLION IN GLOBAL TEMP20, BETWEEN 15% AND 25% OF THE WORKFORCE WILL MPANIES WILL BE UTILIZING STAFFING FIRMS.ng industry is expected to grow substantially by 2020. rs, but primarily the need for a flexible workforce, ande, educational and flexible careers. strategy I execution I capital 26
DEMAND FOR4.3 T E M P O R A R Y 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 A includes the rising cost of benefits and other overheads. It is enhancing the opportunities for part-time workers and independent contractors. The latest technology has enabled a mass B supply of part-time employees to find a demand commoditized services. Establishing a growth driving brand C which is trustworthy.
ABC TEMPORARY EMPLOYEES ARE CRITICAL RESOURCES THAT CAN GENERATE LONG-TERM VALUE AT A VARIETY OF LEVELS EFFICIENCY, FLEXIBILITY AND COST. strategy I execution I capital 28
5 KEY SEGMENTS KEY GLOBAL PLAYERS BIG PLAYERS HAVE BEEN MAKING STEADY AND STRATEGIC MOVES IN THE GLOBAL STAFFING SPACE FOR A WHILE NOW, THE TOP THREE PLAYERS IN THE GLOBAL STAFFING PLAYGROUND HAVE BEEN ADECCO, MANPOWER AND RANDSTAD. Cumulatively, their total revenue compares to the rest of the '17 Houses' put together (when one looks at the Top 20). Other players making a mark on the global scene are Kelly Services, Allegis Group, Recruit, KNF&T, Aerotek, Roth Staffing and Integrity Staffing Solutions. The playground is expanding, with new players from new countries and regions staking a claim to prominence on a global stage. GLOBAL NAMES IN TEMPORARY STAFFING
SOME OFTHESEFIRMSPOSSESSTHE ABILITYTO TAKEADVANTAGEOFEMERGINGMARKETOPPORTUNI-TIES ININDIA.That, coupled with their native capabilitiesto crank up productivity at short notice, isexpected to stimulate market dynamics. KELLY KNF&T RANDSTAD ADECCO AEROTEKSERVICES ROBERT ROTH INTEGRITY HHINSIGHT STAFFING GLOBAL HALF STAFFING STAFFING strategy I execution I capital 30
CUSTOMERS5.1 O F T E M P O R A R Y STAFFING THE KEY CUSTOMER SEGMENTS 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 STRATEGIC GROWTH DRIVER ARE 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 in recent times. The common thread connecting them all is a positive outlook – and staffing, both as a trend and an approach - can only go up.
DOMAINS RESONATING WITH THE RISINGTEMP STAFFING OPPORTUNITY.HEALTHCARE INFORMATION TECHNOLOGY FMCG E-COMMERCE TELE- & RETAIL COMMUNI- (FAST MOVINGCONSUMER GOODS) CATION TRADE & HOSPITALITYINDUSTRIAL strategy I execution I capital 32
GLOBAL5.2 M A R K E T SEGMENT GLOBAL MARKET SEGMENT With 14.4 million temp staffers in 2017, the US has traditionally been the biggest home to temporary workers, followed by China (8.1 million). India, Japan and France brought up 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. 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 that will see maximum contribution by temporary workers.
THE TOP COUNTRIES IN TEMPORARY STAFFING DURING 2017-18 ARE LISTED IN THE GRAPH (IN MILLIONS) SOURCE: TBM Growth15.3 10.9 3.4US 3.1 CHINA 2.2 INDIA FRANCE JAPAN strategy I execution I capital 34
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.
