Staffing companies have become a vital necessity for the business world. This has immensely increased the size and scope of IT staffing. IT companies are always on the requirement for skilled human resources to fill up their permanent or temporary positions. The job of a staffing company holds more prominence as it matches the workforce requirements of the business with equally qualified candidates who possess the desired skills and expertise.
In this era of constantly changing business dynamics influenced by the COVID-19 pandemic, IT staffing companies, despite the changing market dynamics, have the immense opportunity for transitioning themselves from being just labour resources intermediaries to becoming growth drivers of the IT companies. Change is the new mantra. And those who adapt to the ever-changing business and staffing environment have the wonderful opportunity of flourishing in the ever-expanding IT staffing industry despite the current hardships.
So, let us check out the size and scope of IT staffing in India.
Over the past two decades, the size and scope of IT staffing have grown from a meagre $100 million business to an elephantine $6 billion industry today. The emergence of sunrise sectors—such as e-commerce, telecom, insurance—along with multiple employment opportunities for entry-level executives and shorter job tenures for senior executives have together contributed immensely towards the growth of the IT staffing industry.
Highly skilled industries, such as IT and engineering, have significantly increased the size and scope of IT staffing to meet the cyclical needs of businesses. Nowadays, technology professionals view smaller assignments as flexibility and opportunity rather than insecurity. Major brands are adopting contractual hiring models for a trial-run with their talent before permanent onboarding. What was earlier an MNC driver hiring model is now largely driven by major Indian enterprises. Like most Japanese companies, large Indian corporations have built their captive staffing firms solely for their own utilisation. This has also influenced the overall growth in the size and scope of IT staffing.
The market size of the staffing in India stands at $6 billion, which is the thirteenth-largest in the world and is consistently growing at the pace of more than 15% annually. At this pace, the Indian staffing industry is poised to become the sixth-largest in the world by 2025. What adds to this burgeoning growth rate is the fact that the global staffing industry has already fully developed and the rate has flattened out at 1 to 2%. Plus, factors such as GST and demonetisation have pushed for the formalisation of jobs at a very fast rate. Additionally, the company’s appetite for immediate hiring of employees has also increased remarkably.
Many large BFSI and consumer brands are required to reach out to the hinterlands of India to ensure proper market penetration. Such an expansion activity requires huge workforce resources, including outsourced staff, to meet their logistical and statistical needs. Rapid growth in allied industries, such as real estate, has also fueled the demand for a large contractual workforce. All these aspects will be critical to the future growth of the staffing business.
Nonetheless, staffing in India is a huge industry. There are approximately 23,500 recruitment firms in India. And more than twelve staffing companies produce a turnover of more than ₹1000 crores—a couple of these companies are even closer to the ₹5000 crore turnover mark. These staffing juggernauts are increasingly spreading awareness about the advantages of staffing and recruiting to large organisations. All these features are propelling India towards the $20 billion staffing mark to overtake Netherlands—currently the sixth-largest market—by 2025.
The nature and scope of staffing are much wider than the mere acquisition of a skilled workforce. It covers a wide spectrum of employee responsibilities, including providing adequate internal growth opportunities, avenues for developing skills of em[loyees, and providing them with fair compensation. Nevertheless, staffing is a continuous function which is actively performed by the human resource department and the management of the company.
The core functions or scope of staffing includes effective planning of the workforce size, employee administration, planning and managing employee performance, creating and managing employee development plan, and performance appraisal with fair compensation.
The COVID-19 pandemic has affected businesses across the world. Like most sectors, the IT staffing industry has also been severely impacted by the pandemic, with revenues starting to decline to their lowest in decades. Many businesses are expecting a slump of more than 20% in their business due to the pandemic.
However, there is a silver lining to the IT staffing sector. Like most sectors, IT recruitment has become work from home. Companies have rapidly adapted to this pandemic and are quick to change their operational strategies to accommodate new rules of operations in this pandemic era. Many IT companies have successfully transformed into a work from home or remote enterprise to maintain productivity and to offset the impact of the pandemic. Therefore, IT staffing has become a work from home enterprise with most recruitment processes now being performed remotely.
These mobility restrictions, staff restrictions and extended lockdown phase have compelled many companies to seek innovative ideas to sustain and maintain their workforce in these testing times. Plus, these times have also resulted in enormous new opportunities for the staffing companies.
The immediate need for staffing companies is to acknowledge and understand the evolving dynamics of the business and accordingly transform or adapt to the new changes. This can facilitate staffing companies in transforming from just being labour market intermediates to future drivers of business for IT companies in India.
The horizon holds many growth and expansion opportunities for IT staffing in India. The current situation is temporary, and things will change for the better. In fact, this pandemic will usher in an influx of new types of job roles that were never imagined before, which will further enhance the size and scope of IT staffing in India.
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