India’s information technology companies are expanding their talent pool by hiring freelancers, project-based workers, independent contractors, and part-time hires as they battle high attrition levels in a sector experiencing a covid-induced boom in demand.
Collectively dubbed as the ‘gig workforce’, these workers are equipped with specialized technical skills to complete pending digital projects and fill new roles that the IT firms need.
In their June quarter earnings calls, software services firms such as Tata Consultancy Services (TCS), Infosys and Wipro announced high attrition rates. Regulatory filings showed TCS had a 19.7% attrition rate in the past 12 months, while it stood at 23.3% for Wipro during the quarter. HCL Technologies’ attrition rate climbed to 23.8% in the June quarter from 21.9% in the March quarter. TCS, for instance, calls its gig workforce the “talent cloud”, referring to a virtual talent pool available for any project from across locations to meet client demand and project needs. Infosys expects more gig jobs to emerge in the domains of Artificial Intelligence (AI), data analytics, product engineering, cloud computing and UI/UX design.
Wipro’s TopCoder, a platform marketplace with 1.5 million freelancing coders, posted a 60% sequential rise in registrations since March 2020.
Tech Mahindra, which hires gig workers for niche skills, has even built an external marketplace called BeGig that enables other employers to hire freelance workforce. The company’s global chief people officer Harshvendra Soin said, “This has helped us create a robust talent pipeline and increased diversity among the workforce”. India currently has more than 15 million freelance workers deployed on tech projects, according to a June 2022 Assocham report, which forecast the domestic gig economy to grow 17% to $455 billion by 2024. Another estimate by India Brand Equity Foundation (IBEF) predicted the country to have 350 million gig jobs by 2025.
“Overall, the growth of gig workers’ consumption by tech enterprises (IT services firms, IT product firms and global in-house centres or GICs) has seen QoQ (sequential) growth ranging from 2% to 19% depending on the nature of talent consumed,” said Kamal Karanth, co-founder of Xpheno, a specialized staffing solutions firm. The long-held scepticism regarding a gig workforce’s efficiency and dependability has been shaken by the pandemic-induced remote work. Karanth noted that enterprises have matured their workforce monitoring, employee management, compliance and information security systems in the last 12-18 months, while also strengthening the legal framework to manage violations and liabilities.
To be sure, over 50% of companies were hiring gig workers when Nasscom and Aon India Consulting issued their December 2020 report on this trend. The report said that the trend in the next five years is upward looking even though gig headcount relative to total headcount is still low, mostly in single digits.