Getting the best from your IT Contract Staff

The trend in contract staffing is witnessing a steep rise. The main reason for this trend is that companies are looking at it as a strategy to mitigate the risk and uncertainty associated with the inflow of projects. IT and Technology companies hire contract workers to beat margin pressures, maintain bench strength, and facilitate immediate hiring in today’s highly volatile market.

India is among the top five nations in contract staffing, but it stands out as the only one where contract staffing industry doesn’t have a regulatory body yet. According to the latest data, almost 20% of the software professionals in developed countries including US are contract staff while the number is still only about 5% in India.

But, this is set to change, and the number is expected to touch 20% in India in the next five years. Considering this growth potential in India, major international staffing firms have been taking up staffing in India. Due to this trend, we would see a stiff competition in Indian staffing industry in the coming years.

IT Giant IBM is the biggest spender on IT contract workforce in India. IBM spends over $150 million annually to hire contract IT staff, which is almost double that of the next biggest spender. Out of the overall workforce in IBM, contract IT staff translates to more than 15%.

Accenture, Microsoft and Cisco spent over $80 million each on maintaining a vast pool of contract staff, while Cognizant, Oracle and HCL Technologies shell out over $50 million each to maintain their IT staff with contract resources that work as an extended IT team.

"The flexibility of having a contract workforce fosters incremental growth and allows companies to utilize their existing staff on strategic business initiatives and core competencies. With such a virtual bench there is no upfront cost commitment and you can bring more predictability to hiring budgets," said Moorthy Uppaluri, CEO of staffing solutions firm Randstad India.

But contract IT staffing also has its share of cons. Some of the issues are:

• Training needs : Every time a contract staff is hired, no matter how skilled or unskilled they are, some amount of training is required for them to suit the specific needs of the company.

• Morale issues: Morale problems arise when contract staff are working alongside permanent employees for months. They will be doing the same work and putting in the same effort, but won’t be receiving the same benefits.

• Turbulent work environment: Contract staff are hired mostly for short term projects. This means there would be changes quite frequently which causes inconvenience and impacts the quality of work.

However, one can overcome these issues with strategic planning.

• Training is mandatory even if you are hiring a permanent employee. Also, if a contract employee delivers good work, the chances of hiring him for the next project are pretty high.

• Morale issues can be overcome by making sure contract employees are not working with permanent employees. Organizing different work shifts, handling different projects are some of the ways to ensure this.

• The above solution applies for turbulent work environment issue also.

Apart from the above mentioned issues, the very process of hiring a huge number of contract staff for an IT project can be very cumbersome. Newer innovations and technologies have enabled hiring contract staff on a large scale quite easy. A commendable innovation is the usage of smartphone apps.

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