Why are IT companies turning to India’s emerging cities for flexi staffing? Know ‘these’ important reasons

Emerging Cities Transform India’s IT Flexi Staffing Landscape Amid Rising Demand for Skilled Talent

As the demand for skilled, flexible talent intensifies across India’s IT sector, companies are increasingly turning to emerging cities such as Ahmedabad, Coimbatore, Vishakhapatnam, Surat, Kochi, and Nagpur. These cities offer an appealing combination of a capable workforce, strategic geographic positioning, and robust manufacturing foundations, making them promising hubs for flexible staffing in IT. This evolving trend is poised to redefine India’s IT staffing industry, bringing opportunities for both companies and professionals in these cities.

The “Indian IT Staffing – Sectoral and State Employment Trends Report 2024,” recently published by the Indian Staffing Federation (ISF), highlights the growth trajectory of flexible staffing models within the IT sector. As per ISF President Lohit Bhatia, Karnataka, Telangana, Maharashtra, Tamil Nadu, and Delhi NCR remain the top regions leading India’s IT flexi staffing market. Together, these states hold a remarkable 57% of the market value, with Karnataka alone contributing USD 1.4 billion to this dynamic market.

Despite these metro areas holding the lead, emerging cities are experiencing a rise in demand for flexible IT talent. Valued at approximately USD 4.9 billion (roughly Rs 40,584 crore) for the fiscal year 2024, India’s IT flexi staffing market currently employs around 597,000 professionals. This upward trend indicates a growing acceptance of flexible staffing models among companies based in these newer cities, which are positioning themselves as competitive alternatives to traditional metro hubs.

IT/ITeS and GCC Sectors Drive Demand for Flexi Staffing

One of the primary forces behind the shift toward flexi staffing in emerging cities is the IT/ITeS (Information Technology/Information Technology Enabled Services) and Global Capability Centres (GCCs) sectors, which collectively represent 51% of the market value for IT flexible staffing. Together, these sectors employ approximately 296,000 IT professionals under flexible staffing arrangements. The expansion of GCCs across India is notably contributing to this demand surge, as these centers require skilled professionals to support a diverse array of global operations.

For companies, flexi staffing presents a versatile solution, enabling them to quickly adapt to evolving project demands and specialized skill requirements. Emerging cities, with their skilled workforce and lower operating costs, are proving advantageous for IT firms seeking flexible staffing solutions. These cities are drawing interest from firms aiming to reduce costs without compromising access to a talent-rich pool.

BFSI and Fintech Sectors Join the Demand Wave for Skilled Talent

In addition to IT/ITeS and GCCs, the BFSI (Banking, Financial Services, and Insurance) and fintech sectors are also increasing their reliance on flexible staffing. The push for cybersecurity, cloud technology, and digital transformation expertise is driving companies to adopt flexible staffing models to meet these specific, project-based demands.

This trend is particularly beneficial for firms that require niche skills for short-term or project-focused roles. By engaging flexi staffing, companies can fulfill critical skill gaps, meet compliance standards, and scale operations to fit market dynamics without making long-term commitments. With a 20-30% cost savings compared to traditional staffing, flexible staffing allows companies to manage project costs effectively while maintaining high levels of productivity.

Flexible Staffing Offers Cost Efficiency and Workforce Scalability

The economic benefits of flexible staffing are significant, as companies save an estimated 20-30% on project costs by leveraging flexible talent. Flexi staffing provides companies with the ability to quickly onboard skilled workers for specific projects, allowing firms to streamline their workforce according to immediate project needs. The majority of IT flexi roles are short- to mid-term positions, generally ranging from one to two years, which is ideal for firms looking to manage project cycles without long-term employment commitments.

This staffing model also enhances output, as flexi employees are often dedicated to well-defined projects with clear timelines, resulting in focused efforts and efficient work processes. The flexible nature of these roles aligns with the fast-paced demands of the IT industry, where adaptability and scalability are increasingly vital.

Experienced Professionals in High Demand for IT Flexi Roles

Professionals with 5-10 years of experience are highly sought after in India’s IT flexi staffing sector, with particular interest in candidates aged 25-30. This demand is particularly pronounced in IT/ITeS and GCCs, where mid-level experience is essential for handling specialized projects and contributing to complex operational tasks.

The industry has also observed an increase in female participation in flexi staffing roles. In FY24, women represented 35% of the total flexi workforce, with Delhi/NCR having the highest female participation at 45%. The increasing gender diversity within the flexi staffing landscape reflects broader trends within the IT industry, as companies aim to promote inclusive workplaces and foster diverse perspectives.

Future Outlook: Emerging Cities Poised to Shape the IT Flexi Staffing Market

While major metropolitan areas like Bengaluru, Hyderabad, Chennai, Mumbai, Kolkata, and Delhi NCR continue to dominate India’s IT flexi staffing market, emerging cities are steadily gaining importance. The rise of flexible staffing in these cities indicates a shift towards decentralized talent hubs, providing IT firms with alternative locations to source skilled workers while benefiting from lower operational expenses.

These emerging hubs, with their skilled professionals and cost advantages, are proving to be viable locations for companies looking to expand their flexible staffing models. As demand for flexible IT talent continues to grow, these cities are expected to become integral players in the IT staffing market, bridging the gap between companies’ staffing needs and their budget constraints.

In conclusion, India’s IT flexi staffing industry is undergoing a transformative phase as emerging cities step into the spotlight. Driven by rising demand from sectors like IT/ITeS, GCCs, BFSI, and fintech, flexible staffing is set to redefine the staffing model, providing companies with efficient, adaptable workforce solutions. With benefits such as cost savings, scalability, and access to niche skills, flexi staffing is positioned as a compelling choice for IT firms navigating the complex demands of today’s market. This shift toward flexible staffing in India’s emerging cities not only provides companies with innovative workforce solutions but also contributes to the broader development of India’s IT landscape.