Temp hiring to go up: TeamLease

The TeamLease Annual Temp Salary Primer 2010 is a comprehensive report on a variety of attributes that govern the dynamics of the employment market - skills, salaries, increments and longevity (which is a measure of the time period for which a profile would stay in a job - the inverse of attrition). Data points covering these attributes for temp staff working across 264 different Job Profiles, 13 Industries and 8 Functional Domains in 14 major locations in India have been processed and analysed for this purpose.

Temp job market

According to the study, the temporary job market is not yet very generous in incrementing salaries across the board. However, rewarding valuable skills will be the silver lining for the coming year and special skills sets are likely to be highly valued.
The report further states that the hiring numbers would be stepped up from the current 11 per cent - 14 per cent to about 18 per cent over the first quarter of 2010 as the new practices to gauge capabilities mature.

The Skills are in demand and this could be seen from agriculture / agrochemicals businesses in Bangalore who have rewarded many of their Sales profiles with increments in excess of 10%. Likewise, many Engineering and Blue Collar profiles received similar hikes across multiple cities from Automobile companies.

According to TeamLease Services Vice- President, Rajesh A R, “The Indian temp staffing market is fast maturing and employers are giving valuable skills due recognition and rewarding them well. There is evidence that people retention and longevity is positively impacted by a fair distribution of salary increments in tandem with skill levels.”

“With the organised sector recognising temping as a key people staffing strategy, temp staffing practices have evolved considerably. Not only are businesses narrowing the margin of difference between temp staff and permanent staff salaries, they are also rewarding the best sought after skills disproportionately. Now that salary increments are back, a 7.5 per cent to 15 per cent raise for temp staff, based on capabilities, is seen to be well in order to retain well-skilled people,” added Rajesh.

The Temp Salary Primer each year adds a significant increment to the manner in which key decisions about hiring and compensating are made. This year’s edition broadens the envelope and presents an updated construct of salary determinants by incorporating ‘Increments and Longevity’.

The ‘Increments and Longevity’ construct includes a set of four key attributes and their interrelationships to enable even more intelligent decisions by the users. As earlier, this works in tandem with the online hiring decision platform - www.indiasalary.in - and delivers value proposition - the right job, with the right skill, at the right price, at the right time.

Key Findings:

 Hiring gaining speed: Following a brief period of lull after last year’s meltdown, employers have started hiring again. Hiring was overcautious though, as businesses were taking on new practices that evaluate candidate capabilities. There are indications, however, that numbers would be stepped up from the current 11 per cent - 14 per cent to about 18 per cent over the first quarter of 2010 as the new practices mature.

Salary growth frozen: The flip side to the growth in hiring is that most industries have slackened increment structures and kept salary revisions and growth to the minimum - a few even brought the numbers down. In general, organisations kept salary growth at very modest single digits, the median growth statistic being 5.25 per cent. The good news, however, is that a significant number of employers have rewarded select profiles with a fairly large dosage of increment.  

Skills win big: This trend, perhaps, is shaping the future more than any other. Salary growth is appreciably higher for profiles with sought after skills.

What this means is, industry is handpicking highly skilled profiles and paying them much higher increments than the rest. For instance, Agriculture / Agrochemicals businesses in Bangalore have rewarded many of their sales profiles with increments in excess of 10 per cent. Likewise, many an engineering and a blue collar profile received similar hikes across multiple cities from automobile companies.

Telecommunication and energy new growth engines: Telecommunication and Energy stepped up hiring by about 16 per cent (combined - and which beats the average quarterly market growth by a wide 4 per cent) and increased salaries by 7.5 per cent or more. Telecommunication companies in Bangalore, Chandigarh, Delhi, Mumbai and Pune as well as Energy businesses in Hyderabad, Mumbai, Pune and Bangalore upped the ante and doled out a 10 per cent plus increment for several profiles.

IT puts up a lackluster performance: Salary Growth stays down, just about breaching 7 per cent, in the Information Technology (IT) sector. The sector remains cautious in terms of salary growth, but has begun hiring just as most other industries have. However, IT businesses in Ahmedabad, Bangalore and Pune have rewarded select profiles with increments in excess of 10 per cent, just as in case of other industries.

The services sector starts early: The Services sector is providing a much needed fillip to salary growth, with an average 6 per cent growth, contrasted with the rather low, sub-5 per cent salary growth average for the manufacturing sector. Telecommunication, healthcare and information technology - in that order - have been driving this growth. Energy, automobile & allied and FMCD - in that order - are the only manufacturing sector industries to drive salary growth at 5 per cent plus levels.

A clutch of industries remains conservative: Agriculture / Agrochemicals, BFSI, FMCG, hospitality, manufacturing and retail maintain sub-5 per cent increments at an aggregate level. The increments vary by city and by profile and so at specific city levels increments could still be high. For instance, agriculture / agrochemicals pays well in Bangalore and Kochi, manufacturing in Bangalore and Pune and retail in Bangalore and Mumbai.

City trends see significant change: Bangalore (6.4 per cent), Mumbai (6 per cent) and Chennai (5.75 per cent) lead growth, with Chennai dislodging Delhi from the top three high growth cities from the previous year. Indore, Jaipur and Ahmedabad are cities with the lowest growth rates in salary.

Attrition under control: Most industries have brought attrition under check and across most profiles. Across industries and cities, attrition rates are a shade below 8%, while for industries such as BFSI, FMCG and Manufacturing, the number is just above 6%. Indore, Jaipur and Ahmedabad see the least attrition (about 6.5 per cent on an average) while Bangalore and Chennai have the highest levels of attrition (about 8.7 per cent on an average).

Skills rewarded equals better longevity: Businesses that structure incentives right are able to better retain highly skilled profiles. Sans a few exceptions, such as Industrial Manufacturing & Allied and BFSI, industries that have higher payouts for better skilled people are the ones that are able to retain them better. agriculture / agrochemicals, ITeS and retail are cases in point.

(The entire report can also be viewed on www.teamlease.com)