The fear of market downside is weighing heavily on the minds of Indian firm owners as 50% of companies showed a tendency to hire contract workers amid mass layoffs. A study by Spectrum Talent Management, a one-stop solution for global-local human talent management, corroborated the fact.
Businesses do not have the bandwidth to increase their fixed costs by hiring full-time employees (FTEs). The current demand is hence met by the people readily available via layoffs, as per the report. Contract staffing has emerged as a viable short-term staffing solution. Although this is not a long-term fix for the slowdown, it definitely settles the situation.
States such as Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Odisha and Rajasthan have witnessed the highest demand for contractual staffing, as per the report.
Compared to last year, the demand range has a variance of 10%. The demand is higher in FMCG, followed by sectors like e-commerce, manufacturing, retail, logistics and healthcare. IT sector is yet to catch up as compared to other developed nations.
No specific industry comes at the top for contract hires. Industries are season-driven and directly influenced by a subsequent demand spike, such as Big Billion Sale events, the report said.
Male vs female ratio stands at 3:1 which has been prevalent over the past couple of years, implying the gender gap in the gig market.
Contractual staffing is also offering lucrative salaries. The agenda of hiring contract staff is to fulfill the imminent demand, hence offering above-par salaries. The requirements are generally immediate due to critical assignments. The resources sought are typically qualified and have demonstrated prior expertise in the same field, which is vital to achieving project deadlines.
“Hiring of contract workers will be on the rise in the coming months due to the whispers of economic slowdown. As most businesses want to avoid high fixed costs, contract hiring emerges as a viable option. The demand for contractual staffing is being led by Tier 2 cities followed by Tier 1 and Tier 3 as many workers are already remotely based and the cost of hiring from Tier 1 is significantly higher than smaller cities,” said Sidharth Agarwal, director, Spectrum Talent Management.
Tech giants Amazon and Meta fired several thousand employees in 2022. Besides, nearly 50 other enterprises laid off more than 90,000 staff globally.