Growth And Gumption

Growth And Gumption
April 11, 2011
Musharraf Zamiri, 30, a physics graduate and a staffer with a Kolkata-based temping (temporary staffing) firm was placed by his employer with an advertising agency, where he had to maintain electronic billboards. One day, as Zamiri climbed a 30-ft billboard, a car knocked off the ladder, leaving him stranded atop. He called the ad agency for help, but the agency said he was not its employee. The temp company directed him to its headquarters in another city. “Finally, the fire brigade came after five hours,” says Zamiri, who quit the next day. This rather comic incident exemplifies what ails India’s Rs 5,000 crore-temping industry, which employs about 600,000 people and is adding more at a rapid rate of 20-25 per cent every year. Zamiri’s experience is at the heart of the key question the industry has been trying to answer while rummaging through India’s numerous labour laws: who is a temp? The industry itself has gone into an introspection mode as it enters its 19th year of existence. But first the raison d’être of the industry, which is best explained through some mean advertising the industry indulged in its early years in the US in the 1960s. Attacking the established management concepts of the time, it said regular employees were “dead wood” and were “choking profitability”. As a solution, temping companies offered staffers on a need basis, offering flexibility and lower costs. It caught on.
PARALLEL LINES: Harsha U., 24, now works with a logistics company in Bangalore, but was a temp with TeamLease for three years. “Practically, I find no difference between a temp and a permanent job,” he says (Bornali B.)
The industry was founded by William Russell Kelly in 1946 in the US when he launched the Russell Kelly Office Service offering inventory management, typing and copying services to Detroit’s auto suppliers. As customers got used to the service, he began getting requests to send the staffers to client’s offices. Kelly began sending the machines and a girl hired as a part-time worker for help. It got so popular that the company renamed itself Kelly Girl Services Inc. by 1957, before becoming Kelly Services in 1966. Temping reached its peak in the US by the 1980s (now, though, it is only about 1.7 per cent of the organised workforce). In the US, even some CEOs are temps. In the UK, 3.5 per cent are temp workers. Temping’s India debut was in 1992 with Chennai-based Ma Foi. As the domestic industry liberalised, temp penetration reached 0.6 per cent in 2010, against India’s 35 million organised workforce.
The real opportunity lies in the world’s youngest workforce of 237 million people in the 20-29 years age group, according to Adecco India. Last month, when nearly 900 workers at General Motors’ Vadodara plant went on an indefinite strike, the company turned to temping firms. Work resumed before production was hit. “When the slowdown happened, several companies had to let go of people. Now that we areseeing a revival, companies want to play it safe by outsourcing several functions to temporary workers,” says Dhirendra Shantilal, senior vice-president of Asia Pacific at Kelly Services, which has been operating in India since 2001. Post-slowdown, temping companies are seeing a spurt in demand. “We have been signing 20-25 new clients per month for the past six to eight months,” says Sangeeta Lala, vice-president, TeamLease.
Besides the big companies, SMEs and service sectors, too, are increasing their temp worker base. For example, telecom, consumer durables, retail, IT/ITeS, transport, healthcare, real estate, construction, etc. On the back of such demand, global leaders such as Switzerland-based Adecco, Ma Foi Randstad, US-based Kelly Services and Manpower have grown to 106,000, 65,000, 20,000 and 28,000 temps, respectively. Domestic player TeamLease has scaled up to 75,000 temps. But their share of workforce remains low. “Nearly 130 million are temporarily employed in organised and unorganised sectors; more than 99 per cent are in unorganised sectors,” says Manish Sabharwal, chairman of TeamLease.
Adecco India, a subsidiary of the world’s largest temping firm, estimates the staffing market volume to touch 1 million by 2015. Globally, it is a $300-billion industry, and fragmented — the top 10 players account for only 26-28 per cent of the total manpower outsourcing spend. Cost optimisation is temping’s biggest pull. By employing temps, companies are able to control staff costs by as much as 20 per cent over a period, especially if projects are not finalised. “We hire temps at short notices to man the front desk in select areas in sales and after-sales services,” says Arvind Saxena, director of marketing and sales at Hyundai Motor India. “They are taken purely for temporary jobs and are not considered for regular engagement.
However, if their skill level matches, they are taken in.” TTK Healthcare uses temps for “selling in retail outlets”, says Jagadeesh Rajkumar, HR head of consumer product division. Dhananjay Bansod, chief people officer at Deloitte India, says, “The larger gain is in meeting sudden demand and to not have people on bench and ruin own cost.” Deloitte India hires temps to serve low-end jobs in IT and in other profiles where there is no recurrent need