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Tech turns to flexi staffing to keep its bench from idling

The $177 billion tech services industry is expected to employ 7,20,000 flexi staff in 3 years.

, ET Bureau|
Updated: Aug 21, 2019, 11.30 AM IST
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Flexi staffing
Businesses that adopt subcontract and flexi hiring models will be at an advantage, given the changing speed of fulfilment, said Pankaj Khanna, vice-president, talent acquisition at mid-tier IT services firm Mindtree.
India’s IT industry is renewing a push towards flexi staffing, with more companies reducing bench strength, or those employees who are not on projects.

The $177 billion technology services industry is expected to employ 7,20,000 flexi staff — people recruited for a short duration and not on company rolls — in three years, according to estimates by staffing firms.

The sector reported nearly 5,00,000 flexi staff at the end of December 2018. That is expected to increase 44% by 2021, driven by increasing demand for digital technology skills, a waning bench and cost-efficiency mandates, according to the Indian Staffing Federation (ISF).

Infosys, Wipro, TCS, Cognizant, HCL Tech, Tech Mahindra, Mindtree and others are seeing faster growth in digital technology-led services. This shift from legacy businesses has prompted automation across ranks and employee operation levels and is helping deliver projects faster.

Two trends are making flexi hiring interesting, said Rituparna Chakraborty, cofounder of Teamlease and president, ISF.

While companies are seeking faster deployment for certain niche skills, people with skills in artificial intelligence, machine learning and other emerging skills want to be part of a gig economy unlike a typical corporate structure, she said.

“Enterprises have a clarity today that the future of work will be much more technology driven. As more organisations, both in technology and non-technology sectors, see a fastpaced shift, flexi staff is becoming a way of life for many. For IT services companies, getting talent for niche skills becomes a challenge and that is resulting in a steady rise in demand,” Chakraborty said.

Businesses that adopt subcontract and flexi hiring models will be at an advantage, given the changing speed of fulfilment, said Pankaj Khanna, vice-president, talent acquisition at mid-tier IT services firm Mindtree.

“For requirements that are short term, it makes business sense to leverage the subcontracting/flexi hiring models without increasing headcount,” he said. The Bengaluru-headquartered company said it operates at the industry average for subcontracting or flexi hiring, which varies between 10% and 15% (of overall workforce). The IT-ITeS sector currently employs more than 4 million people.

One of the top-five IT companies, Tech Mahindra, is also “actively promoting” flexi hiring.

“Talent trends around the world indicate that ‘top talent’ today is looking at employers who allow ‘benefits’ of work hours, location, job role and compensation. Gig workers and part-time workers are getting very popular as organisations like Tech Mahindra hire for ‘niche’ and ‘rare’ skills. We are actively promoting hiring of flexible workers in these niche areas,” said Harshvendra Soin, chief people officer.

Industry lobby Nasscom, however, thinks the bench model will stay even if companies look for “just in time” talent.

“Flexi hiring will happen, but it does not mean there will be no bench. It (flexi hiring) will be much more for jobs that companies do not want to hire such as basic coding, testing,” said Sangeeta Gupta, senior vice-president, Nasscom. Large IT players may not “adopt this in a big way”, she added.

Some companies are also hedging against fast-changing skills in the sector, said Kamal Karanth, cofounder of Xpheno, a Bengaluru-based staffing agency.

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