IT firms recruit more flexi-staff for projects

Flexi-staffing is gaining traction among technology firms as they rush to meet the growing need for people with digital skills for short-term projects. The pace has intensified during the pandemic as a rapid shift towards digitalization and automation has brought down the average tenure of projects.

The information technology (IT) and IT-enabled services (ITeS) sector is leading the option of flexi-staff adoption, with around a dozen out of every 100 employees being contractual or flexi-staff, according to the Indian Staffing Federation (ISF), the apex body of the flexi-staffing industry.

According to job portal Indeed, the hiring of flexible or temporary staff in India climbed 22% in January from a year ago.

“Agile-based DevOps (software development and IT operations) delivery involves short cycle times, and customers look to meettheir needs using flexi-staffing. Customers prefer to have a core team of full-time employees, but they use contractual staff to be able to ramp up and down based on specific requirements to maximize efficiency,” said Ramesh Alluri Reddy, director of managed services and professional services, Adecco Group India, a global staffing firm.

India’s flexi-staff workforce is expected to reach 6.1 million this year from 3.3 million in 2018, growing at a compound annual growth rate (CAGR) of 22.7% during 2018-21, according to a report, titled Impact Of Key Reforms On Job Formalization and Indian Flexi-Staffing Industry 2019, by ISF.

A flexi-staffing strategy helps companies hire just-in-time, aligned with their business growth and needs, without having to bench, redeploy or retrain employees, said Lohit Bhatia, president, ISF.

“When a niche skill is required for a short-term project, organizations can choose to hire a contract employee or gig worker. Flexi-staffing will manage such staffing peaks and troughs and help them scale up easily,” Bhatia said.

Experts said a shortage of talent in niche and super-niche technologies is leading recruiters towards flexi-staffing. Some of these skills include DevOps engineers, UX designers, big data specialists, cloud architects and embedded data scientists.

UST, formerly known as UST Global, a California-based IT services and digital technology firm with more than half of its workforce in India, has been using flexi-staffing to deliver projects at speed to clients and quickly respond to cyclical changes in demand.

About 15-20% of UST’s workforce in India is hired through the flexi-staffing or gig worker model, while it is as high as 70% in the US. “In the Indian market, the need for flexi-staffing and gig workers is becoming popular, especially post-covid, to manage the acute shortage of on-demand talent in smart automation, digital and cloud. Companies are focusing on increasing utilization, maintaining a reduced bench, and accelerating resource deployment due to changing skill-sets,” said Venkatesh Radhakrishnan, global head of talent acquisition at UST.

Opportunities in low-code programming—where little to no coding is required to build applications—and skill sets such as Python, artificial intelligence, machine learning, data engineering, cybersecurity and quantum computing would move more into the gig-economy in future, said Radhakrishnan.

At Hewlett Packard Enterprise (HPE), flexi-staffing is a core part of its hiring strategy in India, where it has the second-largest workforce of 20,000 people out of its global headcount of 60,000. “As part of our overall talent strategy, contract and temporary staffing of talent, based on short-term skill needs, forms a key component of our approach and provides HPE with the requisite flexibility to respond to needs of business and customers,” said Sailesh A.J. Menezes, senior director of human resources at HPE India.

Flexi-staffing also helps companies save costs as they are hired only on a project-basis and can be billed as variable costs. “There is no compulsion of minimum tenure and liability. Core employees invite bench costs when the project is completed, which adds to the overall cost without revenues. It also gets sticky when employees on the bench cannot be placed elsewhere, and this leads to separation and the liabilities for the companies increase,” said Reddy from Adecco.