CHENNAI: The overall flexi/contract staffing industry witnessed 5% growth in Q2FY26 compared with Q1FY26, while 5.8% year-on-year growth in the current quarter against the same quarter in last financial year. The growth was driven primarily by demands in various sectors and GST rate rationalisation boost and the demand for temporary staffing, according to the Indian Staffing Federation (ISF), an apex industry body representing over 125 manpower outsourcing companies.
According to a report released by the ISF, the overall headcount of flexi staffing has grown to 1.91 million in Q2 FY26 from 1.83 million in Q1 FY26. In the last one year, 92,000 new formal flexi workforces have been added. Sectors like GCC, ecommerce, logistics, manufacturing, tourism & hospitality, FMCG and healthcare contributed to new employment generation.
Moreover, the industry has also seen growth of 85,000 new employment in general staffing industry in the last four quarters. The contract staffing demand has grown in the banking, financial services and insurance sector as well fuelled by digital transformation and compliance hiring.
The flexi or contract staffing has also grown in IT industry to 16% year-on-year, adding 7,000 employees in the last one year to the industry and witnessed a growth of 4.9%. From June 2024 to June 2025, nearly 5,000 flexi staffing were added.
The sequential recovery in Q2 FY26 was notably driven by the rebound in the IT/consulting sector, largely spearheaded by tier-2 tech firms, said the report.
Lohit Bhatia, President, Indian Staffing Federation and President Workforce Management at Quess Corp., said, “The members of the federation maintained a growth, adding 92,000 new formal temporary jobs in the last four quarters. This strong, consistent growth signals not just a short-term but a clear trend of long-term economic strength and job market formalization in India.”
Manmeet Singh, Vice President, ISF and CEO of FirstMeridian, said, “India’s IT sector coming out of red after long, have started showing signs of strong resilience, strategically addressing market dynamics with scale of operations. The growth at a significant 16% year-on-year in Q2 FY26, the highest in three years. This trend indicates businesses are heavily investing in talent and preparing for substantial future expansion.”
Suchita Dutta, Executive Director, Indian Staffing Federation, said, “ISF is working together with government and industry to drive formalization of India's workforce. With a net employment growth of 5.8% YoY, the federation represents 1.9 million workforce through its members. Most sectors with cyclical/ seasonal demand depend on the staffing industry adding vital demand to the job market.”