Temps at the top. Sounds intriguing? Read on.
A Hyderabad-based retail startup was hunting for a chief financial officer. A few human resource consultants gave the company an idea: hire a CFO on a gig basis. The startup agreed, and a CFO was appointed two months ago. The final decision on a longer appointment will be taken in the next four months, when the executive's performance is reviewed.
HR sources told Moneycontrol that some 5,800 to 6,000 companies, primarily small and medium enterprises, are now hiring officials in the top management (CXO) level on a gig basis. These gigs last for three to 12 months depending on the type of company.
“We are trying this out because a gig initiative will help save costs. Only when we are sure about the candidate will we offer a permanent position,” said the head of people management of the company quoted above.
Gig economy refers to short-term contract work and freelance projects, as opposed to permanent jobs. In a lot of cases, workers on a gig are paid more than in the case of a permanent employment.
Enterprises in the logistics, retail and technology fronts have been more proactive in hiring senior management candidates on gig basis.
Typically, every organisation spends 40-45 per cent of its salary bill on the top management. Over and above this is the cost of hiring consultants and external agencies to find the right talent and conduct the interviews.
Hiring officials in the top management level also means that these individuals are in charge of the day-to-day operations of the company. Hence, companies also take their time to ensure that the chosen candidate fits the bill.
“A gig ensures that a candidate is on probation and his/her work can be tested before sh/he is appointed on a full-time basis. The candidates also stand to gain, because they get work experience across multiple companies,” said the head of a Bengaluru-based human resource firm.
At present, some seven to 10 human resource firms have specialised in helping companies find the right gig worker.
Pitfalls of gigs
At the CXO level, candidates are usually required to sign a non-disclosure agreement that ensures that if they don’t make a cut for a permanent role, they cannot give out sensitive information.
“We have faced a few cases in the past where the candidate quit to join a rival firm and tried to implement similar business strategies for online sales. Hence, companies are being cautious,” said the startups recruitment head at a large staffing firm.
The salaries paid at the CXO level are attractive enough to get candidates interested. The employment contract clearly mentions that the role is subject to confirmation after the gig period is completed.During the review period, the salary is about 30 per cent lower, thus helping the company save costs, especially if the candidate fares poorly in the review.