Job market uncertainties can lead to more temp hiring

SkillingIndia on November 27, 2012 Comments
Ashok Reddy, the Managing Director of TeamLease in a discussion with SkillingIndia.com. Excerpts of the interview:


“We believe the market will continue to stay consistently warm for now and will lead to incremental hiring,” states, Ashok Reddy, MD, TeamLease.

SkillingIndia: Given the slowdown in the job market, what’s your assessment on hiring trends for the upcoming year? Any particular sectors or industries that are affected?

Ashok Reddy: There is a cautious approach in the job market to hiring and adding headcount in organizations. Companies have been bruised in the slowdown of 2009 that came after the exuberance of the prior period. There were many knee jerk reactions then and companies through retrenchment let go of fat and muscle. Sectors like BFSI and Telecom led the pack here. Now, they are looking to add back muscle slowly by judging how the market is playing itself out through the global cues.

We believe, across sectors there will be cautious optimism towards hiring and it will be a quarter on quarter visibility rather than one being able to project for the long run. Companies will continue to build on key skills and look to either have entry level hires or lateral hires during a slow market. Also, since the temp staffing industry is a springboard in good times and a shock absorber in bad times, we will see a lot more hiring happening through the temp route given the uncertainties.

SkillingIndia: In your opinion, when is a turnaround expected to happen?

Ashok Reddy: The Indian and global economic cues don’t seem to be very positive at this juncture. Having said that, there is no strong negative reason to create a knee jerk reaction in the job market, either. We believe the market will continue to stay consistently warm for now and will lead to incremental hiring, but it won’t have a quantum change unless a surprise comes by.

Our economy is still one of the most resilient and I am fairly confident that the current slowdown will pass soon. Major economy indicators like inflation, WIP, IIP, etc. are not worse unlike earlier quarters, and should ideally start improving.

SkillingIndia: What are the pluses and minuses of temporary staffing workforce in India?

Ashok Reddy: Temporary staffing has lot of positives like flexibility in tenure, access to job market, ability to learn on the job, comprehensive statutory compliances, manpower for projects, hiring and mapping capabilities, it addresses the long tail of demand, leverages economies of scale and strong HR support systems.

Some of the so-called minuses are the new concept of employment through temp route, the mindset bias for permanent jobs, and the unorganized and informal sector employment competition.

SkillingIndia: What can candidates opting for temporary staffing positions expect in terms of assessments and training?

Ashok Reddy: Most hiring happens by way of candidates being assessed for the job through written tests and/or interviews. The large volume of temp hiring happens at the bottom of the pyramid where you have a lot of first timers entering the job market. While a lot of learning for the temps happens on the job, it also enables them to earn while they learn. Also, we do industry and company specific assessments and thereon specific induction and functional trainings ramp ups hires to attain speed in their jobs.

These days lot of emphasis is being laid on skilling the workforce and we at TeamLease have also embarked on this journey. So, whether it is through apprenticeships, vocational training, assessment and coaching, industry academia partnership, etc. there are various means to bring candidates up to the mark by providing them the required skilling/training.

SkillingIndia: Any innovative training techniques that TeamLease uses for skilling candidates?

Ashok Reddy: While a lot of training does happen on the job, the other methodologies used by us to reach out and skill the temps are through the phone – for induction, using technology–satellite classrooms, e-learning study circles, learning management systems through the net, upcoming cloud campus, etc.

We have an eight-minute assessment for any first time caller if he or she is willing to undergo it, which then leads to further assessment and training of the candidates. This is a first basic step apart from the ones mentioned above.

SkillingIndia: How often does the curriculum undergo changes to remain relevant to the job market demands?

Ashok Reddy: We do a quarterly curriculum review panel of the course contents by having a panel of academicians. Our teachers and the industry makes the required changes and makes the content relevant and up to date on a recurring basis.

SkillingIndia: Anything you would like to add?

Ashok Reddy: The public policy case for temporary jobs is strong. Most Indians in temporary jobs are labour market outsiders (less skilled, less educated, small town residents, first-time job seekers, women, retired, etc) who have been traditionally disadvantaged. Temp jobs reduce frictional unemployment (temporary mismatches of demand and supply) by providing labour market liquidity and substituting for the shameful performance of employment exchanges. Additionally, these jobs are a non-fiscal market substitute (albeit short term and imperfect) for social security and unemployment insurance.

Most importantly, organized temporary jobs are a bridge to full employment; more than 40% find permanent jobs within a year. Given that un-employability is emerging as a larger problem than unemployment, organized temporary jobs have earned a review of the regulatory cholesterol that holds them back just based on an improved employability corridor more powerful than the low conversions of the Apprenticeship Act.

The case for temporary jobs from a labour demand perspective is also important. Temping increases the strategic flexibility of employers by lowering fixed costs (not total costs). In a country like India, this flexibility creates a viable and important alternative to the blind capital substitution of labour. These jobs also represent cost effective handling of peak capacity requirements (particularly for service companies that cannot inventory their output and cyclical manufacturing like textiles). Global experience confirms that temporary jobs reduce unemployment.

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