The flexi staffing industry experienced a decrease in the rate of new job creation during the third quarter of the financial year 2023-24, dropping to 3.8% from the 6% seen in the previous quarter. This decline was primarily linked to a downturn in staffing demands within the information technology sector, as outlined in the latest report from the Indian Staffing Federation (ISF). The ISF, representing firms operating in formal staffing across various sectors, analyzed the hiring trends for short-term contract roles in industries such as e-commerce, retail, fast-moving consumer goods, logistics, manufacturing, hospitality, tourism, aviation, and energy.
Specifically, the field of IT recorded negative staffing growth in Q3 of FY24, showing a decline of -0.4% in comparison to the 1.5% increase observed in the previous quarter. Lohit Bhatia, the president of ISF, highlighted that the IT and IT-enabled services industries have been experiencing limited recruitment activities recently. He noted that while some sectors like the GCC and non-IT departments in companies outside the IT sector have been expanding their workforce through staffing agencies affiliated with ISF, this growth has not been sufficient to offset the reduction in employment within IT services companies. Factors contributing to the sluggish hiring in IT services include challenges related to international projects, geopolitical issues, and margin pressures faced by clients and IT service providers.
Contrastingly, sectors beyond IT witnessed a growth rate of 3.8% in Q3 of FY24, down from 6.1% in the previous quarter. This increase in staffing employment was primarily fueled by demands in industries such as e-commerce, retail, logistics, manufacturing, fast-moving consumer goods, hospitality, tourism, and aviation. The Indian Staffing Federation, a coalition of over 100 members representing flexi staffing companies, aims to advocate for recognized employment standards, diversified work opportunities, and social security provisions for temporary workers, who constitute a significant portion of India's overall workforce.