INDIA6 OVERVIEW TEMPORARY STAFFING IN INDIA AN OVERVIEWAs a 'way to hire', the practice of temporary or THE EVOLUTION OF TEMPORARYcontractual employment isn't new to India. AND CONTRACTUAL STAFFING INIndeed, 'seasonal hands' have been employed INDIA IS BEING DRIVEN BYin fields like architecture, art, education and INDUSTRIES ACROSS THEconstruction since ages. In more recent times, ECONOMY, WITH BOTHtemporary hiring has been leveraged to STARTUPS AND ESTABLISHEDadvantage by sectors like manufacturing, PLAYERS ESSAYING LEAD ROLEShospitality, oil & gas and a few others. AS THEY ENGAGE 'TEMP WORKERS' IN BULK.However, the Indian staffing sector first hit theheadlines – as it were - when it successfully AND DESPITE THE PRESENCEsupported the IT boom in India, matching OF BIG NAMES, IT IS THEgargantuan volume expectations almost SMALLER – TYPICALLY MOREovernight. The milestone did not go unnoticed AGILE AND RESOURCEFUL –by other sectors. Before long, players in spaces STAFFING FIRMS THAT ARElike e-commerce, retail, healthcare, telecom CATERING TO THE LION'Sand 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, ato more mature markets around the world) and tech savvy population, shiftinglargely unorganized, the staffing sector in India attitudes, the rise of outsourcing,is riding an unstoppable juggernaut. The stats and supportive laws are therecount a fascinating story: Seasonal or favorable winds that aretemporary staffing already accounts for nearly expected to keep the13% of the country's 2.5 trillion dollar GDP. India' momentum going. And maketemporary workforce economy employs 3.4 temporary or seasonal staffing amillion workers, a number that should touch a viable, profitable andmore-than-healthy 8.91 million by 2022. By sustainable talent strategy for2025, 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.
INDIA - EMERGING HOTSPOT FOR TEMPORARY WORKERS THE GDP GROWTH OF INDIA IS RISING YEAR-OVER-YEAR AND THE OPPORTUNITIES TO FILL THE VACANCIES THROUGH TEMP STAFFING WILL PROCEED WITH A LINEAR GROWTH IN THE FOLLOWING YEARS. GDP GROWTH RATE INDIA VS GLOBAL (%)2018E 7.4% 3.9%2017 6.7% 3.7%0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% India Global Source: IMF strategy I execution I capital 38
6.1 K E Y T R E N D S IN INDIA KEY TRENDS IN INDIA WHILE IT IS SLATED FOR A BOOM GOING FORWARD, IT WAS FROM 2014 THAT TEMP STAFFING STARTED TO GROW, AS COMPANIES STARTED HIRING TEMPORARY EMPLOYEES IN HIGHER NUMBERS. Technology trends and tools have been driving cross-sectoral growth when it comes to Staffing in India. Fresh candidates are the primary target audiences for employers, with the latter providing them meaningful opportunities to gain vital experience and bolster resumes. Training candidates up has been a cost- effective proposition so far for companies, but 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.
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 Temporary Staffing terrain in India. 01 Fatser economic growth in India during 201702 will continue in 2018 whcih will propel the temp staffing business in india. According to 03 IMF, the growth is 7.2% in 2016-2017 and it is04 expected to be 7.7% in 2017-2018. India’s online hiring activities increase by 6% in February 2018. “This growth is primarily driven by non-IT sectors like oil and gas, BFSI, industrial products, construction and automobile. The IT sector continues to be under pressure, we can expect this volatility to continue for a few more years before it moves north. The key staffing firms like Adecco is investing more in digital technology as employers increasingly seek more flexible staff to respond to swings in demand, and carry out more project-based work. 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. strategy I execution I capital 40
6.2 F L E X I - S T A F F I N G INDUSTRYWISE DEMAND INDIAN FLEXI-STAFFING: INDUSTRY-WISE DEMAND With growing awareness and economic growth, penetration of flexi-staffing is rising across industries. Manufacturing, BFSI, FMCG and retail ( the latter including e-commerce) still accounts for a majority of the action. The Manufacturing sector alone commands a third of the engagement. Logistics, IT/ITES and others bring up the rear. Fast emerging trends 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 spearheading the boom.RETAIL FMCG E-COMMERCE HOSPITALITYMANUFACTURING TELECOM PHARMA AGRICULTURE
CWUISREREDNEMT AINFNODDRUSTTERMYP STAFFING IN INDIA MANUFACTURING BFLMOFSGCIIGST&ICRSETAANIDL TELECOM IT/ITES OTHERS 3025 13 11 10 11 Source: TBM Growth strategy I execution I capital 42
6.3 S T A T E W I S E 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 action – both in terms of adoption and demand. States like Karnataka, Maharashtra and Gujarat are the other prominent hotspots on the Indian temp staffing map. 0. 0.59%
3.05% 1.74% 1.01% DELHI/NCR.94% HARYANA GUJRAT KARNATAKA MAHARASHTRA Source: TBM Growth strategy I execution I capital 44
6.4 K E Y O R G A N I Z E D PLAYERS IN INDIA BIG FISH OF THE INDIAN STAFFING INDUSTRY THERE ARE MORE THAN 10,000 UNORGANIZED PLAYERS IN THE TEMPORARY STAFFING MARKET IN INDIA. 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 GREATER SHARE OF THE BURGEONING TEMPORARY STAFFING PIE, THEY 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 central role in the staffing sector in India. With the enervating effects of GST and 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.
