Indian IT flexi staffing industry expected to grow at CAGR of 7% from FY24 to FY26: ISF report

The Indian IT flexi staffing market – valued at USD 4.9 billion in FY24, with a workforce of 5,97,000 – is expected to grow at CAGR of 7% from FY24 to FY26, the Indian Staffing Federation ( ISF)’s Indian IT Staffing - Sectoral & State Employment Trends Report 2024 has revealed

About 38% of organisations cited ‘ease of doing business’ and ‘talent availability’ as key reasons for adopting IT flexible staffing, the report found, adding that India is the second-largest player in the South Asia-Pacific (APAC) region within the rapidly expanding APAC IT staffing market.

The IT flexi staffing industry focuses on supplying temporary or contract IT professionals to client organisations flexibly.

“India's IT flexi-staffing sector is anticipated to experience steady growth, with a projected compound annual growth rate (CAGR) of 7% from FY 2024 to FY 2026,” Lohit Bhatia, President of ISF, said in a statement. The IT industry has started showing signs of revival since last quarter, he said.

“India’s continued growth as a hub for flexible staffing is essential to meeting the competitive demands of the digital economy. The regional expansion and growing penetration of flexi staffing models underscore India’s role as a leader in the South Asia Pacific staffing market,” Bhatia added.

The IT and IT-enabled Services (ITeS) sectors, along with Global Capability Centers (GCCs) together account for 51% of the IT flexi market size and employ a flexi workforce of 296,000 professionals, said Manmeet Singh, vice president of ISF.

Emerging cities like Ahmedabad, Coimbatore, Visakhapatnam, Surat, Kochi, and Nagpur are driving a growing demand for flexible IT talent, even as established tech hubs like Bengaluru, Hyderabad, Chennai, Mumbai, Kolkata, and Delhi NCR remain at the forefront of IT flexi-staffing demand.

The BFSI and Fintech sectors show the highest flexi-staffing penetration at 17.1%, followed by Logistics, Energy, and Utilities at 14.6%, indicating a shift towards temporary or project-based roles. Global Capability Centers (GCCs) have an 8.2% penetration rate, largely due to the rapid growth of new centers in India and a high demand for flexible staffing to meet diverse operational requirements, the report found.

In terms of gender diversity, Delhi NCR takes the lead in promoting gender balance, with a workforce distribution of 55% male and 45% female in flexi-staffing roles. Karnataka has a female labour force participation rate of 37%, in line with India’s national average. Other states like Maharashtra (33% female representation), Telangana (39%), and Tamil Nadu (23%) show lower female participation.