Over the years, staffing in India has shown remarkable growth with the growth of business and commerce, especially temporary staffing. However, it is difficult to predict the future of staffing in India at this point given the economic slowdown due to the coronavirus crisis. Economy revival looks entirely towards the government’s approach on lifting the lockdown and flattening the increase of coronavirus infection and allowing businesses to become operational. But the impact of coronavirus looks deep. Considering the economic volatility, organizations need to be extremely flexible to accommodate market changes. Hence, looking towards temporary staffing rather than regular staffing could be one of the contingency plans to keep their businesses afloat during such tumultuous situations.
Businesses today are inclining towards temporary staffing as a possible alternative to regular staffing because it offers them the time to focus on their core business functions and at the same time enables them to save on the total cost associated with hiring, onboarding, and training full-time employees. With temporary staffing, they have the liberty of choosing resources based on their time-bound and project-bound needs.
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The predictions made before the coronavirus outbreak may no longer be relevant. Whether it is the overall economy or individual sectors, every aspect is expected to take a substantial hit. It is damage limitation time. So right now, organizations need to look for alternatives that will help them build and maintain business resilience and continuity and keep the revenues flowing. Unfortunately for some industries, the survival was short lived.
COVID-19 impact on the Indian economy
The global outbreak of COVID-19 is expected to have a huge impact on the global economy. When economies as huge as the US and the UK are expected to decline at a staggering rate, it wouldn’t be wise to expect India to be any better. Experts are predicting that India could be heading towards a major slowdown, one that may take a lot of time to recover from.
In a report published by Deloitte aimed to study the impact of the pandemic on Indian economy, it was found that financial institutions like Moody’s, OECD, Fitch, and UBS amongst others have considerably slashed growth estimates for India for the current financial year in the wake of the pandemic. These institutions are predicting a drop of at least 1-1.5% in the growth of Indian economy from the predictions they made before COVID-19 hit India. The worst affected sectors include automotive (decline at 23.1%), power (decline at 18.3%), and IT (decline at 16.2%). With Chinese production projected to undergo a slowdown of 2%, Indian industries could be looking at a loss of close to $350 billion.
Impact on staffing in India
So, how would this sudden dip in the economy due to this global pandemic expect to affect the staffing industry in India? In a recent survey conducted by EY, more than 72% organizations that were a part of this survey said that the impact of the pandemic outbreak will go far beyond the 6-month period. The same survey reveals that 70% of the participants are not too sure whether remote working is the right alternative as there are productivity concerns associated with it. The survey also made it amply clear that companies are now looking to digitize their HR processes and operations. More than one-third of the organizations that were asked for their opinion tilted in the favor of using virtual recruitment methods. At least 1.5 lakh IT jobs are at stake in the next 6 months.
According to industry experts, the pandemic has caused more than 60% of the interviews to be delayed or dropped. Many are expecting it to slow down the delivery of critical projects, which would consequently have a huge impact on revenue generation and profits. This would result in companies delaying their hirings too.
It is still early days for temporary staffing in India, but the figures before this pandemic hit us were pointing at the preference that it has been able to muster in the very little time it has been around in the country. According to the Indian Staffing Federation (ISF), the flexi staffing workforce is expected to grow at a rate of 22.7% and reach 6 million in 2021 from a mere 3 million in 2018. This says a lot about the popularity of flexi staffing in India. This study was done before the COVID-19 outbreak. It would be hard to say how these figures will materialize, keeping in mind the global economic slowdown that we are witnessing today.
Having said that, temporary staffing comes across as a great alternative compared to regular staffing, even in these trying times. Businesses won’t have to hire people full time or pay for other benefits. They can work with people of specific skill sets on a project-to-project basis. Considering the unpredictable future we are looking at now, this could just be the solution for the problems of most businesses and professionals.
In conclusion – What to expect?
Businesses can start relying on temporary or flexi staffing even more. This is indeed a practical solution to most of their concerns. Companies will look to cut down on expenses, and that means a trimming down of their regular workforce. And contrary to popular belief, flexi staffing owing to its benefits, such as flexible work timings and cost structures as well as limited compliance requirements, could hold a slender advantage over its regular counterpart.
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Uncertainty looms heavy as we don’t have enough facts to support how things will pan out in the upcoming months. However, if we want to stay ahead of the curve, we will have to start looking for solutions sooner than later. The next couple of months are very crucial, and would give us a clear indication of how things will work in the times to come. Until then, we need to prepare ourselves and be ready with solutions that will help us to recover faster from the economic mess that this global coronavirus pandemic is expected to cause.
References:
- “Impact of COVID-19 on consumer business in India” by Deloitte on 30th March 2020
- “Flexi-staffing gains popularity in India, to reach 6.1 million workforce by 2021” by TE Raja Simhan on 28th November 2019
- “Covid-19 impact: IT-ITeS sector may trim workforce to cut costs” by Ayushman Baruah on 27th March 2020
- “COVID-19 to delay job interviews; impact hiring: Experts” by Economic Times on 22nd March 2020
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