TEAMLEASEINFO EDGE QUESS (ONLINE PORTAL) GLOBAL BigFish ADECCOINNOVSOURCE SOLUTIONIKYA RANDSTAD MANPOWER GROUP strategy I execution I capital 46
6.5 I M P A C T O F G O V E R N M E N T RULES AND REGULATIONS IMPACT OF GOVERNMENT RULES AND REGULATIONS Growing unemployment is emerging as a political challenge, forcing the government to step up job creation activities. Government actions are impacting the staffing industry in India, in particular, by Goods and Services tax (GST) and Tax Detected at Source (TDS). Staffing firms are expecting a TDS cut from 10% to 2% and it will resolve tax irregularities. The key challenge for temporary staffing firms, however, is Sales Tax. IN JANUARY 2018, THE UNION GOVERNMENT OF INDIA HAS INDICATED A MINDSET REBOOT IN ITS APPROACH TO GENERATING EMPLOYMENT, PROPOSING TO AMEND RULES TO ENCOURAGE FIXED-TENURE, OR CONTRACT JOBS. The impact of GST in the staffing industry may be a transient one, but it has increased the demand for temporary or contractual jobs through organized temporary staffing firms. The adoption of GST has changed the much 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 will cause unorganized players to convert themselves into organized players.
In the recent budgetary session, Mr. Arun Jaitley Currently, fixed-term (temporary / contractual) (Hon'ble Finance Minister of India) expressed employment is only allowed in the apparel that, “the facility of fixed term employment will manufacturing sector. The cabinet had recently be extended to all sectors”. said it could be extended to footwear, leather This move would allow companies to hire and the accessories sector to help \"attract workers for short-term assignments and large-scale investments at global scale.” terminate their services when projects are completed. The Indian government is in the process of altering Labor Laws which may allow industries 3.65% to employ contractual staffs. This step will reduce the unemployment rate in India and boost the hiring rate.UNEMPLOYMENT RATE (PERCENTAGE) 3.60% 3.55% 3.50% 3.45% 2014 2015 2016 2017 2018E Series 1 3.50% 3.50% 3.50% 3.60% 3.50% SOURCE: INTERNATIONAL LABOUR ORGANIZATION strategy I execution I capital 48
FLEXI6.6 S T A F F I N G MARKET IT FLEXI-STAFFING MARKET IN INDIA IS GROWING AT AN ANNUAL GROWTH RATE 14-16% AND TBMGROWTH HAS PREDICTED THE ANNUAL REVENUE OF INDIAN IT FLEXI- STAFFING MARKET FOR THE YEARS 2018 TO 2020.The success story of the Indian Flexi-Staffing BY REMOVINGindustry is one of guts and glory, in equal UPFRONT COSTmeasure. While temporary and contract hiring COMMITMENTS ANDhas been an integral part of India's economy BRINGING MOREsince time immemorial, staffing players started PREDICTABILITY TOshifting their focus on IT staffing, specifically, HIRING BUDGETS,after it became apparent that the latter delivers AN ON-DEMANDmuch bigger margins as compared to other WORKFORCE FUELSindustries. The sector hasn't looked back, since. INCREMENTAL GROWTH FORThe Indian IT flexi staffing industry was worth ORGANIZATIONS -USD 3.04 billion in 2016-2017 – which is 28% of QUITE APART FROMthe APAC Flexi Staffing Industry and 4.8% of the LETTING THEM RE-global IT Staffing Industry. With the IT sector on FOCUS ON THEIRthe surge, it is expected that the IT flexi staffing COREspace will clock 18% growth per annum over COMPETENCIESthe next few years (across top states and AND BIG BUSINESSsectors of the country), and emerge amongst VISION.the top employment generators in the country.
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