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India – IBM the biggest spender on temporary IT workers

09 June 2014

IBM is the biggest spender on IT contract workers in India, with a spend that is almost double that of other companies, reports The Times of India. The New York-based technology company spends over USD 150 million annually to hire contract IT staff, which is estimated to be more than 15% of its overall workforce. 

Accenture, Microsoft, and Cisco spend over USD 80 million each on maintaining a vast pool of contract workers, while Cognizant, Oracle and HCL Technologies spend over USD 50 million each to augment their IT staff with contract resources that work as an extended IT team. 

IBM did not respond to information requests from The Times of India, and as a result the figures were obtained from a staffing firm, which chose to remain anonymous.

IBM is estimated to employ close to 150,000 people in India. In recent years the company has been increasing its employee headcount in India, while steadily reducing its US employee numbers. IBM’s employee organisation, Alliance@IBM, estimates that there are currently 83,000 American IBM workers, down from 127,000 in 2006. 

Ray Wang, CEO of Constellation Research, commented: "IBM's spend on contract staffing in India is smart given the talent base in India, and despite the rising cost structure. In the war for talent, skilled resources are needed across the world. India happens to have great depth for technology resources.”

Kamal Karanth, Managing Director of recruitment firm Kelly Services India, added: "Tech firms have seen cyclical business globally. A flexible workforce helps to manage an extended IT workforce at relatively lower costs. For some multi-national corporations it's a good way to show a reduced headcount.”

Moorthy Uppaluri, CEO of staffing solutions firm Randstad India and Sri Lanka, said: "The flexibility of having a contract workforce fosters incremental growth and allows companies to utilise 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." 

According to research from Staffing Industry Analysts, the Indian staffing market was worth INR 266.5 billion (USD 5 billion) in 2012. This is broken down between temporary agency work (75%), permanent recruitment (12%), and other services (13%). 

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