It is inevitable that lockdowns due to COVID-19 will affect the economy, not just in India, but worldwide. Entire economic ecosystem, including the staffing industry is already feeling the repercussions of this slowdown. Salary cost is a major expense for any company and with the curtailment of productivity, this cost will be a heavy burden for many businesses, specially in the MSME sector. Staffing companies thus will face this crunch as much, if not more, than the businesses they support.

In our view, the silver lining is the fact that although there will be crunch initially, as lockdown situation eases and markets normalise, there will be a surge in demand. So, even though there will be a contraction in the short-term, the staffing sector will see rapid growth in demand (specially in e-commerce and pharma)in the months to come and it will be one of important engines that supports growth across the economy.