Gig demand swells, but workers are hard to find

The summer heat is scorching staffing firms, especially those providing temporary services to various industries, as demand for workers rises but the cost of meeting the demand also rises in parallel.

- Devina Sengupta & Suneera Tandon

Demand for gig workers from companies in consumer, banking and logistics sectors has risen 15-20% in tier II and III cities, but staffing firms said they are hobbled by a rise in the cost of relocation of workers from different states, as well as high attrition—sometimes a temporary worker may last barely a month, necessitating the added cost of a replacement.

"There is a 20% increase in costs in a year's time along with an attrition of at least 25%," said Sunil Chemmankotil, country manager of staffing firm Adecco India. "This means when we get a workforce from other states in northeast or central India to one of the southern states, the workforce stays for a few months (only). We then have to get replacements, which leads to more costs since we cannot bill the client again."

The problem is more for industries like manufacturing, which no longer want cheaper talent from other states. "Clients want local talent and not depend on manpower from other states," Chemmankotil said, adding that local talent is scarce and expensive in many states, "which makes hiring tougher now".