India Builds Business Agility with Offshoring and Contingent Workforce Strategies
By Thammaiah BN, Managing Director of PERSOLKELLY India
We’re living in increasingly volatile times, yet I’m pleased to say that business prospects for India remain bright on many fronts.
Despite a recent lowering of the country’s growth forecast by the IMF, India will remain as one of the fastest growing economies globally for the financial year 2022-23 where GDP growth projections currently stand at 7.4% - being more than twice the rate forecast for China (3.3%) and three times higher than the United States (2.3%).
A large inflow of offshoring work continues to impact the Indian economy significantly. Encouraged by attractive fiscal incentives, an investment-friendly environment and lower living costs, overseas companies are embracing offshoring strategies and transferring activities of specific business processes to India. This approach particularly appeals to businesses based in high-cost markets overseas.
India’s large talent pool is another big draw. India’s future-ready workforce provides plentiful staffing resources with the right knowledge and niche skills to quickly fill gaps in growth-hungry companies based in Europe, North America and other parts of Asia. At the same time, Covid-19 and other fast-evolving external factors have accelerated the trend for companies to turn to contingent workers to build an agile, future-proof business. India’s workforce has been quick to embrace flexible work arrangements.
In this article, I’ll share more details about the workforce landscape in India.
India’s Workforce Of The Future
The explosive growth of emerging sectors in India, such as E-commerce, Fintech, and App Development, is accelerating the demand for digital-savvy technology talent. On top of that, we’re seeing companies around the world looking for more help to ramp up their digital transformation. As a result, the Information Technology (IT) sector is booming across various locations.
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Bangalore, known as India’s Silicon Valley, is home to the largest number of high-growth companies in India and ranks fourth overall among Asian cities. A hotspot for start-ups, the city has considerable demand for technology talent, especially those with cutting-edge skills in Artificial Intelligence (AI), Machine Learning (ML) and Cloud Computing. DevOps, UI/UX and IoT skills are also needed to support rapid product development to cater to fast-changing consumer trends and evolving business preferences.
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India's so-called "millennium city" Gurgaon is the second biggest technology hub in the country. Here, demand for IT talent comes from start-ups and IT services companies.
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In other parts of India: Chennai, capital of the Indian state of Tamil Nadu, Pune in the western Indian state of Maharashtra, and Hyderabad, capital of southern India's Telangana state, all see high demand for IT services talent.
Growth Of Fintech And E-Commerce
We expect India’s Fintech sector to evolve rapidly in 2022, aided by accelerating financial innovation. A Boston Consulting Group (BCG) study in association with the Federation of Indian Chambers of Commerce and Industry (FICCI) predicts India’s fintech industry will grow to US$150-160 billion by 2025. With the Indian banking system rapidly transforming from a physical to a digital banking model to cater to fast-changing customer preferences, financial companies are increasingly looking for AI, ML and other high-quality technology specialists.
Boosted by the impact of the pandemic and nationwide lockdowns, the E-commerce sector in India has witnessed a surge over the last two years, penetrating Tier II and Tier III cities and adding millions of new online consumers. According to the IBEF, the Indian e-commerce sector will surpass the United States to become the second largest e-commerce market in the world by 2034, increasing the demand for talent with skills in Cybersecurity, Cloud Computing, Enterprise Resource Planning, AI, ML and Blockchain.
Flexible Employment Grows In Popularity
Contract hiring continues to grow in popularity in India, and we’re seeing continued growth and favour for a Contingent Workforce. Our Workforce Insights Report 2022 revealed that India was among the top three countries in the APAC region, where 57% of employers surveyed said they plan to expand the Contingent Workforce to 15% and above in the next two years.
Contract hire allows quick access to talent in various emerging sectors with niche, high-demand skills. This is specifically useful in Technology and other emerging industries which work on innovative products. Therefore, the demand for tech experts ranging from fresh graduates to experienced professionals has seen steep upward growth. This is further confirmed by our Workforce Insights Report findings, which showed contract hiring as the highest within the Information Technology space (50%).
Meanwhile, the Vietnamese government continues to bring in reforms and investment incentives to make the country more accessible to do business. These efforts are bearing fruit, as the country received $4.42 billion in foreign direct investment (FDI) in the first quarter of 2022, a 7.8% increase from the previous year.
We've also seen steady demand in India's Contingent Workforce space for Non-Tech skills, such as:
Frontline Sales/B2B staff
Business Analysts – Business Intelligence (BI) and Tableau proficient
Marketing – Social Media Managers and Content Developers
Customer Care/Telesales staff
Engineering roles - including Chemical, Electrical and Structural
Delivery staff – particularly for E-commerce
Gig Economy
The aspirations and expectations of Indian talent continue to evolve. Traditionally, talent in India preferred secure employment with guaranteed income. However, job instability during the pandemic exposed many talented professionals to the path of self-employment, with India seeing a 46% increase in new freelancers from Q1 to Q2 in 2020. Hence, task-based or project-based work engagements are gaining popularity in the Indian job market, which will help the freelance community expand in value to US$20-30 billion by 2025.
The receptiveness of India’s workforce fits well with a growing trend for overseas companies to embrace Contingent Workforce strategies. It enables companies to quickly fill skill gaps - especially in technical support, digital marketing, graphic design and communication, supply chain, as well as logistics - and to achieve project goals cost-effectively.
Leadership Roles
Interestingly, we’re seeing more start-ups and large corporations looking to the Contingent Workforce for short-term and interim leadership roles. Skills in business continuity, talent retention, and the ability to create an inclusive work environment are in exceptionally high demand. Companies are becoming more open to gig CXO profiles for periods of between six months and one year; perhaps the purpose of hiring a functional specialist is to bridge a gap before a more generalist leader can take up the full-time position.
Faced with financial constraints, start-ups often can’t afford a full-time leadership hire, so they might opt for C-suite professionals on-demand on a short-term basis. For example, an organisation could hire an experienced CFO in India for one month to help provide financial analysis and funding guidance.
Why Do Businesses Choose PERSOLKELLY As Their Preferred HR Partner For Offshoring and Contingent Workforce Solutions?
Firstly, detailed attention to statutory compliance with labour and employment laws across the region is crucial for the success of implementing and managing a contract workforce. PERSOLKELLY places a particularly strong emphasis on these regulations and has a deep understanding of the complexities involved, including matters of data privacy. As an on-the-ground staffing workforce solutions partner, we closely monitor the evolving landscape to ensure smooth and seamless hiring and managing processes to provide end-to-end contract workforce solutions that help solve workforce problems faced by our clients.
Secondly, client engagement is what sets PERSOLKELLY apart. We’re always available when our clients need us; a human is ready to take a call, respond and solve any problems. Our service levels are second to none, which matters enormously in this dynamic market.
If you would like to know how PERSOLKELLY’s Regional Talent Solutions can help your business to grow further by adopting the offshoring and contingent workforce strategies, please reach out to us and we will be happy to share with you our past success case studies, as well as discuss the best plan for your business.
Connect with us here: TalentsSolution@persolkelly.com.