Indian IT firms increase contractual hiring to beat US crisis

by Editor 10/27/2008 4:29:00 PM
In the wake of the US economic slowdown, India's big IT firms have increased hiring on a contractual or temporary basis. Consequently, the demand for short-term staffing agencies has gone up, while IT professionals who have been benched for a long time are accepting short term jobs, even those that come with a lower salary, according to representatives of temporary staffing companies.

IT firms are increasingly engaging with IT professionals on a per-project basis because, even though Indian businesses still hold key IT projects, the future demand is anything but certain, says Latha Rajan, director of Ma Foi Consultants, India's largest staffing firm.

Once the project has been completed, companies can decide whether or not to keep the temporary employees who were in charge if implementing it. The temporary IT staff, however, are not being assimilated into companies. “Instead, the period of the contract is getting extended. Permanent absorptions are clearly not happening,” says Rajan.

Since permanent jobs are difficult to come by, IT professionals will often accept temporary ones. As a result, the job offer conversion ratio has improved. A year ago, if five offer letters for temporary IT positions had been sent, only one person would join. “Today, for every five temporary offer letters rolled, 2.5 persons are joining,” says Mr. Rajesh A.R., vice-president of Teamlease Services.

Mr Kishore V.N., Managing Director, Datacore Technologies, shares similar results: “For us, the offer conversion ratio is up to 65-70 percent, from 40-45 percent about four quarters ago.”

IT professionals most likely to accept these jobs are either permanent IT employees who have spent six months or longer on the bench at their firm or recruits whose joining dates have been delayed.

Temporary IT jobs have their advantages, too. Teamlease vice-president Rajesh says: “Several employees who have been retrenched from mid-cap companies want to have the experience of working with tier-one companies, and hence many of them do not mind working on a temporary basis.”

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