March 31, 2007

The Temp Option

Economic Times has an article on how start-ups too can benefit by hiring temp workers instead of full-time employees.
Besides lowering costs, temping also helps entrepreneurs avoid being struck with a wrong hire. Mr Sabharwal points out that hiring decisions are critical for startups and says, "Recruiting the wrong people can be truly fatal for a start up unlike in an established company." For many startups the smarter alternative is to hire temps and if they then find people who they think can contribute in the long run to the organisation make those temps permanent. Like in the other companies where the temping staff is absorbed in the organisation, in startups too this is happening. Amit Jain of, an online DVD rental firm, says that this has worked well for them with the firm absorbing 20% of the temp staff that it has as full time employees depending on the need and the potential.

...There are some who believe that timing is critical when it comes to the temping decision. This set argues that it is unwise to opt for temping agencies in the very early stages of the business given that numerous sensitive issues are likely to crop up which only permanent employees should be exposed to.

Despite the rising phenomenon there are some who take a contrarian point of view like Deep Kalra, founder and CEO, MakeMyTrip.Com. Mr kalra believes it is better to hire people and keep them on your rolls. The contrarians believe that temps are unlikely to have the same commitment or passion level as those that permanent employees have. And commitment and passion they argue is the lifeblood of all start-ups .

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the Private Equity and Venture Capital ecosystem in India. View sample issues of Venture Intelligence India newsletters and reports.