Paychecks rise for temps as risk aversion grows

More companies are competing for temporary staff in order to hedge their financials

MUMBAI: This will surely bring smiles on the faces of people who work for companies on a temporary basis, are on the payrolls of staffing firms.

In trade parlance, they are known as ‘Temps’.

A study by staffing services firm TeamLease Services Pvt Ltd, says there is greater acceptance of temps by the industry, as seen through the salary hikes that were meted to temps in 2007.

That’s because its less risky for companies to have temporary employees when going into new ventures or projects where there Salaries of temps working in the organised sector in domains such as accounts, engineering, and administration were hiked by 8%, 10%, and 11%, respectively. Moreover, temps working in domains of information technology (IT) and sales received hikes to the tune of 14%, while temps in human resource were given a hike of 13%.

“Normally, salary hikes for permanent employees, or rather those who are on the pay rolls of companies are in the range of 12-15% per annum.

The hikes of 10%, 11%, 14% for temps, that too in a year plagued by global slowdown reflects positively on the temp industry in the country and will encourage more people to work on project basis for companies,” says Rajesh A R, vice-president of TeamLease.

Temps work on either project based activity or time bound activity for organisations but are on the pay rolls of temp staffing companies.

He further says that in 2008 too, salaries of temps across domains are expected to show an average 13-15% rise. Further, tier II cities like Pune, Chandigarh, and Panjim have also shown considerable acceptance towards temps, as witnessed in the average rise in pay in 2007 by 11-14.5% (Pune), 15-18% (Chandigarh), and 13-15% (Panjim).

Average salary hikes in metroes like Mumbai (12-14%), New Delhi (12-18%), Bangalore (19-20%), Chennai(12-14%), shows that temps are rewarded as per their talent and not considered as people handling only single projects, says Sudhakar Balakrishnan, CEO of Adecco India, a staffing firm.

The total temp market in India is estimated at 80 million, of which about 3.5 lakh temps are with the organized sector.

Rajesh adds that the organized temp market in the country is growing at a rate of about 60% per annum. “We have 80,000 temps on our rolls,” he said.

Likewise, other temp staffing companies like Ma Foi Consultants Pvt Ltd, Manpower India and Adecco have 30,000, 15,000, and 44,000 temps currently.

“By the end of 2008, we are likely to have about 55,000 temps on our rolls. There is fast growth in this segment. Many companies see temps as a risk-hedging device when going into new ventures for which success or failure is largely unknown. Companies then believe in taking temps for the specific assignments rather than hiring new workforce,” says E Balaji, CEO of Ma Foi Consultants.

Also, temps also help organizations in scaling up or down their operations as per the need of business.

“Though temping in not very rampant, the industry trends indicate that the market for temps is growing. Temps prove advantageous as they not only help in cost reduction since, they are not on the pay rolls of companies, but also augment competitiveness,” says Ganesh Natarajan, vice chairman of IT industry body National Association of Software &Services Companies or Nasscom, and CEO of Zensar Technologies.
He adds that though currently, temps constitute only 5.5% of Zensar’s workfoce of 4,066, the number will rise this year.

The Teamlease study said temps employed in the IT industry provide a maximum of 33% cost savings to the employers by replacing the permanent staff.

“We do have a few temps with us, specially for our US operations for projects which last for less than 90 days for which we prefer getting temps rather than hiring for full time basis,” says Mukund Menon, head-talent acquisition group, Satyam Computer.

g_priyanka@dnaindia.net