India Inc pushes for temp hires in anticipation of a good summer

Companies are opting to hire temporary employees over permanent staff for junior roles in e-commerce, retail, NBFCs, consumer durables and beverage bottling plants.
Companies are opting to hire temporary employees over permanent staff for junior roles in e-commerce, retail, NBFCs, consumer durables and beverage bottling plants.

Summary

  • An increase in consumer spending after appraisals and the summer holiday season are expected to push recruitment in this segment

India’s leading staffing firms have about 30,000 open mandates for temporary positions for the April-June quarter of the new fiscal year. That’s about 20% higher than the same period last year, according to temp hiring agencies.

Companies are opting to hire temporary employees over permanent staff for junior roles in non-banking finance companies (NBFCs), retail, e-commerce, consumer durables and beverage bottling plants. The temp contracts are for 6-11-month periods.

An increase in consumer spending after appraisals and the summer holiday season are expected to push recruitment in this segment.

Recruiting agencies have cautioned that companies remain wary of permanent hiring in a big way since temp gives them the option to scale up and down as needed.

“While we expect 30,000 open mandates in general staffing (temp roles), the numbers are similar to last two quarters but 25% more than same period last year," said Lohit Bhatia, president of workforce management at business services provider Quess Corp. “April-June is the period when e-commerce and logistics firms recruit to cater to demand in summer sales."

Bhatia noted that these three months coincide with the time when children are at home during vacations and deliveries increase, which necessitates more hands on deck. “The appraisal and bonus season also leads to larger consumer spending and this, in turn, leads to more hiring," he added.

Permanent and temporary hiring are the two major channels of recruitment. In temporary hiring—relegated to junior roles—HR firms are paid a flat fee for every candidate that they bring in. The contracts can be for 6-11 months and the new hire may be on the payrolls of the client company or the vendor. Permanent recruitments are on the payrolls of the company and can include middle and senior management as well.

“Companies prefer to hire in temp roles because they can scale up and down depending on business outlook, which is not possible with permanent hires," said Kartik Narayan, chief executive officer, staffing, Teamlease Services. 

Narayan added that in the first quarter of the new fiscal, the recruitment firm expects an 18-20% rise in open positions above Q3 and Q4 (of FY23-24), respectively, in terms of hiring for positions led by consumer, BFSI (banking, financial services and insurance) and a little bit on manufacturing.

“Last year, Q3—the festive season—was significantly lower due to a drop in BFSI mandates and poorer-than-expected consumer business offtake in the FMCG (fast-moving consumer goods) and FMCD (fast-moving consumer durables) business," Narayan added.

The April-June quarter for many hiring firms will bring in numbers similar to or even more than the festive season period of October-December.

Recruitment firm Manpower India can expect a 20-25% uptick in temp hiring mandates when compared on a like-to-like basis with the last fiscal year, according to the company’s president Alok Kumar. This year, Manpower India estimates that the consumer durable growth in tier-II and tier-III cities, especially in beverages and bottling companies, will bring in the numbers.

“The high demand coming from Kerala, Andhra Pradesh and Tamil Nadu in the beverages category will outstrip the last two quarters’ temp hiring mandates by 15%," said Kumar.

The information technology sector, which remains huddled away from large-scale recruitment drives, is leaning towards temp roles in programs like cloud platforms such as Amazon Web Services and Azure.

“There is a 15% upswing in the mandates compared to last year and 8-10% versus the January-March quarter. The contracts are drawn for six months and employees will get salaries ranging from 5-12 lakh," said Aditya Narayan Mishra, chief executive of Ciel HR Services.

 

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