Evolution of Temporary & Contract Staffing in India

Temporary Staffing or Contract Staffing existed in India ages back albeit in different shapes and forms. The post-independence era saw a surge in construction and hence a lot of unskilled and semi-skilled workers got deployed in the process – since it was very labour intensive those days. The work typically used to be project oriented and these people used to move from one construction site to the other in search of employment. This practice suited them as their main source of earning was from agriculture. But agriculture was seasonal in nature and hence this was a good opportunity to earn and support their families for the rest of the year. Gradually other industries also started employing such people to address peaks and troughs in their business viz. seasonality in demand and supply.

But few things remained common in this entire model and that was:

  1. These people were paid on ‘daily wage’ basis, the rates of which were pre-fixed between the contractor and the employer.
  2. These people were exploited and were forced to work in unhygienic conditions and without any fixed working hours.
  3. The employment was purely on ‘casual’ basis and they had no social security whatsoever to cover any unforeseen eventualities in the course of their job.

It was only in the late sixties that the Government suddenly woke up to take note of this malpractice and decided to frame a law to control such employment, thus giving birth to  The Contract Labour (Regulation & Abolition Act, 1970 & Rules 1971). The moot idea behind this legislation was:

  1. To define what should be construed as ‘intermittent’ or ‘casual’ nature of job, thereby defining which all establishments would come under the ambit of this law.
  2. To bring a certain amount of transparency in the way seasonal or short term employment was handled. So both employers as well as contractors had to register and seek a license from the Government to be able to employ people on contract.
  3. Provide social security benefits and rights to all the workers (at par with the prevailing labour laws) and ensure that they get a fair treatment similar to that of permanent workers.

Back then the employment of such people was mostly restricted to the industrial or the so called “blue collared” segment. Multiple local contractors, mostly unorganized players were used to deploy people for temporary work. It was only post the liberalization era (i.e. early 1990’s) and with the entry of foreign multinationals that the scope of such work got emboldened. Functions such as sales, service, administration, back-office, customer care and many other core/non-core activities started getting periodically outsourced. Outsourcing of people/task was already an evolved function in the developed economies and hence for MNCs this was a routine protocol to follow in every country that they operate. India was no different. This paved the entry of formal organized global staffing players in the country who followed the footsteps of their clients to India. Soon Indian corporates followed suit and manpower contracting opportunities started to grow leaps and bounds. In the process it created employment opportunities for an entire generation who till a few years back had little career options in-front of them. The Indian private sector emerged as the aspirational employer from a time before liberalisation when the best talent would go to PSUs, a handful of MNCs, or the IAS and other civil services. The focus of job creation also shifted from agriculture and manufacturing to services.

So on the one hand we had entry level jobs getting created and on the other hand we had organized staffing players who acted as conduits/facilitators of such employment which was being recognized as “formal employment” – a far cry from the practice that prevailed in the pre-liberalization era. Today India is poised to become the 3rd largest country in the world to deploy 2.9 million flexi-staff by 2018 (according to industry estimates) and flexi-staffing growth is being pegged at 12.3% p.a. and can generate gainful employment opportunity for 5.7 million educated unemployed.


Indranil Roychowdhury
Indranil Roychowdhury

Indranil has worked in the HR services industry for more than 15 years and has hands-on experience in managing and deploying large temporary work-force. He is the business head of Weavings Manpower Solutions (P) Ltd. He possess in-depth experience and expertise in the areas of Solutions selling, Temporary & Contract Staffing, Operations, HR Outsourcing/ HR BPO Operations, Statutory Compliance pertaining to labour legislation.

With his proven managerial skills he has mentored many colleagues who have become successful professionals in the industry. Indranil has worked with companies like Manpower Group, Genius Consultants and Real Value in the past.