TN tops among southern states by engaging 33 pc of 10 million outsourced workforce

Chennai:

Tamil Nadu tops among the southern states in its dependence on outsourcing workforce by engaging 33 per cent of the estimated 10 million outsourced employees working in various sectors excluding construction sector in south India.

According to a Report on Manpower Outsourcing in Southern States released by Confederation of Indian Industry here on Tuesday, manufacturing, retail and government sectors emerge as the largest users of outsourced employment.

Among those sectors thriving on outsourced employees, manufacturing sector is the largest revenue contributor having a share of 41 per cent, the study said.

It was also revealed that blue collared employees account for 58 of the total number of employees, grey collared for 31 per cent and white collared for the balance 11 per cent.

While the large service providers are providing higher order services, the smaller firms are mainly focusing on soft services and there is a proliferation of players in the soft services business primarily due to low entry barriers, ease in recruiting and training people, lack of requirement of specific skill sets and higher demand.

The study also found out that there has been a 30 per cent increase in the number of contract employees over the last three years and the organisations

expect outsourcing to grow in future too.

According to the 132 service providers who were surveyed, the addition to employees that has been growing at nearly 40 per cent in the last three years and is expected to grow at 15 per cent in future.

The organizations expect a shift to occur from focus on quantity to that on quality, which will yield a more

productive and flexible workforce. The industry will continue to be characterized by large and smaller service providers, the report added.

Interestingly, the requirement for outsourced employees is met by a host of staffing providers and contractors, which is over 30,000 players in the south.

These contractors supply manpower - daily or weekly wage laborers, and are active mainly in the construction and manufacturing sectors. Additionally, in each state, there are several unregistered contractors who operate with less than 15 personnel. Tirupur, for example, has nearly 1,000 such contractors, the report said.

Organized staffing service is a relatively large industry with billing of over Rs 120 billion, and the presence of 8,500 service providers in the South. These service providers offer staffing solutions to various industry verticals across different services – soft, engineering, etc and supply white, blue and grey collared workers. They adhere to guidelines set by the Labour department and comply with labour laws and contractual obligations.

While the very small and small players account for over 95 per cent in terms of the number of players, the large and medium players generate over 75 per cent of the revenues. Large firms such as Teamlease, for example, work with over 15,000

candidate profiles, servicing three sectors, 67 industries and 474 functions, the report added.