Flexi-staffing sector exhibits more resilience
The Indian Staffing Federation (ISF), the apex industry body representing the manpower outsourcing sector, has unveiled the flexi-staffing industry’s employment growth report for Q1 2025-26. The overall flexi-staffing industry, according to the report, has witnessed a q-o-q growth of 1.5 per cent this year, as compared to Q4 2024-25. However, the growth has dropped significantly y-o-y by 6.1 per cent. This severe impact on the growth trajectory is due to global economic headwinds, while sustaining through domestic digital transformation efforts.
The general flexi-staffing segment (excluding IT) has observed a q-o-q growth of 1.4 per cent in Q1 2025-26. While demand from key sectors such as FMCG, e-commerce, retail, logistics and manufacturing has continued to drive employment, the pace was tempered by a period of consolidation and delayed hiring decisions. In contrast, the IT flexi-staffing industry delivered a stand-out performance, recording a robust q-o-q growth of 5.5 per cent and an impressive 12.3 per cent y-o-y increase, signalling a strong revival in specialised technology demands.
“The April to June 2025 quarter indicates the changing face of formal employment growth, evidenced by a deceleration in flexi employment growth to 6.1 per cent y-o-y -- the slowest Q1 pace since the 2020 pandemic,” says Lohit Bhatia, president, Indian Staffing Federation, commenting on the report. “This moderation is primarily attributed to challenging economic conditions and reduced consumer spending, which constrained overall hiring numbers”.
“The IT staffing segment has delivered robust performance, achieving a strong 5.5 per cent q-o-q increase,” says Manmeet Singh, vice-president, Indian Staffing Federation. “This momentum, marked by a 12.3 per cent y-o-y growth, underscores the non-cyclical nature of digital transformation demands. Continued expansion of global capability centres (GCCs) and significant investment in areas like AI, cloud computing and digital services are the primary engines for this growth, ensuring the formal flexi workforce remains competitive in high-skill areas”.
“Despite a challenging macro-economic environment that slowed down hiring in key consumer-driven sectors, the staffing industry maintained positive growth quarter on quarter,” affirms Suchita Dutta, executive director, Indian Staffing Federation, speaking about the Staffing industry. “Our members collectively added 91,500 new formal positions over the last year, while the total formal flexi workforce employed by members of the ISF reached 1.83 million by the end of Q1 2025-26. This growth demonstrates the industry’s fundamental contribution to India’s formal employment landscape.”
Earlier, ISF announced the release of its comprehensive study: Indian Flexi-staffing Industry 2025: employment growth – sectoral & state analysis. The report highlights a period of unprecedented growth and transformation for the flexi-staffing industry, with a projected market size that solidifies its role as a key driver of formal employment and economic expansion across India.
Access to talent
The study, which provides a detailed analysis of the industry’s future trajectory, projects the formal flexi-staffing market to reach a remarkable Rs2,20,000 crore in 2025-26. This significant milestone is driven by the sustained adoption of tripartite (flexi/contract) workforce and a broad-based economic recovery. Flexi hiring allows businesses to adapt swiftly to changing demands and focus on core activities while reducing compliance liabilities, with quick access to talent, with an important factor being workforce flexibility and scalability. The top 12 sectors, bolstered by a surge in demand for specialised skills and a need for agile workforce solutions, are set to be the primary contributors to the industry’s future growth.
The study further showcases data on the participation of young professionals and the gender diversity witnessed in the industry’s workforce. Sectors like IT, retail and healthcare are at the forefront of this shift, offering new and empowering career paths that are contributing to a more inclusive and equitable labour market.
The shift towards a more flexi workforce in the next five years will be driven by several key factors. Industries such as e-commerce, retail and hospitality experience significant demand surges during peak seasons, such as festive sales, which necessitate a temporary increase in staff. At the same time, rapid industrialisation and growth in sectors like IT, retail, e-commerce, and manufacturing are creating a sustained demand for workers. To address these needs efficiently, companies are increasingly hiring temporary staff to manage short-term projects and seasonal workloads, making a strong case for the wider adoption of formal flexi work models.
Notably, formal staffing deployments are expanding beyond traditional roles to include specialised positions and are reaching beyond metros. This trend is a testament to the industry’s ability to drive a more equitable and widespread economic growth.