The percentage of flexi hires in the IT sector is expected to double to 20% by 2020 as IT companies increasingly outsource non-core activities and focus on high-margin businesses, said a report by the flexi staffing body Indian Staffing Federation (ISF).
"IT firms are swiftly adopting the practice of hiring flexi staff in order to beat margin pressures, maintain lean benches and also facilitate just-in-time hiring in a highly volatile market. Keeping the current situation in mind, we are expecting more and more IT companies to adopt staffing as the preferred means to man their projects," said K Pandia Rajan, president of the ISF. The flexi staffing industry in the IT sector touched $950 million last year, growing 15% in each of the last three years.
The Indian flexi staffing industry employs 1.3 million people; they form 3% of the organized sector employment. This number is expected to touch 9 million and comprise of 10% of the organized workforce by 2025. About 79% of workers in the flexi staffing industry fall in the 21-30 year age group, indicating that flexi workers are hired mostly at entry and junior level positions.
Traditionally, IT companies focused on application development and maintenance, but that's increasingly getting commoditized, pushing IT firms to explore other high margin businesses like consulting where billing is proportionate to deliverables. "The IT sector is moving towards the cloud and virtualization that will create new roles in the industry focused on outcomes," said Nagendra Venkaswamy, MD of India and South Asia at Arista Networks.
"Flexi workforce makes up for 10-15 % of our staff right from highly specialized R&D resources to tech support. With people plugging into their devices on the go, there is a huge shortage in areas like mobile device management," said Pallab Bandopadhyay, HR director in Citrix Systems.
Venkaswamy highlighted how the staffing companies should raise their bar by partnering with IT companies in their growth story. "The staffing industry is where the IT industry was in 2000, when 40% of what the IT companies did was to provide staffing solutions to their clients. So it's important for staffing firms to rise above transactions and add value by contributing to the business outcomes of the client's companies," he said.