We want to start business in Contract Staffing where I would request for your help. I have couple of queries as below:

1. I would like to know the process of how contract staffing works.

2. What should be the minimum and maximum period in which consultancy has to provide candidates to the client?

3. In case a contractor resigns the company, then what should be the average replacement period to retain client?

4. How is the salary different compared to permanent vs contract employees. If average salary of a permanent employee for normal skillset is 1.5 times his years of experience (e.g. 1.5*4years exp = 6lakhs) and for niche skillset is 2 times his years of exp; then what will be the average salary of contract employee?

5. What should be the notice period a contractor has to serve or we can terminate?

I might be missing more questions, request you to kindly help me out in resolving above queries and any other guidance will be much appreciated. Thank you and awaiting kind responses.

From India, Mumbai
Anita P Panicker
Sr Hr Executive
+1 Other

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Anita P Panicker


You will have to decide on which field you would like to provide contract staff, eg. Finance, IT etc. you should have some expertise in recruiting them. Once you have decided that you will have to check out in the market the clients who are looking for such candidate’s. You should really have strong Data Base of candidate’s. Once you are sure about it then you will have to approach the clients and try to get an entry in that organization.

Once you get an agreement signed you will have to recruit the candidate’s and the appointment letter should contain a clause where the candidate’s service will be based on the requirement of the client. This is because the period is decided by the client as per their requirement. The average replacement period is max 15 days, but that too will depend on the criticality of the project handled by the candidate. Usually you will not face the problem as you will be giving the notice period to your candidate too.

The Salary will depend on the amount you will be getting from the client. You will have to keep some buffer of amount apart form other expenditure, as the client will not be increasing the salary every year, but the candidate will expect some increase every year.

You will have to give atleast 1 month of Notice period either way before the termination of the contract with the client.

The main point to remember keep in touch with the candidate as well as the client and collect both the feedback on regular basis.

Hope it is useful.



From India, Mumbai

Dear Anita,
Thank you for your precious response. We would like to cater only for IT industry. We do not have database of candidates but we have an option to use monster, naukri. aren't they effective to hunt for such candidates?
If we say salary will depend upon client's budget then what if client is having very minimal budget where it is very difficult or not possible to get a candidate in the marke? Whether we have to tell them that budget is very less? Also, normally client's ask what we charge - they rarely say we have this budget. What figure is best to quote. Kindly suggest. Futhermore, do you have a process document for contract staffing to share with me. Thanks a lot again Anita.

From India, Mumbai
Anita P Panicker


It is better to collect the data of the candidates you are planning to recruit, as you know the candidates in the IT sectors are very selective and if they are too good then they will be hesitant to work on contract basis. I am not trying to demoralize, but you will have to really work hard to get the right candidate and to convince them to work on contract. You can use both monster and naukri and apart from that use your contact or reference’s in the beginning, because if they are good then the client will give you more business. I say so as you have to be better than the others

As you are very well aware of tough market and due to which the client in general pay for a candidate with 4 to 5yrs experience say Rs.50,000/- to 60,000/- , this can vary as per the skill set they are looking for and the designation. So please do the market research before you start the business, and do proper grounds work. Please never tell the candidate how much you are earning then you will not be able to make any profit. There is one more practical problem the usually the candidate after usually come to know from the client itself, so to avoid that you will have to maintain very good relation with the client. I am really sorry don’t have any process document, or would have shared with you. This business has more hurdles like bonus, payment of salary on time even if your payment is delayed, as compared to placement, where you just have to worry for 3 mth and then it is the companies problem, because you will have to give a free replacement within that period if he or she leaves.

All the best hope you have success in you business.



From India, Mumbai
Dear Vishal,
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