Flexi Staffing’s Impact on Job Generation and Average Income

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Flexi Staffing’s Impact on Job Generation and Average Income

Flexi Staffing’s impact on job generation and average income

Author: Subramanyam.S

The Indian flexi-staffing industry is expected to witness a significant growth over the next 7 years across industry sectors.

The phenomenal growth in flexi-staffing in India can be broadly attributed to:

  • One, systemic change, with the conversion of workers in the unorganized sector to organized sector which has been driven through the flexi-staffing mechanism.
  • Two, the increase in the number of opportunities owing to conversion and hiring in the new age sectors, millennials as well as the employers have the advantage of checking suitability through flexi-staffing.

IMPACT ON JOB GENERATION

Entry-level job opportunities which form the bulk of flexi-staffing, will certainly see a rise in India as it allows the employers to understand the employee and help them assess a candidate’s potential with ease and affordability. It is therefore a novel method for an employer to explore how an employee fits the company’s culture, test his skills for suitability and hire him for a short term project, and employ him again when needed. In addition, employee morale being a big concern when a permanent employee is asked to leave or terminated from employment as compared to a fixed term flexi staff – easy to hire and end services when not required. It allows the employer to strengthen a team when required, which suits employers facing impulses in the economy and stiff global competition.

IMPACT ON AVERAGE INCOMES

From a demand-supply perspective, the salary for the temporary staff is lower in India. This trend is seen in the developing countries, while it is the exact opposite in the developed economies. In the USA, one sees flexi-staff earning more than a regular employee because they consider it an opportunity to cash upon. However, in India, despite the opportunities of growth, it does not appear to be catching on. The growing millennial workforce face the challenges of employability coupled with geo-limited opportunities which is a compelling reason for choosing the near shore jobs although it comes at a lower cost than that of regular employment.

IMPACT ON EMPLOYERS

Flexi-staffing reduces the overall cost for the employer, as employees under flexi-staff in India are not paid the wages similar to the regular staff. While The Directive Principles of State Policy of the Indian Constitution states ‘equal pay for equal work’, and is backed by adequate legal framework, in reality, industry and employers have found ways and means of containing costs of fixed term and temporary staff. While enforcement can reduce certain areas of exploitation, voluntary compliance by employers must be encouraged by Government through incentivisation, as industries can contribute through this mechanism to skill temporary employees and make them efficient. Such incentives could bolster training potential for temporary / flexi staff as employers treat them as “just in time” hires and provide mostly training on job as opposed to formal training provided to full time hires.

IMPACT ON EMPLOYEES

The lack of suitable employability is one of the biggest challenge today. So far, while discussing employability, one believed that hiring a person and making him work was the prerogative of the employer. Now, with the average incomes rising, and nuclear families being the norm, job seekers for the entry level would also want to understand if a particular job or role suits them or not. So, the opportunity of flexi-staffing gives them a way forward to explore jobs without too much of a burden on them.

While the emergence of the concept of flexi-staffing is relatively new and is growing at a slow pace in India, it could catch on. But, the danger of this affecting income and job security is a debatable point.

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