Hiring individuals on a contract basis allows firms to maintain relevant staff levels and retain available talent, while reducing costs as they are not obligated to spend on benefits such as insurance and provident fund
Companies, including small and medium enterprises (SMEs), are looking to hire professionals on a temporary or project basis to conserve cash. Demand in temporary hiring has risen three-to-four fold and may surge as employers would not want to hire full-time employees in the next 12-18 months, said HR consultants.
Mohit Rampal, consultant for a mid-sized cybersecurity firm, recently posted his requirement for developers on a job searching platform. In any other year, Rampal would have preferred 'hiring' these developers. But in 2020, he can only afford them on a contractual basis.
"Demand for solutions around CRM, data mining, artificial intelligence, remote cyber management, etc. has gone up and companies are looking for contractual hiring," says Rampal, a cybersecurity evangelist and consultant with Ramognee Technologies.
Rampal, however, noted that hiring on a project basis is affordable for him as it has lesser long-term cost impact. Besides, resources are now available in shorter response time and commitment to retaining is not required. Most importantly, such hirings let core teams focus on the development of the main product, he added.
Companies rely on a temporary hiring agency’s contract staffing to support upcoming projects, meet seasonal requirements and reduce their workforce during slow periods. Hiring individuals on a contract basis allows firms to maintain relevant staff levels and retain available talent, while reducing costs as they are not obligated to spend on providing benefits such as insurance and provident fund (PF), among others.
Also, while on one contract, an employee cannot undertake other projects, which may result in conflict of interest with their employer.
"There is a clear trend in contract hiring now. For functions like legal, finance and IT people are looking for contractual hires, which are between 6-12 months tenure. Mostly small and medium enterprises are hiring. Large organisations cannot do away with critical hires on a temporary basis so they are not doing it," said Anshul Lodha, Regional Director at Michael Page.
Lodha added that over the past two months, his company has seen many clients putting in a request to hire chief technology officer (CTO) on a temporary basis as they have projects to implement. "Similarly, a lot of firms are asking us to hire a legal or compliance guy for six-to-nine months to lay out a process," said Lodha.
Companies are also contract-hiring medical professionals who can provide their employees psychological support. This has been especially seen in companies such as banking and financial services, IT and back-office operations that work with a large number of employees.
"We have seen such contractual hiring during 2008-09 but it used to be towards more bottom of the pyramid work force--this time around we do see a trend towards more senior, industry veterans being hired on contract across sectors/domains," said Amit Vadhera, head staffing – BFSI (banking, financial services and insurance) and government, TeamLease Services.