Work from home to spur contract hiring in small cities

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November 30, 2020 7:00 AM

Contract staffing in Tier 2 and 3 cities is expected to see an increase now that companies are more open to employees working from anywhere, even their homes.

As per the data, there were 21 firms that won under the gold category whereas other 18 firms were placed under the silver category with 13 firms under the bronze category. Representative Image

Contract staffing in Tier 2 and 3 cities is expected to see an increase now that companies are more open to employees working from anywhere, even their homes. The simplified guidelines for the BPO and IT-enabled services would, in particular enable companies to set up offices in smaller cities and towns.  The additional number of contract employees estimated to be added this year by the IT-BPM sector is just about 25,000.  However, Lohit Bhatia, president, Indian Staffing Federation (ISF) believes that increasingly organisations would look to hire not in the top 40 cities but in the next 200 towns.

With the physical presence of employees now less important, the talent in smaller towns can be tapped. “With jobs now moving to the ‘work from anywhere’ model companies especially in the BPM / BPO / ITes sectors will find it easier to employ people in smaller towns,” Bhatia told FE. This would help IT companies to set up offices in small towns and recruit locally. While software firms have been allowing employees to work from home during the period of the lockdown, it may not be possible to continue with that on a big scale since clients –banks in particular–are concerned about data security and, therefore, not comfortable with IT employees working from their homes.

Data analysed by ISF shows the IT-BPM sector will add an estimated 24,900 employees on contract in 2020-21, compared to a little over 10,000 last year. Of the 44,16,000 employees in the IT-BPM industry last year, the number of contract hires stood at 1,11,975, or just above 2.5%. This is expected to increase to 1,36,962 of an estimated total workforce of 45,95,000 in the industry this year, or just under 3%.

The projected increase in contract staffing is expected to benefit Tier 2 to Tier 5 cities. In addition, the reverse migration trend will fuel hiring in these locations adding to employment opportunities in smaller towns. One big incentive for companies to set up offices in smaller cities is that they will save a fair bit on all expenses, including on employees, infrastructure, travel and overheads.

So far, hiring in small towns has been restricted predominantly to retail, e-commerce, delivery and platform-based companies. However, from here on BPM/BPO/ITes sectors are also expected to create employment opportunities in these towns. Whether the job is related to support services or to databases, many more opportunities will now be created in smaller towns. Importantly, these opportunities could be permanent ones unless the government revises the norms which appears unlikely. In particular, state governments would be unhappy if the jobs moved back to the metros and will likely work towards retaining the offices in smaller towns.

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