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Shyamal Majumdar: Benchmarking temp salaries
THE HUMAN FACTOR
New Delhi
Temporary jobs, you thought, are low-paying and are good
only for those who desperately want to get a foot in the
door with an organisation. This conventional wisdom has now
taken a couple of hard knocks.
First, there is hardly any salary difference between a
temporary and a permanent worker in Indian companies. And
second, temporary jobs of shorter duration (up to five
months) even command a small premium over permanent job
salaries.
These interesting findings from a study called Temp Salary
Primer 2004 — the first of its kind in the country — is
significant as worldwide experience so far has shown that
temporary jobs typically do not pay well, especially for
those without much experience, and only help in allowing
freshers to sample options early in their careers.
The survey has been compiled by TeamLease Services, India’s
largest staffing solutions company.
Though the primer has excluded top management jobs as
variable compensation tends to be an overwhelmingly large
part of compensation in this segment and benchmarking
becomes difficult, it gives detailed figures for jobs with
experience up to five years for December 2003 to December
2004.
Compare some of the figures: a fresher in HR draws about Rs
6,400 a month while his permanent job counterpart gets Rs
5,500. There is a similar premium in salaries in the
functions of sales, accounts and administration.
A temp accountant gets Rs 6,500 a month while a permanent
accountant gets Rs 6,000. A temporary data entry operator
gets Rs 4,700 a month and his permanent counterpart draws Rs
4,000.
The salary advantage shifts to permanent jobs slightly only
for those with three to five years’ job experience. While a
temp HR executive in this category gets Rs 12,500 a month,
his permanent counterpart draws a salary of Rs 14,000.
Similarly, a temp sales representative gets Rs 11,000 a
month compared to Rs 14,000 for a permanent staffer. But
even here there are exceptions.
For instance, a temp Training Coordinator with three to five
years’ experience gets Rs 13,000 compared to Rs 12,000 for a
person with a permanent job.
The other summary of the findings are:
# Temp jobs have direct dependence factor based on locations
and verticals. The best paying region for temp jobs is quite
predictably Bangalore, as the best paying companies for temp
jobs are in the BPO-IT enabled services sector followed by
information technology.
# The fastest growing sectors for temp jobs are expected to
be BPO-ITES followed by information technology and financial
services.
# There is a direct premium in temp jobs for education in
the information technology sector while there is no such
premium for jobs in the manufacturing and FMCG sectors.
# HR as a segment is the most lucrative function for temp
jobs aspirants followed by sales and accounts. While this
trend is seen in more or less all the cities surveyed, the
premium on HR post-graduates is most significant in
Bangalore and Pune.
TeamLease’s effort to benchmark temp salaries is innovative
as it indeed goes a long way in dispelling the faulty
conception of temporary staffing with precarious employment.
This is important as India has around 1,00,000 temporary
workers now, and the market is likely to grow by around 50
per cent annually.
Staffing companies say the temp numbers should grow as they
help workers to get jobs and companies to expand their
headcount even when market conditions are uncertain.
Data from several countries clearly brings out this trend.
For instance, in the US, the manufacturing sector is
estimated to have hired only 0.57 million full-time
employees between 1992 and 1997, while another 0.5 million
temporary jobs were created in the same period, taking the
total job creation in manufacturing to 1.07 million.
Consider the benefits: apart from helping companies respond
better to the changing market conditions and creating more
jobs, temporary staffing helps shift jobs from the
unorganised sector to the organised sector.
This is important for India where the share of the organised
sector in the total employment has fallen continuously to
around 7 per cent in late 1990s from 8 per cent in the late
1980s.
Private sector organised jobs have stagnated at 8 million (2
per cent of the total) for decades.
Advocates of the temp recruitment model say it helps
companies to remain agile, enabling them to expand and
contract their workforce and their expenses with the ebb and
flow of the market.
Because companies can select people with the exact skills
they are seeking for a specific amount of time, temps are
often an ideal, if temporary, solution.
More and more companies are beginning to understand what
benefits these short-term assignments can bring to an
organisation.
Research has also shown that an uptick in temp jobs precedes
an increase in overall employment by three to six months.
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