IBM Bets Big On India’s Contract IT Staff
IBM is spending heavily on IT contract workforce hiring in India. The US-based technology company is spending over $150 million annually to hire contract IT staff, which as per estimates translates to more than 15% of its overall workforce, reads an Economic Times report, which obtained the data from a leading staffing firm who do not wish to be named.
Contract employees are hired through staffing agencies or third-party IT vendors. IBM is seen to be the biggest spender in this area, apart from companies such as Accenture, Microsoft and Cisco who are spending over $80 million each on maintaining a vast pool of contract workforce, while Cognizant, Oracle and HCL Technologies shell out over $50 million each to augment their IT staff with contract resources that work as an extended IT team.
IBM is estimated to employ close to 1.5 lakh people in India as part of its focus to increase the India headcount and steadily reducing its US employee numbers. IBM employee organization Alliance@IBM puts the US figure for 2014 at 83,000, down from 127,000 in 2006. However, the report notes that this year, the tech major has even greater plans, which states that assuming most of the contract staff is junior staff with an annual salary of about Rs 4 lakh, IBM will have over 22,000 people in this category.
Globally, the IT staffing market is a whopping $180 billion industry. India’s has grown from a modest $700 million in 2011-12 to about $1.2 billion in 2013-2014. Statistics from the Indian Staffing Federation (ISF) showed that industry employs 1.7 million flexi workers in India. The ratio of flexi staff to work force is 0.43%, considerably lower than in the US (1.8%) and Europe (1.6%).
“Contract work is not limited to entry-level office support roles, professionals at all levels and various sectors are working on a temporary basis,” says Chris Mead, a recruitment specialist in his blog.
Mead and several other experts see employers engage contract workers as a long-term solution to their staffing needs and candidates are making the most of this trend as there are many advantages for them too.”
“IBM’s spend on contract staffing in India is smart given the talent base in India, and despite the rising cost structure. In the war for talent, skilled resources are needed across the world. India happens to have great depth for technology resources,” Ray Wang, CEO of Constellation Research said in the report.
Experts believe in the IT/ITeS domain, contract hiring provides quick access to skilled technical people and is a cost-effective alternative to supplement existing IT staff without incurring recruitment or training costs.
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