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Slowdown in temp hiring, wages

June 26, 2009 12:12 IST

The global economic downturn triggered by the sub-prime crisis in the US has impacted the temporary staffing industry. During the first two quarters of the year, growth in hiring was expected to be 25-30 per cent, which is expected to dip sharply to 4-6 per cent towards the third. This has translated into muted wage growth.

The Temp Salary Primer 2009 released by HR firm Teamlease Services on Wednesday noted that over the past few years 'hyperinflation' in employee costs made India a difficult place for entrepreneurship to bloom. This, according to Teamlease, has fillipped broadbased hiring in the temp industry over the past year, besides rewards for skills.

However, the temp industry has witnessed deceleration in wage growth since January this year as compared to previous years. Another unexpected development is the shattering of the belief that temp hiring sees a spike during an economic slowdown.

"On the contrary, temp hiring has slowed down," said Rajesh A R, vice-president, temporary staffing, TeamLease Services.

According to Rajesh, "The biggest upsides over the past year have been higher returns on skills and the clear blunting of hyperinflation in employee costs. Rewards are now beginning to get more differentiated. The rise in overall hiring standards is also creating huge productivity pressures on employees whose salaries had got ahead of their capabilities."

According to the study, the automotive industry prefers those with low to mid-level experience and also holds promise for freshers. About 20 per cent of all temps hired are freshers with a good number of them going to the engineering, sales and marketing and administration functions.

In the consumer durables sector, growth rates in temp hiring at between 6 per cent and 11 per cent, look better than in most other industries. In the case of the food and hospitality industries, the report shows that while temps have witnessed better absorption rates in Goa, Delhi, Mumbai and Kochi, salaries are comparatively higher in Bangalore, Delhi and Mumbai.

The Temp Salary Primer 2009 is a report on the skills and salary data of over 75,000 temporary staff working across 264 different profiles, 13 industries and eight functional domains in India. Locations covered in the Primer are Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi, Goa, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Lucknow, Mumbai and Pune.

The healthcare industry has found lower salary growth a blessing, with hiring of temporary staff increasing 21 per cent in 2009. "We are able to hire better staff at lower salaries, especially in the case of customer relations executives, because of the slowdown in the IT/ITeS sectors. But our scale remains the same," said Dr Umapathy Panyala, CEO of Apollo Hospital in Bangalore.

Retailers like Titan are understood to have increased the salaries of their temporary staff, company sources said.

BS Reporter in Bangalore
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