Fueled by seasonal demand for temporary workforce and growth in sectors like e-commerce, retail, IT, and manufacturing, India’s flexi workforce is projected to grow up to 9.16 million by FY27, up from 7.2 million in FY25, according to the latest report from the Indian Staffing Federation (ISF).
Even though a significant portion of the flexi workforce (38%) is currently employed in logistics, BFSI and manufacturing sectors, the report said that e-commerce is driving the hiring growth over the past 5 years with an average annual growth rate of 19.6%.
Report attributes the growth of flexi workers to 3 key sectors
The report said that industries such as e-commerce, retail, and hospitality experience significant demand surges during peak seasons, such as festive sales, which necessitate a temporary increase in staff. “To address these needs efficiently, companies are increasingly hiring temporary staff to manage short-term projects and seasonal workloads, making a strong case for the wider adoption of formal flexi work models,” it said.
The shift towards a more flexi workforce over the next 5 years will be driven by the sustained adoption of flexi workforce across the corporate India and a broad-based economic recovery. In terms of revenues, the flexi staffing industry is expected to grow to 2.58 lakh crore by FY27, up from 1.9 lakh crore in FY25, the report said.
Rise in flexi workers to match the growth in the gig workforce
As per ISF, gig workforce has shown the fastest growth (13.3%) among all types of workforce between FY23 and FY25 followed by formal (8.8%) and informal (0.3%) segments. Though over the next two years, the growth in flexi staffing (12.6%) is likely to match the growth in gig workforce (12.9%).
To be sure, flexi workers are different from gig workers since they are formally employed by staffing companies offering traditional employment benefits and protections such as provident fund, employee state insurance scheme (ESIS), and medical coverage.
Gig workers are often not entitled to such benefits. Additionally, the flexi staff deployments are expanding beyond traditional roles to include specialised positions and are reaching beyond metros. “The emerging growth in tier-2 and -3 cities is particularly encouraging, as it signifies a deepening of formal employment, offering temporary workers the security of recognised employment, fair compensation, annual benefits, and health benefits,” said Lohit Bhatia, president of ISF.
In general, companies have a lot of advantages to hire flexi workforce. This includes ease of hiring and downsizing the workforce based on the market conditions, enabling cost optimisation. The staffing agency manages payroll and other administrative tasks, minimizing the employer’s involvement. A significant portion of the flexi workforce – nearly 55% – is being hired by entities based out of Maharashtra, Karnataka, Uttar Pradesh, Tamil Nadu, and Telangana, according to the report.