IT Staffing Fuels Growth In India’s Flexi Employment Sector
India’s flexi staffing industry has recorded a modest 6.1 per cent year-on-year (YoY) growth in the first quarter of FY26 (April–June 2025), according to data from the Indian Staffing Federation (ISF). While this reflects steady progress, it marks the slowest first-quarter expansion since the pandemic, as hiring in consumer-driven sectors cools.The slowdown was most visible in general staffing—excluding information technology (IT)—which grew only 1.4 per cent quarter-on-quarter (QoQ). The ISF attributed this to weaker global economic conditions and reduced domestic consumption. Sectors such as fast-moving consumer goods (FMCG), e-commerce, logistics and retail continued to generate employment, but at a slower pace amid cautious corporate spending and consolidation.
“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 YoY—the slowest Q1 pace since the 2020 pandemic,” said Lohit Bhatia, President, ISF “This moderation is primarily attributed to challenging economic conditions and reduced consumer spending, which constrained overall hiring numbers”.
In contrast, the IT flexi staffing segment emerged as the key growth driver, expanding by 5.5 per cent QoQ and 12.3 per cent YoY. The rebound is being powered by the rise of Global Capability Centres (GCCs) and increased investment in artificial intelligence, cloud computing, and digital transformation projects.
“The IT staffing segment delivered robust performance, achieving a strong 5.5 per cent QoQ increase. This momentum, marked by a 12.3 per cent YoY growth, underscores the non-cyclical nature of digital transformation demands,” said Manmeet Singh, Vice President, ISF. “Continued expansion of Global Capability Centers (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 broader challenges, the sector continued to generate formal employment. ISF’s members added 91,500 new positions over the past year, taking the total flexi workforce to 1.83 million by the end of Q1 FY26.
“Despite a challenging macroeconomic environment that slowed down hiring in key consumer-driven sectors, the staffing industry maintained positive growth quarter on quarter. 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 FY26. This growth demonstrates the industry's fundamental contribution to India's formal employment landscape,” said Suchita Dutta, Executive Director, ISF.
The report concludes that while macroeconomic pressures have slowed overall hiring, India’s flexi staffing sector remains a vital part of the formal economy, balancing cyclical job markets with the long-term demand for skilled, technology-enabled roles.
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