The dawn of the flexible workforce era

Economic volatility is a reality today and organisations need to be more flexible to accommodate market changes. The staffing market in India is already large considering the population in the labour pool and is poised for rapid growth. In the years to come, Indian staffing market will be the largest in the world.

According to industry reports, the temporary workforce is likely to account for 10 per cent of India’s formal sector employment by 2025. India has one of the largest flexi staffing workforce numbers in the world, next only to China and the US.

As formal sector employment numbers increase with several policy-related initiatives of the government, the size of the temporary workforce will further increase. And looking at the optimism in the economic activities (flexi staffing market is poised to grow 10 to 15 per cent YoY), India can very well beat other countries with the sheer size of temporary staff employed in the organised sector within the next decade.

Contract staffing in India has found increasing acceptance in various sectors. The retail sector is expected to witness growth to the tune of 10 to 12 per cent per annum, making it the most lucrative option for a massive growth in flexible staffing. The government employs a temporary workforce of about 12.3 million, with predictions indicating an increase in this figure. The penetration of contract staff in the IT and ITES industry is also likely to increase from 10 per per cent to 20 per cent in the next few years.

Indian companies across industry sectors are resorting to hiring talent on a contract basis across levels. Though temp staffing started with jobs mostly at the lower end of the pyramid, namely data entry, accounting, sales, backend operations, and routine administrative tasks, today, flexi staffing spans the hierarchy in sectors such as IT and engineering to include mid-and senior-level roles with experts or managerial profiles up to the board of a company.

Further, the mushrooming of startups has created a great demand for a flexible C-suite with multiple startups sharing one CFO/CMO, thereby facilitating an increase in their affordability and accessibility of top talent. Also, the entire employment ecosystem is facing changing priorities. In a market where loyalty is low and attrition high, employees are largely prioritising enhanced career opportunities, remuneration, and job flexibility over job security and permanency. People are no longer willing to grow old with the organisation.

The decision of whether or not to hire a flexible workforce largely depends on the organization’s nature of business, drivers of the business, and the societal realities around employment.

There are several advantages to a flexible workforce: ability to scale up quickly to meet volatile market demands; enhanced flexibility and ease of resource allocation; freedom from administrative tasks around employment; reduced costs of hiring and on-boarding of new personnel; access to a wider pool of skilled talent.

The disadvantages would include business critical projects involving strategic thinking or confidentiality posing a challenge for effective execution. Besides, the roles being either short term or temporary would restrict the talent pool.

One reason why flexi staffing hasn’t taken off in India is the regulatory scenario around short-term or temporary employment. The multiple labour laws are confusing or contradictory.. Add to this the multiplicity of enforcement agencies.

We should have one central regulatory agency which is fully empowered to prescribe and monitor the implementation of all applicable labour laws. Clear, well-defined laws for friction free regulation and ease of doing business and effective administration of the environment are a must.

In today’s uncertain business environment, organisations need to adjust to dynamic business demands. Though there are multiple challenges, the road ahead for flexi staffing points to a growth oriented path powered by technology, simpler regulation, effective compliance, and innovation in making temp staff effective for business.

The writer is the CEO, Randstad India. Today is International Workers’ Day