Indian organised temp staffing growing at 20 per cent: Study

Indian organised temp staffing growing at 20 per cent: Study

Key findings of the study:

- Recession lessons: cautious on rewarding talent, not hiring: Temporary hiring gains traction as compared to the previous year and and zips ahead at 17 per cent towards the last quarter, a rate of growth last seen half a decade ago. The industry may not be cautious anymore while hiring, but they sure are being very choosy while rewarding talent. Probably some lessons learnt from the recession. Salaries have risen across industries and cities, in general, but the spoils are not shared across the board – businesses have begun to incentivise smartly and cherry pick to acquire and retain valuable talent.

- IT back with a bang: The report reveals that the Information Technology sector is back in the reckoning after almost three years of staying in the shadows. A sure sign that the sector is on the recovery mode. Temporary staff hiring is up by as much as 19 per cent in the Year 2010 for IT and salary increments are between 10 per cent and 12 per cent. The sector leads the rest of the industries on both these counts. Automobile,
Telecommunication and Healthcare follow far behind on hiring, with about 15 per cent growth, and closely on salary raises, with between 9 per cent and 10 per cent growth.

-Bangalored: Bangalore strengthens its number 1 position with an enviable salary growth rate of 8.3 per cent. Mumbai (7.8 per cent) retains the second place and Delhi (7.3 per cent) reclaims the third place from Chennai. Indore (3.9 per cent), Goa (4.2 per cent) and Jaipur (4.4 per cent) are cities with the lowest salary growth rates.

- Trend Spot: Salary raises spread and new skill-salary clusters emerge: According to the study, salary raises are now spread over a larger set of profiles across industries and cities. This is primarily because of the rush and need for skills and the right talent. This phenomenon has pushed the median salary increment to 7.3 per cent, up from 5.25 per cent in 2009. This cheer is only going to spread wider over the next couple of quarters. The report also notices a new trend of multiple clusters of high-skilled, high-paid profiles mushrooming in 12 of the 14 cities covered in the study. Automobile, FMCG, Food & Hospitality, ITeS and Retail lead the new charge in the pay-for-skills department while Agriculture / Agrochemicals, FMCD and Healthcare continue to improve on their ability to identify, assess and reward skilled talent.

-  Manufacturing on course to overtake Services sector: Services sector has traditional been the leader in temporary hiring. However, the report finds that this scenario may soon change. Thanks to healthy growth in hiring as well as salary increments in the Agriculture/Agrochemicals, Automobile, Power & Energy and FMCG industries, the Manufacturing sector now trails the fast growing Services sector by a thin margin. Hiring in the above industries is up to more than 7 per cent, and salary growth to 6.33 per cent.

- Can you beat them: There are certain industry-city pairs that are soon going to be impossible to beat, because they seem to be outperforming the market, according to the study. The most effective of these pairs in terms of incrementing salaries are Chennai–Automobile, Delhi–Food & Hospitality, Mumbai–Healthcare & Pharma and Bangalore–IT. Salary growth rates across these industry–city pairs are 7.5 per cent and above, with Bangalore–IT being the most rewarding pair of all at 12 per cent.

- Attrition raises its head again: The increase in hiring within sectors and opening up of different sectors to temporary hiring has their downside too.  Newer avenues for employees are increasing and as a result, the longevity of a temporary employee in industries like Agriculture / Agrochemicals, FMCG and Manufacturing & Allied Industries has gone down by up to three percentage points. The BFSI, Hospitality, IT and Telecommunication sectors experience a 1.5 to 4 percentage point drop. However, this is also an indication that temporary staffing is truly the springboard to permanent orbit, the study says.

The report covers 13 key industry verticals that have active temporary staffing practices: Agriculture & Agrochemicals, Automobile & Allied Industries, Consumer Durables, Power & Energy, FMCG, Manufacturing & Allied Industries, BFSI, Telecommunication, Hospitality, Healthcare & Allied Industries, Information Technology, ITeS and Retail.