Manpower outsourcing in South India to grow by 15%: CII Study

January 14, 2012: Confederation of Indian Industry (CII) conducted a recent survey which came up with some findings for the outsourcing industry in South India.

The report states that the outsourcing industry has a potential of business worth around Rs. 27,000 crore. And it is expected that in the near future the intake of employees will grow around 15%. The industry is giving more importance to the quality of work carried out apart from the quantity and as result there will be more intakes of employees. The report also stated that Tamil Nadu will be in the top position as far as outsourcing employment is considered.

In the current scenario, the outsourced employee base will come around four times that of the employment in IT and ITeS sector across the country. And the surprising part is that the total employment base in outsourcing will come around half the size of the total employees in the Government sector of India. Today, the manufacturing and the retail sector along with government sector are the industry which depends on outsourced employment. These sectors are looking forward to give more priority to quality apart from quantity. This would help to improve productivity and increase the flexibility among workforce. 

The report also states that there has been an increase in the number of contract employees. In the past three years there has been an overall increase of around 30%. It is also expected that the number will increase in the near future. The report also states that around 30,000 units of staffing providers are registered. There are also unregistered contractors in every state. The number of recruitment done by these contractors is very high. The contractors are giving more focus to rural and semi-urban areas where workforce is easily available.

The report also adds that there are many challenges being faced by the industry at present. Factors such as increasing competitiveness in the market and loopholes in rules and regulations are not appreciable. There is also higher attrition rate in the industry which is again considered as a threat.

Report by Confederation of Indian Industry also suggested that the government authorities have to take some initiatives to bring down the attrition rate. More preference must be given to make sure that the rules and regulations are made more flexible in the outsourcing industry.

The survey was conducted among 132 service providers. And according to them the number of employees has grown drastically from past three years and is expected to grow more.

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