CHENNAI: Tamil Nadu tops southern states in its dependence on outsourced workforce. According to a report on manpower outsourcing in southern states, released by Confederation of Indian Industry, TN engages 33 per cent of the estimated 10 million outsourced employees working in various sectors, excluding the construction sector. According to the report the manufacturing, retail and government sectors emerge as the largest users of outsourced employment.Among those sectors thriving on outsourced employees, manufacturing sector is the largest revenue contributor having a share of 41 per cent, the study said.It was also revealed that while blue-collar employees accounted for 58 of the total number of outsourced employees, grey and white-collars stood at 31 and 11 per cent respectively.While large service providers provide higher order services, smaller firms mainly focus on soft services. The proliferation of players in the soft services business is primarily due to low entry barriers, ease in recruiting and training people, lack of requirement of specific skill sets and higher demand. The study also found out that there has been a 30 per cent increase in the number of contract employees over the last three years and the organisations expect outsourcing to grow in future too.According to the 132 service providers who were surveyed, the addition to employees that has been growing at nearly 40 per cent in the last three years, is expected to grow at 15 per cent in future. The organisations expect a shift from a focus on quantity to quality, which will yield a more productive and flexible workforce. The industry will continue to be characterised by large and smaller service providers, the report added. Interestingly, the requirement for outsourced employees is met by over 30,000 staffing providers and contractors in the south. These contractors supply manpower, both daily and weekly wage labourers, and are active mainly in the construction and manufacturing sectors. Additionally, in each state, there are several unregistered contractors who operate with less than 15 personnel. Tirupur, for example, has nearly 1,000 contractors, it said.The organised staffing service is a relatively large industry with billing of over `120 billion, and the south has abut 8,500 service providers. While the small and very small players account for over 95 per cent in terms of the number of players, the large and medium players generate over 75 per cent of the revenue. Large firms such as Teamlease, work with over 15,000 candidate profiles, and service three sectors, 67 industries and 474 functions.
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