The business of temporary staffing

Sudipta Dev analyses the complexities of managing a temporary staffing business.

Temporary staffing or temping, is emerging as the fastest growing recruitment trend in the country. Globally a $140 billion business, while third-party contracting is yet to play a dominant role in India, it has gained a foothold with a large number of big and small companies opting to engage staff without the responsibility of managing them. There are many challenges and behind the scene complexities for temporary staffing organisations who have to pay a fine balancing act in attracting and retaining the right resources for their client organisations.

It is not an easy job for temping companies to lure skilled talent who look for established names and permanent positions. This despite the fact that nowadays flexible career is no longer an unattractive option for many professionals. Attrition remains a challenge for all organisations in the IT and BPO sector, and temporary staffing companies are no different. “Organised temporary job is a bridge to permanent employment. Out of our 70,000 temps on the rolls, more than 40 percent find permanent jobs within a year and 8-10 percent leave for higher studies,” says Rajesh A R, Vice-president, TeamLease Services, focussing on the severity of the problem. He further points out that several of the labour laws (like CLRA) inherited by India from the pre-independence times, are outdated and must be scrapped or rewritten. Most of the existing labour laws do not really suit the major knowledge-intensive industries that have risen in recent years.

Acquiring talent

"Flexible careers are increasingly appealing to professionals because they are continually challenged and can choose to take breaks between assignments and projects befitting their capabilities and experience"

- MV Subramanian
Director & COO
Focus Infotech

The target demographic includes retired experienced professionals, housewives, freelancers, students and freshers. Campus recruitments, referral programmes and channel partners are the different sources to acquire talent. Temping organisations have short-term career paths in place for the individuals, and also offer customised training as per client requirements.

There are many senior consultants who are on the lookout for flexible employment opportunities, which will give them the freedom to work on projects of their interest. MV Subramanian, Director & COO of Focus Infotech, a leading strategic IT HR and managed solutions company, explains, “Flexible careers are increasingly appealing to professionals because they are continually challenged and can choose to take breaks between assignments and projects befitting their capabilities and experience. This is also an outlet to satisfy the entrepreneurial thirst of most mid-career professionals. Other appealing elements are enhancing their domain knowledge, earning more than just a salary and being placed in locations of their choice.”

"Organised temporary job is a bridge to permanent employment. Out of our 70,000 temps on the rolls, more than 40 percent find permanent jobs within a year and 8-10 percent leave for higher studies"

- Rajesh A R
Vice-President
TeamLease Services

Focus understands the need to innovate and evolve itself into an ‘IT career management’ team for its consultants, while fulfilling the “extended HR-arm” role for its end-customers. Professionals from the IT domain are nurtured from their career perspective, ensuring that their interests are managed through the individual’s career life. “This works towards stability and reliability for both ends of the supply chain—the customer and the consultant. We facilitate training, counselling and act as career managers to further the career aspirations of our consultants and provide them with good work environments,” states Subramanian.

The rising rate of “unemployable” youth entering the job market has been a matter of concern in the last few years. Their inability to meet the demands of the recruitment market in terms of skills and aptitude, makes them a waste resource. TeamLease has chalked out policies to reduce the “last mile-unemployability”. The company has provided funding to candidates, by tying-up with a micro finance institution that gives loans to candidates for a 12-week course. “One-third of the course consists of spoken English; one-third on software training like Excel, PowerPoint and Word; and one-third on personality development like how to dress for a job. We encourage candidates who fail our interviews to make use of this initiative,” says Rajesh.

Common problems and recommended solutions
When a temping company fails to provide critical resources on time the project suffers and the customer receives negative feedback from their clients:
The solution would be to involve us (HR consulting firms) right from the planning stage, which allows us to plan sourcing and staffing at the appropriate time. This will reduce the frequency and impact of client issues.
When deputed consultants do not perform as per expectations:
Plan for back-up resources depending on the criticality, and the client needs to allow us to use the back-up resources when required . If the project is very critical, have a system of taking regular feedback, to check on the stability of the project.
Some customers do not use a staffing strategy:
However small, the customer should have a clear reason for using HR consulting services. This will allow consulting companies such as Focus, to plan an independent and customised strategy for each customer, to fulfill the customer need.
Source: Focus Infotech

Relationship with client organisations

In most cases organisations have a long-term contract with their employee leasing companies. The Client Service Agreement establishes this relationship. The agreement states that the temping organisation is the employer of the temp working in the client premises. “Under CSA, the temping company is responsible for the personnel administration and compliance for employment related government regulations, while the client retains the employee’s services in its business and remains the employer for various other purposes,” explains Rajesh. According to research at any point of time, more than 20 percent to 30 percent of activities done by companies are temp in nature. Consequently in most cases, it is a long-term partnership with client organisations. “There are a set of jobs (mostly in 0-4 years experience bracket), where the nature of relationship is short-term. We just act as a bridge to these candidates for full-time employment. We have over 40 percent of our temps move to full-time employment every year. It’s like a “fast track” apprentice programme. There is also a segment called lifelong temping (e.g. project managers in IT). The job profiles of such candidates are temp in nature. They are deployed to various clients on project basis regularly. Today, this segment accounts less than 5 percent of our temp associate base. However, as temping becomes a choice of “life style”, we expect an immense growth in this segment,” adds Rajesh.

Focus Infotech takes great pride in being an extended HR arm to its customers. Subramanian states that as temporary staffing is still evolving in India, most companies function like recruitment vendors to their customers, “However at Focus, we have partnered with our customers to move beyond mere transactional relationships to a strategic one, since we recognised early that as the IT HR industry expands and matures, outsourced HR services needed to have a meaning and scope beyond mere payroll-processing or placement services.” The company provides end-to-end HR solutions including comprehensive employee management, ranging from pre-employment screening and employee deployment, onsite management, coaching and advice regarding performance management, customised orientation, training and testing to conflict resolution services.

Future of temping in India

In any country 5 percent of the workforce comprises of temporary staffers. Subramanian predicts that in India there is potential of 1-1.5 crore jobs in the next five years. It is however necessary to increase the employability factor of temp staff in the country, in terms of technical skills and domain knowledge. “The flexi job market has nearly doubled in each of the last few years and is expected to grow as the economy continues to expand; and there is an increasing acceptance of temporary staffing as a mode of employment in the corporate sector,” he adds. The sector however has to evolve from being just a provider of requisite manpower to offering value-added services and become a managed services provider.

Rajesh points out that according to the Ministry of Labour, 80 million people in India—that is almost 20 percent of the labour force are temporary, but less than 0.5 percent of them are in the organised sector. “If we were to organise the unorganised sector, that would be a huge market. So while demand and supply are key variables, our key challenge lies in changing the unorganised sector to the organised one,” asserts Rajesh. The fact that by end of this year, 100,000-125,000 employees will be working with TeamLease, and at the end of five years, the company hopes to employ more than half a million people, is pointer enough to the growing strength of the temporary workforce in India.