The temporary staffing model beats gig employment hollow

In contrast, temp staffing, facilitated by organized agencies, provides a regulated and sustainable alternative that benefits workers, businesses and the government. Not only does it deliver benefits to workers, it eases corporate operations and ensures compliance with government regulations. 

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Stability over precarity: Gig workers, often classified as ‘independent contractors,’ earn a median of ₹15,000– ₹20,000 a month but face unpredictable income flows due to demand fluctuations and platform policies. Surveys have revealed that 85% of gig workers lack savings and 90% have no access to social security.

Temp staffing, however, provides a lifeline. According to the Indian Staffing Federation (ISF), temp workers, numbering 6.2 million in 2024 and projected to reach 12 million by 2030, earn 10-15% more on an average than gig workers, thanks to structured pay scales. Staffing companies ensure payroll regularity, with all temp workers receiving statutory benefits such as provident fund (PF) and health insurance. For instance, a temp worker in manufacturing might earn ₹25,000 monthly with PF contributions, which would build a retirement corpus of ₹10-15 lakh over 20 years, while the gig model offers no such security.

Temp jobs also offer skill development. An ISF report found that 23% of temp workers transition to permanent roles annually, thanks to on-the-job training and exposure to formal sectors, compared to just 3% of gig workers. This bridges India’s skill gap—where 60% of engineering graduates remain unemployable—and fuels upward mobility.

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Better compliance: The gig economy’s lack of regulation poses a nightmare for the government. A 2024 International Labour Organization study estimated that 80% of gig workers operate outside India’s labour laws, evading taxes and social security contributions. This shadow workforce costs the government ₹50,000 crore annually in lost revenue, according to its analysis.

Temp staffing, on the other hand, operates within a legal framework. The 2020 Code on Social Security mandates agencies to register workers and contribute to PF as well as the Employees’ State Insurance (ESI) scheme, with 65% compliance reported in 2024. This formalization generated ₹12,000 crore in PF contributions in 2023 alone.

Temp staffing aligns with India’s formalization agenda. The Union ministry of labour aims to bring 50% of the informal workforce—over 400 million people—into organized sectors by 2047. Temp agencies, with their digitized platforms tracking millions of job seekers, provide data for policymaking, unlike the opaque gig ecosystem. This transparency reduces exploitation; only 5% of temp workers report wage theft versus 30% of gig workers. This ensures accountability.

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Ease of doing business as a corporate advantage: Temp staffing is a game-changer for companies that need to keep their wage bills relatively variable, rather than adding to fixed costs. India’s manufacturing sector, for example, relies on temp workers to fill 40% of its workforce during peak seasons. Unlike gig platforms, where companies must negotiate with individual workers, temp agencies streamline hiring. Businesses save an estimated 25% on recruitment costs and 30% on onboarding time by using temp staff over gig workers, according to industry studies. For example, a logistics firm hiring 500 temp workers through an agency can scale up operations in two weeks, while it can take several months for a business to source gig workers.

Temp jobs are growing fast: India’s temp staffing sector is booming, adding 317,000 new jobs annually (ISF report, 2024). Unlike the gig economy’s high levels of volatility, temp jobs show predictable expansion. Sectors like IT (17% temp workforce) and logistics (50% temp hires during festive seasons) showcase this trend. This growth isn’t a sign of weakness, but of adaptability. It meets India’s need for a flexible yet relatively secure workforce amid robust economic growth.

Temp versus gig work is a no-contest: The gig economy’s allure fades when weighed against the option of temp staffing. Workers gain stability and skills, the government secures revenue and oversight, and businesses make gains of efficiency and rule compliance. With India’s temp staffing market poised to hit $130 billion by 2030,  it’s clear that this model isn’t just a stopgap—it’s a cornerstone for sustainable employment growth.

Policymakers should double down on enforcement and incentives, ensuring temp staffing thrives as India’s workforce evolves. The gig economy may grab headlines, but it is temp staffing that is quietly building a stronger and more equitable future.

The author is executive director, Indian Staffing Federation (ISF).