Industry specialists say that there is an opportunity for half a dozen billion dollar staffing firms to emerge from India in the next decade. Staffing firms are expected to address the growing demand for niche talent in different industry segments in the country such as engineering, IT, life sciences and retail among others in the years to come. Industry experts also say that close to 3 million employees in India work through the staffing route in the country and it is currently a $6 billion market in India. “Staffing is an impact business which will enable millions of Indians into formal employment. 15 million people in the United States work in this mode which is the largest staffing market. By 2025, India shall overtake the US as the largest employer of contingent workforce,” said, Kamal Karanth A, who leads the staffing business, along with investor relations and marketing at the Bengaluru based specialist staffing firm Xpheno.
Interestingly, as per market reports the specialist workers in engineering and the IT industry forms half the value of the $6 billion Indian staffing market. “Its high value business as they represent the higher salary part of the employment market. By 2025, India would be in the top 6 staffing markets in the world overtaking Netherlands which is today at the 6th place. The Indian IT industry currently employs about 2.6 lakh staffing workers in its overall workforce size of 3.9 million. That’s about 6-10 per cent of their workforce through specialist staffing firms. This is estimated to increase to about 15-18 per cent,” added Karanth.
Experts say that the specialist staffing will see high penetration in areas such as IT, engineering driven primarily by the requirements from the auto and construction industry, healthcare including home care and diagnostics, accounting due to requirements driven by changing regulations and seasonality and sales support with a larger penetration in rural areas.
Karanth feels that in the IT industry there has been an increase in technology skill gaps, reduction of the bench in IT services companies, the growth of Managed Service Providers (MSPs) and in the engineering field, auto companies have to produce electric cars without compromising on the speed and efficiency. In the automotive sector many companies are investing in R&D that would require specialists and due to the transient nature of skills, companies are taking the contract to hire route. Similarly, construction and aviation industry will have staffing requirements. Karanth also said that health care staffing will also see good growth as there will be a trend of large hospital chains and there are players emerging in the home care and the diagnostic segment. In the accounting segment too there would be staffing requirements as there would be requirements of CAs (Chartered Accountants) for MNC accounting firms to cater to regulatory requirements in India.
“There would also be the requirement of sales and support staff across many industries. Rural penetration is also a need of the hour across, FMCG, banking, insurance, healthcare industries. Today, few large corporates have experienced success through staffing companies in penetrating the hinterland. In the near future there are possibilities of huge consolidation of all the small boutique IT staffing companies in India,” remarked Karanth.