In the contract employee’s mind: Is it still “hire and fire” perception?

In the contract employee’s mind: Is it still “hire and fire” perception?

There was time in India when job seekers – active and passive alike – viewed contract employment as more of a hire and fire kind of employment. With little data to support their theories about the arrangement, seekers believed that contract employment robs one of certain benefits that permanent employment offered.

While the overall perception of the general populace has remained unchanged, the trends are definitely supporting the cause of contract employment. This is observed mostly among the employers but employees are also catching up with the trend.

Worldwide, the temporary staffing industry averages 140 billion dollars a year and the curve is only moving vertically upwards. India is also not far in catching up with global temp staffing majors like Adecco, Manpower, Kelly Services already actively entering the Indian market in 2003-2004.

With such a wide exposure to the concept and experience of contract employment, it is has to be a wait-and-watch game of will Indian workforce embrace contract labor whole-heartedly. As of now, the trend is moving in favor of contract employment.

A stigma more than an opportunity

Many Indians still associate a strong social stigma with contract employment. Two strong factors exist behind this: 1) fear of loss of benefits otherwise available to permanent employees and 2) job security – “will I be working here tomorrow?” are frequent symptoms during these doubtful moments.

These fears are not without strong cases to strengthen the foundations of the belief. There have been numerous past and ongoing cases and examples of either or both in the industry today. Overseas examples of layoffs and restructuring do little to help the cause.

Moreover, it is no secret that contract employment usually hinders promotion opportunities or transfer to another position; it may also result in not being able to attract a loan from a bank.

However, there is hope round the corner. A handful of recent recruitment studies point towards an increased Indian interest in contract employment. Employees are realizing that contract employment offers more freedom in terms of time. Typical contracts range between 1-2 years after which the candidate can carry on with the firm or migrate to a different employer.

Many even use temporary assignments to determine whether they enjoy working within a selected industry or with a specific company. For others it is a way to work with those biggies that they always dreamt of working for, even if it’s for a short duration.

For employers, it is another way to cut costs. And speaking in favor of the employers, they no longer consider this as a hire-and-fire kind of arrangement. Consider the stakes involved in adopting a hire and fire attitude: if an employee is fired, his experience and knowledge of the company leaves with him. To find a replacement, train him and achieve ROI is much difficult than respecting and appreciating the current contract employee.

Employers have realized that in this growing Indian economy, there is no dearth of jobs for talented workforce hence the employer might as well humor the contract employee as long as he satisfies the set norms of the workplace.

What is the future of contract employment in India?

Currently if one analyses the market, the trend is moving in favor of increased utilization of contract employment – both among the employers and the job-seekers. However, there are bottlenecks in the widespread acceptance.

According to a 2005 petition submitted to the ministry of finance by Executive Recruiters Association, a non-profit organization, “a key issue that is impeding the temp staffing industry growth is the restriction imposed on utilizing temp staff for Core and Perennial work. Since the definition of Core and Perennial work is not clearly stated, it is bound to get interpreted differently by different entities (appropriate governments). As stated in the previous point, this is hampering the employment creation significantly. The restriction (Sec 10 of CLRA) should be removed, thereby allowing utilization of temporary staffing in all functions and industries.”

But the main problem is with people’s attitude. Laws can be changed and adopted easily. Attitudes are very hard to change. It’ll take an entirely new generation of workforce to evaluate, accept and practice the concept of contract employment.

This generation will be free from the external forces that contribute to the development of stigma attached to contract employment. It is only a wait and watch game to see how quickly this new generation will evolve.