Shyamal Majumdar: Benchmarking temp salaries

THE HUMAN FACTOR

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.