Trotting the Temporary Staff Model- Bringing a Transformation in the HR Industry
HR is no longer limited to the staff function. In recent times HR has seen some unprecedented changes in its modus operandi. If we exhume its history we can find its roots deep down in industrial and labour relations. Grown at a snail’s pace during the second half of twentieth century, the span of control of HR was limited to support function and to a staff function in more formal sectors. With the onset of LPG (liberalization, privatization and globalization), organizations started recognizing the increasing need of HR to manage its young and diverse workforce. Contemporary HR is considered to be a strategic business partner. It has got the prerogative to voice its concern in board room meetings. Transformation in HR continues, and in yet another leap, it has given rise to an altogether new set of industry, ‘HR Consulting & Solution Industry’.
Many organizations are rethinking their strategies and turning their eyes towards HR Solution Industries to help cut their overhead costs and to survive the current economic slump. HR solution industry has witnessed an encouraging growth in last couple of years and has been well acknowledged by both employees and employers. Companies have started to engage consultants to meet their HR requirements on account of growing complexity and talent challenges. They are relying on temporary staff model to have smaller bench strength thus optimizing the cost.
Temporary recruitment market is broadly divided in 3 classes, Professional Staffing, General Staffing for White Collar & Blue collar. Staffing companies provides temporary staff on their payrolls to various companies.
Professional Staff generally consist of technically proficient workers that typically operate in the IT and engineering sectors. General Staff -White collar are the people operating in ITES, retail and telecom sectors with generic training in front end retail store, BPO etc. Their salaries typically range between INR 10,000 and 13, 000 PM. General Staffing -Blue Collar are the temporary staffs to factories or plants. These typically include workers. Blue collar staff are paid the minimum wages applicable in the state where the company operates, generally around INR 5,000 to 8,000 PM.
What has been rated as a leading HR trend worldwide, ‘Temporary Staffing’, is finally catching up in India. Indian staffing market is at around Rs 26,650 crores. Indian labour market is unique as approximately 90% of Indians work in the unorganized sector. The staffing industry penetration is today about 0.3-0.5% among the organized workforce compared to developed economies where the penetration levels are around 2.5% to 3% of the organized workforce. Experts expect that in the near future, 2.5%-3.1% of the workforce in organized sector in the country will be hired on a temporary basis.
Though lion’s share of market size is governed by recruitment in temporary staffing that is around 73%, permanent recruitment and other offering such as payroll administration, employee benefit, recruitment process outsourcing and employment training contribute around quarter of the market share.
Major players in Indian markets are Adecco, TeamLease, Ma Foi (Randstad India), Ikya Human Capital solution & Manpower Group. Top-three firms account for approximately 15% of the total market and the top-ten firms approximately 26%.
Growing at a CAGR of 112% during last 4 year, Ikya became the fastest growing general staffing solutions nationally with over 46000 associates serving over 325 clients operating from 23 cities.
The growing need of HR professionals has been well envisioned by central government. Ministry of HRD has first time incorporated a dedicated HR program in IIM, Ranchi. In this yet to be discovered market, companies are tapping in young HR professionals from premier B schools to have sustained competitive advantage over others.
Ronak Johari is an HR student at IIM Ranchi and is currently pursuing his internship at IKYA Human Capital Solutions, an esteemed HR consulting firm. Previously he has worked as a software engineer at Accenture for 24 months.